Tag: Acquisition

Crescent Point Bolsters Alberta Montney Position With $2.55B Hammerhead Acquisition

Posted on by slightbourne@noblecapitalmarkets.com

Crescent Point Energy has entered into an agreement to acquire fellow Canadian oil producer Hammerhead Resources in an all-stock deal valued at approximately $2.55 billion. The deal will expand Crescent Point’s presence in the Alberta Montney, adding over 100,000 contiguous net acres directly adjacent to its existing land position.

Under the terms, Hammerhead shareholders will receive 0.46 share of Crescent Point common stock and $21.00 cash for each Hammerhead share. That values Hammerhead at around $45,500 per flowing barrel of production.

Strategic Fit Strengthens Key Focus Areas

The acquisition solidifies Crescent Point’s dominant position in two of Canada’s premier unconventional oil plays. It becomes the largest landholder in both the Alberta Montney and Kaybob Duvernay resource plays.

Crescent Point gains over 800 net high-value drilling locations in the Montney through the deal. This boosts its total premium inventory depth to over 20 years, creating a strong long-term growth profile.

The acquired Montney lands also carry attractive royalty rates and have promising geological characteristics analogous to Crescent Point’s existing acreage. Horizontal drilling and completions technologies have unlocked the vast resource potential of the Montney in recent years.

Significant infrastructure owned by Hammerhead, including oil batteries, water disposal, and gas gathering lines, will also transfer over and support growth plans.

Immediate Impact on Cash Flow and Dividend

According to Crescent Point’s estimates, the deal will increase excess cash flow per share by over 15% on average from 2023-2027. This comes atop the company’s existing 5-10% organic growth outlook.

The increased cash generation provides support for a 15% dividend hike to $0.46 annually upon closing the acquisition. Crescent Point’s balance sheet remains a priority, with net debt expected to decline to 1.1x adjusted funds flow by year-end 2024.

Hammerhead’s current production of 56,000 boe/d (50% oil) is expected to increase to over 80,000 boe/d by 2024. With Hammerhead’s low-decline asset base, Crescent Point sees minimal stabilization capital required to sustain output.

Consolidation Creates Scale

Pro-forma the acquisition, Crescent Point will become Canada’s 7th largest energy producer pumping over 200,000 boe/d. The increased scale provides improved access to capital and potential cost efficiencies.

The company also gains key personnel from Hammerhead to further enhance technical and operational expertise across asset teams.

CEO Craig Bryksa said the deal transforms Crescent Point into a Montney and Duvernay focused producer, complemented by its Saskatchewan assets. The consolidation “is an integral part of our overall portfolio transformation,” Bryksa noted.

Crescent Point says its near-term priorities now center on integrating Hammerhead efficiently, executing planned programs, strengthening its balance sheet, and returning increasing capital to shareholders.

For Hammerhead, the transaction provides liquidity after joining the private equity backed company just two years ago. It also positions shareholders to participate in Crescent Point’s significant free cash flow growth in the coming years.

Subject to shareholder, court, and regulatory approvals, the acquisition is expected to close in Q4 2022. The deal will cement Crescent Point’s standing as a dominant Montney producer and provides visible growth underpinned by its expanded low-risk drilling inventory.

Take a moment to take a look at Noble Capital Markets’ Senior Research Analyst Michael Heim’s coverage list.

BigBear.ai Makes Bold Move to Lead Vision AI Industry with Acquisition of Pangiam

Posted on by slightbourne@noblecapitalmarkets.com

BigBear.ai, a provider of AI-powered business intelligence solutions, has announced the acquisition of Pangiam, a leader in facial recognition and biometrics, for approximately $70 million in an all-stock deal. The acquisition represents a major strategic move by BigBear.ai to expand its capabilities and leadership in vision artificial intelligence (AI).

Vision AI refers to AI systems that can perceive, understand and interact with the visual world. It includes capabilities like image and video analysis, facial recognition, and other computer vision applications. Vision AI is considered one of the most promising and rapidly growing AI segments.

With the acquisition, BigBear.ai makes a big bet on vision AI and aims to create one of the industry’s most comprehensive vision AI portfolios. Pangiam’s facial recognition and biometrics technologies will complement BigBear.ai’s existing computer vision capabilities.

Major Boost to Government Business

A key rationale and benefit of the deal is expanding BigBear.ai’s business with U.S. government defense and intelligence agencies. The company currently serves 20 government customers with its predictive analytics solutions. Adding Pangiam’s technology and expertise will open significant new opportunities.

Pangiam brings an impressive customer base that includes the Department of Homeland Security, U.S. Customs and Border Protection, and major international airports. Its vision AI analytics help these customers streamline operations and enhance security.

According to Mandy Long, BigBear.ai CEO, the combined entity will be able to “pursue larger customer opportunities” in the government sector. Leveraging Pangiam’s portfolio is expected to result in larger contracts for expanded vision AI services.

CombiningComplementary Vision AI Technologies

Technologically, the acquisition enables BigBear.ai to provide comprehensive vision AI solutions. Pangiam’s strength lies in near-field applications like facial recognition and biometrics. BigBear.ai has capabilities in far-field vision AI that analyzes wider environments.

Together, the combined portfolio covers the full spectrum of vision AI’s possibilities. BigBear.ai notes this full stack capability will be unique in the industry, giving the company an edge over other players.

The vision AI integration also unlocks new potential for BigBear.ai’s existing government customers. Its current predictive analytics solutions can be augmented with Pangiam’s facial recognition and biometrics tools. This builds on the company’s strategy to cross-sell new capabilities to established customers.

Long describes the alignment of Pangiam and BigBear.ai’s vision AI prowess as a key factor that will “vault solutions currently available in market.” The combined innovation assets create opportunities to push vision AI technology forward and build next-generation solutions.

Fast-Growing Market Opportunities

The acquisition comes as vision AI represents a $20 billion market opportunity predicted to grow at over 20% CAGR through 2030. It is one of the most dynamic segments within the booming AI industry.

With Pangiam under its wing, BigBear.ai is making a major play for leadership in this high-potential space. The new capabilities and customer reach significantly expand its addressable market in areas like government, airports, identity verification, and border security.

BigBear.ai also gains vital talent and IP to enhance its vision AI research and development efforts. This will help fuel its ability to bring new innovations to customers seeking advanced vision AI systems.

In a statement, BigBear.ai CEO Mandy Long called the merger a “holy grail” deal that delivers full spectrum vision AI capabilities spanning near and far field environments. It positions the newly combined company to capitalize on surging market demand from government and commercial sectors.

The proposed $70 million acquisition shows BigBear.ai is putting its money where its mouth is in terms of dominating the up-and-coming vision AI arena. With Pangiam’s tech and talent on board, BigBear.ai aims to aggressively pursue larger opportunities and cement its status as an industry frontrunner.

Forum Energy Technologies Transforms Business with Variperm Acquisition

Posted on by slightbourne@noblecapitalmarkets.com

Houston-based Forum Energy Technologies (NYSE: FET) announced a definitive agreement to acquire Variperm Energy Services in a transformative $210 million deal. The acquisition is expected to significantly boost FET’s revenues, profitability, and exposure to critical global energy production.

Under the terms of the agreement, FET will pay $150 million in cash and issue 2 million shares of FET common stock to acquire Variperm. This reflects a total valuation of approximately 3.7 times Variperm’s trailing 12-month EBITDA. The deal is projected to close in January 2024, subject to customary closing conditions and Canadian regulatory approval.

Variperm is a leading manufacturer of customized downhole solutions and sand/flow control products for heavy oil applications. Headquartered in Calgary, Canada, the company has 290 employees across eight North American locations. Variperm has been backed by private equity firm SCF Partners since 2014.

“We are excited to have Variperm join the FET family,” said Neal Lux, President and CEO of FET. “Variperm’s differentiated technology and strong position with blue-chip customers establishes FET as a key global partner for producers.”

Significantly Accretive Deal

FET expects the acquisition to be highly accretive, transforming its profitability, margins and scale.

On a combined trailing 12-month basis as of September 30, 2023, FET projects total revenues increasing 17% to $873 million. Adjusted EBITDA is expected to surge 77% to $121 million, reflecting a 470 basis point improvement in EBITDA margins to 14%.

The deal is also expected to drive substantial increases in operating cash flow, free cash flow, and earnings per share. FET anticipates ample liquidity and balance sheet flexibility even after closing, with net leverage of only 1.9x EBITDA.

Complementary Offerings & Global Reach

Importantly, Variperm’s product portfolio directly complements FET’s existing artificial lift and downhole solutions. This creates cross-selling opportunities and enables FET to offer integrated solutions.

FET can also leverage its extensive global infrastructure and footprint spanning over 50 countries to expand Variperm’s customer reach worldwide. This includes critical energy markets in the Middle East.

Neal Lux commented, “Variperm’s strong position with blue-chip customers further establishes FET as a key global partner for producers. The acquisition also broadens FET’s exposure to one of the most critical sources of global energy production and security.”

Financing & Liquidity

FET plans to fund the $150 million cash portion of the acquisition through existing cash on hand and borrowings under its revolving credit facility. FET may also utilize a $60 million seller term loan from Variperm’s existing PE owners.

In conjunction with the deal, FET has amended its credit facility to increase revolving commitments by $71 million to $250 million. The amended facility also extends maturity to September 2028 and permits the Variperm acquisition.

At close, FET expects to have net leverage of 1.9x EBITDA and liquidity of approximately $142 million to fund operations and future growth. The company anticipates rapidly deleveraging to 1.0-1.3x by end of 2024 based on free cash flow generation.

The strategic Variperm acquisition solidifies FET’s standing as a leading provider of solutions for the global oil & gas industry. By augmenting its portfolio, boosting profitability, and expanding its customer base, FET has set the stage for continued growth and success.

Take a moment to look at other energy companies by looking at Noble Capital Market’s Senior Research Analyst Michael Heim’s coverage list.

Breaking Boundaries: Lilly’s Investment in Base Editing for Heart Disease

Posted on by slightbourne@noblecapitalmarkets.com

Pharmaceutical giant Eli Lilly is expanding its efforts in cardiovascular disease research through a new deal with Beam Therapeutics and Verve Therapeutics worth up to $600 million. The deal centers around base editing, an emerging gene editing technology that Beam and Verve are pioneering for new precision genetic medicines.

Under the agreement announced today, Lilly will acquire Beam’s opt-in rights to co-develop and co-commercialize several of Verve’s base editing programs targeting cardiovascular disease. This includes lead programs focused on PCSK9 and ANGPTL3 – two high profile genes involved in cholesterol regulation and metabolism. A third undisclosed target related to liver-mediated cardiovascular disease is also included.

In exchange, Beam will receive a hefty $200 million upfront payment along with a $50 million equity investment from Lilly. Beam is further eligible for up to $350 million in future milestone payments as the programs advance through clinical trials and regulatory approvals.

For Lilly, this deal provides access to a promising new approach to treating cardiovascular disease, an area where the company already has a major presence. Lilly has been a leader in cholesterol drugs like statins for decades, and more recently entered the PCSK9 market through its ownership of Repatha. But despite effective medications, cardiovascular disease remains a top killer globally.

Base editing offers a way to precisely and permanently modify disease-causing genes in order to lower cholesterol and potentially deliver stronger treatment effects than current options. Early human trials have already shown base editing of PCSK9 can lower LDL cholesterol. Verve recently initiated a clinical trial using base editors to target both PCSK9 and ANGPTL3 simultaneously.

Take a moment to take a look at Ocugen (OCGN), a biotechnology company focused on discovering, developing, and commercializing novel gene and cell therapies and vaccines.

As a technology pioneer, Beam is widely considered the leader in base editing. The company has uncovered a series of natural enzymes that can be programmed to make single letter DNA changes at targeted sites without cutting the double strand like traditional CRISPR gene editing. This opens possibilities for more precise control while minimizing unintended effects.

Beam CEO John Evans highlighted base editing as a core strategic priority, and views creative partnerships as a key path to accelerate development. “Our initial collaboration with Verve and this new transaction with Lilly are exemplary of our execution of that strategy,” Evans said. “This deal provides meaningful upfront capital to advance our portfolio of clinical- and research-stage programs, with significant additional value achievable as the Verve programs advance.”

For Beam, the capital influx provides fuel to advance its broader base editing pipeline including programs in sickle cell disease, alpha-1 antitrypsin deficiency, and glycine encephalopathy. The company now expects its cash runway to extend into the second half of 2026.

Lilly’s history with Verve also preceded this acquisition. In 2021, Lilly led Verve’s $105 million Series B financing and took a stake in the company. That marked another early mover deal to tap into base editing. Verve CEO Sekar Kathiresan said “Lilly’s extensive capabilities in drug development and commercialization make them an ideal partner for Verve as we work together to advance base editing programs aimed at reducing CVD risk through genome editing.”

Beam and Verve join a short list of biotechs focused on realizing the promise of base editing. But Lilly’s involvement marks a huge vote of confidence from the pharma world. As base editing advances toward the clinic, deals like this suggest major players view the technology as more than just hype.

Lilly has been aggressively scouting the latest biotech innovations through both in-house R&D and external deals. The past year saw Lilly acquire hot companies like POINT Biopharma and Repare Therapeutics for large sums. Base editing adds a new tool in Lilly’s toolkit for next generation therapeutic approaches.

Cardiovascular disease also represents an attractive area for investment despite already having effective medications. Heart attacks, strokes and other complications remain a top cause of mortality globally. In the US alone, 1 in 4 deaths are attributable to heart disease each year. Even modest improvements in treatment can translate into major public health benefits.

The risk for Lilly and other major pharmaceutical companies is that base editing and gene editing fail to live up to their early promise in the clinic. However, most experts are optimistic the technology will usher in a new wave of therapies over the next decade. For a pharma giant like Lilly with over $28 billion in yearly revenue, the potential reward is well worth the investment risk to stay on the cutting edge.

PCTEL to be Acquired by Amphenol in $139.7 Million All-Cash Deal

Posted on by slightbourne@noblecapitalmarkets.com

PCTEL, a leading global provider of wireless technology solutions, announced last week that it has reached a definitive agreement to be acquired by Amphenol Corporation in an all-cash transaction valued at approximately $139.7 million.

Under the terms of the agreement, Amphenol will acquire all outstanding shares of PCTEL common stock for $7.00 per share. This offer price represents a premium of over 50% compared to PCTEL’s closing share price of $4.62 on October 13, 2023, the last full trading day before the deal was announced.

The acquisition will allow PCTEL to leverage Amphenol’s global presence, dedicated customer base, and scale to accelerate the growth of PCTEL’s business. Amphenol is one of the world’s largest providers of high-technology interconnect, sensor and antenna solutions.

PCTEL is seen as a clear innovation leader in wireless technology solutions, making it an excellent strategic fit within Amphenol’s portfolio. PCTEL’s capabilities in antennas and test and measurement will complement Amphenol’s strengths in interconnect and sensor technologies.

The deal has been approved by PCTEL’s Board of Directors and is expected to close either in Q4 2023 or early 2024, subject to shareholder approval and customary closing conditions. Once the acquisition is completed, PCTEL will no longer be a publicly traded company on the Nasdaq.

PCTEL provides purpose-built Industrial IoT devices, antenna systems, and test and measurement products to customers worldwide. The company has built trusted relationships through nearly 30 years of experience solving complex wireless challenges and helping organizations stay connected, transform and grow.

Take a moment to take a look at Comtech Telecommunications Corp., a leading global provider of next-generation 911 emergency systems and secure wireless communications technologies.

Amphenol has a diversified presence across high-growth segments including automotive, broadband communications, commercial aerospace, industrial, information technology, military, mobile devices and mobile networks. Amphenol’s sustained financial strength and entrepreneurial culture will support taking PCTEL’s business to new heights.

The transaction follows a nearly year-long strategic review process overseen by PCTEL’s Board of Directors. In their announcement, PCTEL highlighted that Amphenol’s culture is well-aligned and will provide a valuable home for PCTEL’s global employees after the acquisition.

For investors, the all-cash deal provides certainty of value at an attractive premium to PCTEL’s recent trading prices. The $7.00 per share price is over 50% higher than the 30-day volume weighted average share price prior to the deal announcement.

PCTEL’s CEO David Neumann noted that the company’s team has done an excellent job growing the business and meeting strong customer demand globally, especially for high reliability applications. This established market position made PCTEL an appealing target for Amphenol.

The deal marks an exciting milestone for PCTEL, allowing the company to join forces with an industry leader in Amphenol. Investors can expect an accelerated growth trajectory as the combined companies leverage their technical strengths and customer relationships.

After 29 years as an independent public company, PCTEL is set to start an exciting new chapter as part of Amphenol. This transaction highlights the ongoing demand for antennas, sensors and other wireless connectivity technology solutions.

Gilead Partnership Provides Boost to Assembly Bio’s Antiviral Pipeline

Posted on by slightbourne@noblecapitalmarkets.com

Clinical-stage biotech Assembly Biosciences gained a powerful ally in developing next-generation antivirals through a new collaboration with pharma giant Gilead Sciences. The deal provides Gilead access to Assembly Bio’s portfolio of early-stage assets while giving Assembly funding and expertise to advance its programs.

Under the 12-year partnership announced Monday, Gilead will provide $100 million upfront, including an equity investment at a premium. Assembly Bio gains potential milestone payments, royalties, and profit-sharing as programs progress.

For investors, the collaboration validates Assembly Bio’s antiviral pipeline and represents significant long-term revenue potential. The deal also propels Assembly closer to becoming a fully integrated biotech firm.

Assembly’s current clinical assets target major viral diseases like hepatitis B virus (HBV) and herpes simplex virus (HSV). Its preclinical pipeline holds promise against hepatitis D virus (HDV), human cytomegalovirus, and more.

Take a look at other emerging biotechnology companies by taking a moment to look at Noble Capital Markets’ Senior Research Analyst Robert LeBoyer’s coverage list.

Gilead brings extensive experience developing and commercializing leading antiviral drugs in HIV and hepatitis C. The pharma giant now doubles down on virology via Assembly’s early-stage assets.

Opting into a program after proof-of-concept could cost Gilead at least $45 million, signaling confidence in Assembly’s science. The biotech leads R&D initially, with Gilead taking over once assets transition to late-stage trials and commercialization.

For Assembly investors, this deal structure provides valuable de-risking of the pipeline. The company secures funding to advance programs while sharing in the upside if Gilead opts in to lucrative late-stage development and sales.

Assembly is eligible for up to $330 million per program in milestones post opt-in. Royalties range from high single digits to high teens. The biotech can also opt into U.S. profit-sharing.

These economics help offset the risk of clinical failure for Assembly’s shareholders. Meanwhile, Gilead pays for the privilege of accessing Assembly’s innovating antiviral pipelines.

The partnership enhances Assembly’s financial position and extends its operating runway. This enables advancing other preclinical programs beyond the leads Gilead can opt into.

For example, Assembly recently unveiled a promising pan-herpesvirus asset that could treat multiple herpes infections from one oral pill. Such follow-on compounds ensure future revenue potential.

Meanwhile, major progress by Gilead with Assembly’s lead assets could generate substantial royalties and profit-sharing income. Upside from the deal should become clearer as Gilead opts to license drugs entering late-stage testing over the 12-year term.

With a strengthened balance sheet and veteran partner at its side, Assembly Bio seems poised for a breakthrough as a developmental biotech focused on next-gen antivirals.

The Gilead deal provides third-party validation of Assembly’s science and a critical launchpad toward integrated status combining R&D, late-stage trials, and commercialization.

For Assembly investors, these benefits significantly de-risk the journey to having approved antiviral products on the market. If clinical programs pan out as hoped, the payoff from this partnership could be huge.

OptimizeRx to Acquire Medicx in $95 Million Deal, Expanding Omnichannel Platform

Posted on by slightbourne@noblecapitalmarkets.com

OptimizeRx Corp. announced Thursday it will acquire Scottsdale-based Medicx Health for $95 million, expanding its platform reach to healthcare consumers.

The deal combines OptimizeRx’s solutions focused on healthcare providers (HCPs) with Medicx’s consumer-centric technologies. Together, the companies can engage over 2 million HCPs and a majority of U.S. healthcare consumers.

“Our acquisition of Medicx is expected to be a major business accelerator for us,” said OptimizeRx CEO Will Febbo.

For OptimizeRx, the acquisition enhances its digital health platform that helps life sciences companies educate and engage HCPs and patients. Medicx brings new omnichannel marketing and analytics capabilities aimed at consumers.

Reaching Healthcare’s Key Stakeholders

OptimizeRx’s lead solution is a digital point-of-care network enabling pharma marketing and engagement integrated within EHR and e-prescribing workflows. This allows drug makers to reach HCPs through digital touchpoints at the point of care.

Medicx has developed a Micro-Neighborhood® Targeting Platform using advanced identity resolution to reach healthcare consumers. Combining both solutions offers an end-to-end way for pharma companies to connect with HCPs and patients—healthcare’s two most important stakeholders.

“Coupling consumer and HCP marketing strategies is a natural next step for many of our customers,” said OptimizeRx Chief Commercial Officer Steve Silvestro.

Profitable Addition to Fuel Growth

The acquisition is expected to significantly benefit OptimizeRx’s growth and profitability. Medicx is a highly profitable company that will immediately add to revenue, EBITDA, and earnings per share.

On a combined basis, the deal will bring OptimizeRx’s revenue run-rate close to $100 million. Medicx also opens substantial new opportunities for customer penetration and cross-selling.

“I’m extremely proud of the leading patient-focused omnichannel platform the Medicx team has built,” said Medicx CEO Michael Weintraub. “Integrating with a leading HCP-focused enterprise provides numerous efficiencies.”

Weintraub added the combined platforms can now inform and educate patients and HCPs in a cohesive way no single company has done before.

Funded for Growth

OptimizeRx will pay $95 million in total consideration to acquire Medicx. The deal will be funded through OptimizeRx’s cash on hand, short-term investments, and a new $40 million credit facility from Blue Torch Capital.

Certain members of Medicx’s management will invest approximately $10.5 million of their proceeds into OptimizeRx common stock.

The acquisition is expected to close in Q4 2023. Medicx will operate as a subsidiary under its current management team.

Strong Quarterly Performance

In tandem with the acquisition announcement, OptimizeRx preannounced strong third quarter 2023 results.

The company expects Q3 revenue between $15.2-$15.5 million, ahead of consensus estimates. Non-GAAP net income is projected at $0.6-$1 million.

OptimizeRx saw accelerated organic growth in messaging driven by its recently enhanced Dynamic Audience Activation Platform.

The deal marks OptimizeRx’s largest acquisition to date as it leverages M&A to expand its platform. Medicx’s addition is expected to be immediately accretive while funding future growth.

Haemonetics Expands Hospital Portfolio Through $253 Million Acquisition of OpSens

Posted on by slightbourne@noblecapitalmarkets.com

Medical technology firm Haemonetics Corporation recently announced a definitive agreement to acquire OpSens, Inc. in an all-cash deal valued at approximately $253 million. OpSens is a medical device company specializing in innovative fiber optic sensor technology for interventional cardiology applications. This strategic acquisition allows Haemonetics to expand its hospital business into the high-growth interventional cardiology market estimated at $1 billion.

Haemonetics, based in Boston, offers a suite of products for blood and plasma collection, the surgical suite, and hospital transfusion services. With the addition of OpSens’ sensor-guided guidewire and pressure guidewire products for transcatheter aortic valve replacement (TAVR) and percutaneous coronary intervention (PCI), Haemonetics bolsters its portfolio with clinically validated technology to improve patient outcomes.

OpSens’ core offerings include the SavvyWire, the first sensor-guided guidewire for TAVR procedures which enables shorter hospital stays, and the OptoWire, a pressure guidewire used to aid coronary artery disease diagnosis by measuring key parameters like fractional flow reserve (FFR). OpSens leverages proprietary optical technology across its sensor solutions for medical devices and critical industrial applications.

According to Stewart Strong, President of Global Hospital at Haemonetics, this acquisition expands Haemonetics’ leadership in interventional cardiology while providing a foundation for additional growth. By combining OpSens’ innovative technology with Haemonetics’ commercial infrastructure and hospital relationships, there is tremendous potential to increase adoption and improve patient care globally.

Strategically, Haemonetics gains several advantages from the purchase:

  • Access to a $1 billion total addressable market in interventional cardiology, a specialty area witnessing increasing procedure volume. OpSens’ competitive, clinically validated offerings are well-positioned for long-term growth.
  • The ability to accelerate OpSens product adoption leveraging Haemonetics’ existing commercial footprint and depth of penetration in U.S. hospitals for its VASCADE vascular closure portfolio.
  • Expanded product breadth and enhanced diversification into adjacent applications like industrial sensors. OpSens technology can be leveraged across Haemonetics’ hospital business and new markets.
  • Opportunities for continued R&D, clinical study efforts, and other business development activities to augment internal product development. Haemonetics aims to expand its hospital division via organic and inorganic investments.

Financially, Haemonetics expects the deal will be immediately accretive to revenue growth. On an adjusted basis, earnings per share is also expected to be accretive right away. Due to one-time integration costs, GAAP earnings per share may be slightly dilutive in the first full fiscal year before turning accretive.

Haemonetics will finance the transaction through existing cash balances and its revolving credit facility. This will result in a manageable rise in the company’s net debt to EBITDA ratio to around 2.1x. The purchase is anticipated to close by January 2024, subject to customary approvals.

In summary, the acquisition of OpSens for $253 million in cash strengthens Haemonetics’ position in the attractive interventional cardiology space while providing new technologies, commercial synergies, and earnings accretion over the long-term. It signals a bold move to supplement organic growth with value-enhancing strategic M&A, as Haemonetics looks to deliver innovation and drive better patient outcomes through continued expansion.

Take a look at more biotechnology companies by taking a look at Noble Capital Markets’ Senior Research Analyst Robert LeBoyer’s coverage list.

Bristol Myers Squibb to Acquire Mirati Therapeutics for $4.8 Billion

Posted on by slightbourne@noblecapitalmarkets.com

Pharma giant Bristol Myers Squibb (BMY) announced today that it will acquire clinical-stage biotech Mirati Therapeutics (MRTX) for $58 per share in an all-cash deal totaling $4.8 billion. Mirati stockholders will also receive a contingent value right worth up to $12 per share, bringing the total potential deal value to $5.8 billion.

The acquisition will expand Bristol Myers Squibb’s oncology portfolio and pipeline. Mirati’s lead asset is KRAZATI (adagrasib), the first and only FDA-approved drug targeting the KRAS G12C mutation. KRAS mutations occur in about 13% of non-small cell lung cancers (NSCLC) and are linked to poor prognosis.

KRAZATI was granted accelerated approval in October 2022 as a second-line treatment for KRAS G12C-mutated NSCLC. It is also being tested in combination with a PD-1 inhibitor as a potential first-line NSCLC therapy. Beyond lung cancer, KRAZATI has shown promise in colorectal and pancreatic cancers.

“With multiple targeted oncology assets including KRAZATI, Mirati is another important step forward in our efforts to grow our diversified oncology portfolio,” said Bristol Myers CEO Giovanni Caforio. The company aims to leverage its global commercial infrastructure to maximize KRAZATI’s reach.

Mirati’s earlier-stage pipeline includes MRTX1719, an innovative PRMT5 inhibitor, as well as several KRAS-targeted agents. MRTX1719 could be the first targeted therapy for MTAP-deleted tumors, which represent about 10% of cancers.

“Bristol Myers Squibb’s global scale, resources and commitment to innovation will enable Mirati’s therapeutics to benefit more patients, faster,” said Mirati CEO Charles Baum.

Strategic Fit

Lung cancer is the most common cancer and leading cause of cancer death globally. The addition of KRAZATI establishes Bristol Myers as a leader in developing targeted lung cancer therapies. Mirati also expands Bristol Myers’ presence in colorectal and pancreatic cancers.

The acquisition builds on Bristol Myers’ recent deals for Turning Point Therapeutics and Eisai’s oncology business. As patents expire for the pharma giant’s top-selling cancer immunotherapy Opdivo, it aims to refill its oncology pipeline.

“With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals,” said Caforio.

Broader Biopharma Implications

The blockbuster Mirati acquisition also has significant implications for the broader biotech and biopharma sector. As large pharmas look to replenish pipelines, M&A activity has intensified. The deal shows that promising clinical-stage biotechs with innovative oncology pipelines continue to be attractive buyout targets.

Analysts note the 52% buyout premium Bristol Myers paid as a sign of their urgency to tap into Mirati’s next-gen oncology science. For startup biotechs pursuing novel approaches in high-value areas like oncology, it underscores the possibility of commanding large premium buyouts from “big pharma” acquirers.

However, smaller players also face the risk of being squeezed out as consolidation accelerates. The Mirati deal exemplifies the scaling up required to compete in cutting-edge areas like targeted cancer therapies. Smaller biotechs could find it increasingly difficult to independently develop and commercialize new drugs in the future.

That said, smaller biotechs may also benefit from big pharma’s growing appetite for M&A. The premiums being offered for innovative science and pipelines create lucrative exit opportunities for startups. And the influx of capital from buyouts can fund the next generation of biotech innovation.

Take a look at some emerging growth biotechnology companies by taking a look at Noble Capital Market’s Senior Research Analyst Robert LeBoyer’s coverage list.

Deal Terms

Under the definitive agreement, Bristol Myers will pay $58 per share for Mirati’s outstanding common stock. This represents a 52% premium over Mirati’s 30-day volume-weighted average price. Including Mirati’s $1.1 billion cash balance, the total equity value comes to $4.8 billion.

Each Mirati shareholder will also receive a CVR worth up to $12 per share. This contingent value right payment is triggered if Mirati’s MRTX1719 is approved within 7 years as a NSCLC therapy after two or fewer systemic treatments. The CVR adds up to $1 billion in potential additional value.

The transaction is expected to close in the first half of 2024, pending approval from regulators and Mirati shareholders. Bristol Myers anticipates the deal will be dilutive to its non-GAAP earnings through 2025 as it integrates Mirati. It plans to finance the acquisition through cash and debt offerings.

Caforio stated: “With a strong strategic fit, great science and clear value creation opportunities for our shareholders, the Mirati transaction is aligned with our business development goals.” The deal furthers Bristol Myers Squibb’s transformation into a leading oncology-focused biopharma.

Lilly Makes $1.4 Billion Bet on Radioactive Cancer Drugs with POINT Biopharma Acquisition

Posted on by slightbourne@noblecapitalmarkets.com

Pharmaceutical giant Eli Lilly is expanding its cancer treatment portfolio into a promising new area by acquiring POINT Biopharma, a company developing radioactive drugs that precisely target tumors, for $1.4 billion.

POINT specializes in radioligand therapies, an emerging approach to cancer treatment that uses radioactive particles linked to molecules that bind to receptors on cancer cells. This enables the radiation to selectively kill tumors while limiting damage to healthy tissue.

Lilly is paying $12.50 per share in cash for POINT, an 87% premium over the stock’s latest closing price. The deal will give Lilly control of POINT’s pipeline of radioligand therapy candidates, which includes two late-stage experimental drugs.

One drug, PNT20021, targets prostate cancer tumors by binding to a protein called PSMA. Study data expected later this year will show whether it extends the lives of men with metastatic castration-resistant prostate cancer.

The other late-stage drug, PNT20031, homes in on neuroendocrine tumor cells via their somatostatin receptors. It may provide a new option for patients with advanced gastroenteropancreatic neuroendocrine tumors.

Take a look at PDS Biotechnology, a clinical stage immunotherapy company developing a growing pipeline of targeted cancer and infectious disease immunotherapies.

Beyond these lead programs, POINT has several earlier stage radioligands in development for cancers of the breast, lung, and brain. Lilly gains full access to progress these toward human testing.

The deal also gives Lilly two specialized facilities Point has built to produce and research radioligands. Manufacturing the drugs involves linking medical radioisotopes like actinium-225 to the targeting molecules, which requires nuclear expertise.

Jacob Van Naarden, head of Lilly’s oncology division, touted the promise of radioligands to safely destroy cancer while avoiding the side effects of traditional chemo. “We are excited by the potential of this emerging modality,” he said.

Lilly has been growing its cancer treatment business in recent years through deals for other firms’ drug candidates and technologies. The POINT acquisition similarly expands Lilly’s footprint into an area well-suited for precision medicine.

The U.S. Food and Drug Administration has already approved over a half dozen radioligand therapies from Lilly competitors like Novartis. Their success is driving a surge of investment and deal-making in the radiopharmaceutical field.

But analyst Geoffrey Porges of SVB Securities thinks Lilly overpaid for POINT. “We believe the valuation fails to reflect the very high risks inherent in drug development,” he wrote in a note to investors.

Porges added that Lilly may need to invest over $2 billion more to fully develop POINT’s pipeline over the next 5-7 years, with no certainty the drugs will pan out.

Lilly expects the acquisition to close by the end of 2023 after gaining required antitrust and regulatory approvals. The majority of POINT shareholders also must tender their shares as part of the agreement.

The deal marks Lilly’s second major oncology purchase in 2022. It paid $1.1 billion earlier in the year access to cancer drug candidates from China’s Zymeworks. With POINT, Lilly is now positioned as a leader across multiple next-wave approaches in the high-stakes race to develop better cancer treatments.

Chesapeake Utilities to Acquire Florida City Gas in $923 Million Deal

Posted on by slightbourne@noblecapitalmarkets.com

Chesapeake Utilities Corporation announced Monday that it has entered into an agreement to acquire Florida City Gas (FCG) from NextEra Energy for $923 million in cash. The acquisition will significantly expand Chesapeake’s presence in the growing Florida energy market.

FCG is the eighth largest natural gas local distribution company in Florida, serving around 120,000 residential and commercial customers across eight counties. Its infrastructure includes approximately 3,800 miles of distribution pipelines and 80 miles of transmission pipelines.

According to Jeff Householder, President and CEO of Chesapeake Utilities, natural gas demand in Florida continues to rise as consumers and businesses seek reliable, domestic, and affordable energy. With this acquisition, Chesapeake aims to capitalize on the robust growth opportunities across the state.

“This acquisition will more than double our natural gas business in Florida, one of the fastest growing states in the nation,” said Householder. “We see significant potential to continue pursuing long-term earnings growth.”

The deal is expected to close by the end of the fourth quarter of 2023, subject to regulatory approvals. Once completed, FCG will become a wholly owned subsidiary of Chesapeake Utilities.

Chesapeake has a strong track record of successfully integrating acquisitions to drive growth, as seen in its purchase of Florida Public Utilities in 2009. The company believes it can optimize FCG’s operations and execute on additional investments in gas distribution, transmission, and other energy platforms.

To finance the deal, Chesapeake plans to utilize a mix of equity and long-term debt to maintain balance sheet strength. The company has also obtained committed financing from Barclays.

Chesapeake has extended its earnings guidance through 2028 based on the increased scale and opportunities from FCG. It expects earnings per share growth of approximately 8% through 2028. The company also increased its 5-year capital expenditure guidance to $1.5-$1.8 billion.

The FCG acquisition demonstrates Chesapeake’s strategy of consolidating natural gas assets and positioning itself for growth in key geographies. As energy markets evolve, strategic deals allow companies like Chesapeake to enhance their competitive position.

Alfasigma Makes Big Bet on Liver Disease With $1.25 Billion Intercept Buyout

Posted on by slightbourne@noblecapitalmarkets.com

Italian pharma Alfasigma is expanding its gastroenterology portfolio in a major way with the proposed $1.25 billion acquisition of Intercept Pharmaceuticals. The all-cash deal provides Alfasigma with Intercept’s leading drug Ocaliva and a strengthened pipeline in progressive liver diseases.

Alfasigma will pay $19 per share to acquire Intercept, representing an 82% premium over Intercept’s share price before the deal announcement. The purchase price reflects a big bet on Ocaliva’s growth prospects and Intercept’s broader capabilities in rare liver conditions.

Ocaliva is the key asset Alfasigma gains from the deal. It’s the only FDA approved second-line treatment for primary biliary cholangitis (PBC), a progressive autoimmune disorder that damages the bile ducts in the liver. Ocaliva hit $152 million in sales over the first half of 2023 alone, underscoring its rapid growth trajectory.

Beyond Ocaliva, Alfasigma also adds Intercept’s emerging pipeline of novel therapies for PBC and other liver diseases. The crown jewel is a promising fixed-dose combination regimen that could transform the PBC treatment paradigm.

Take a look at Noble Capital Markets Senior Life Sciences Analyst Robert LeBoyer’s coverage universe.

The deal dramatically expands Alfasigma’s presence in the high-value U.S. pharma market. Previously focused primarily on the Italian market, the Intercept acquisition gives Alfasigma an anchor asset and commercial team in the U.S.

Strategically, the move aligns with Alfasigma’s vision to build up its gastroenterology and hepatology business. CEO Francesco Balestrieri highlighted Intercept’s compelling strategic fit with Alfasigma’s focus in these therapeutic areas.

Expect Alfasigma to invest heavily to maximize Ocaliva’s potential. The company sees major commercial expansion opportunities to extend Ocaliva’s reach across PBC patient populations. Alfasigma also gains Intercept’s seasoned specialty sales force to drive prescription growth.

With Intercept operating as a wholly-owned subsidiary once the buyout closes, Alfasigma is well-positioned to become a global force in progressive liver diseases. The deal enhances Alfasigma’s standing as an emerging player in the U.S. pharma market.

Look for Alfasigma to continue seeking acquisition targets to accelerate its growth. The company has the financial firepower to pursue additional deals that build up its portfolio. If the Intercept acquisition is any indication, Alfasigma has appetite for bold, transformative M&A.

The proposed buyout still requires regulatory and shareholder approval. But with a massive 82% premium offered, Intercept shareholders are likely to approve the $19 per share deal price. Expect Alfasigma to move rapidly to complete the acquisition by the end of 2023.

Regeneron Strengthens Gene Therapy Pipeline Through Acquisition of Decibel Therapeutics

Posted on by slightbourne@noblecapitalmarkets.com

Regeneron Pharmaceuticals has expanded its gene therapy programs by acquiring Decibel Therapeutics, a biotech company focused on developing treatments for hearing loss. The $1.1 billion deal provides Regeneron with three promising gene therapy candidates that use adeno-associated virus (AAV) vectors to restore hearing.

The most advanced asset is DB-OTO, an AAV-based gene therapy designed to provide long-term hearing to individuals with profound congenital hearing loss caused by otoferlin gene mutations. DB-OTO is currently being evaluated in a Phase 1/2 clinical trial known as CHORD. The gene therapy aims to deliver a functional copy of the otoferlin gene to inner ear hair cells, potentially enabling hearing restoration.

The acquisition also includes two earlier-stage gene therapies, AAV.103 and AAV.104, targeting other genetic forms of hearing loss – GJB2 and STRC respectively. Both utilize a similar AAV gene delivery approach to DB-OTO.

According to Regeneron, the addition of Decibel’s pipeline and capabilities will strengthen its genetic medicines portfolio. Gene therapy has become a major focus for Regeneron beyond its foundational expertise in antibodies. The company is exploring gene silencing, gene editing and gene therapy technologies across a range of therapeutic areas.

Take a look at Ocugen Inc., a biotechnology company focused on discovering, developing and commercializing novel gene and cell therapies and vaccines.

Hearing loss represents a new area for Regeneron, building on an existing collaboration with Decibel. Integration of Decibel’s team and experience in inner ear biology and AAV gene therapy for hearing disorders will be invaluable as Regeneron advances the acquired programs.

Gene therapy aims to address disease at its genetic root cause by introducing functional genes into cells. The goal is to durably restore protein expression and correct the downstream impacts of gene mutations. Gene therapy has shown promise for treating rare monogenic disorders like certain forms of inherited hearing loss.

Both Regeneron and Decibel have utilized AAV vectors to deliver gene therapy payloads. AAV is considered one of the most effective vehicles for gene delivery and has an established safety profile. The viruses can be engineered to target specific cell types following injection into the body.

For DB-OTO, the AAV vector carries a functional copy of the otoferlin gene. Inner ear hair cells are the targets for gene transduction. Otoferlin protein is critical for hearing signal transduction, but mutations in the encoding gene cause profound congenital deafness. Gene therapy aims to restore otoferlin expression and regain hearing function.

Regeneron’s push into gene therapy aligns with its mission of tackling serious diseases with novel technologies. Gene-based treatments have potential for one-time curative therapies. The acquisition of Decibel’s pipeline further diversifies Regeneron’s genetic medicine capabilities as it aims to help patients worldwide.