Sucampo launches tender offer to acquire R-Tech Ueno

Sucampo Pharmaceuticals, Inc has announced the acquisition of Japan’s T-Tech Ueno.

Sucampo has announced the launch of an all-cash tender offer to acquire all outstanding shares of R-Tech Ueno for a total consideration of JPY33 billion (approximately $278 million) inclusive of approximately $54 million in cash and 2.5 million Sucampo shares (5.5% of shares outstanding). The purchase price reflects a 16 per cent premium over R-Tech Ueno’s one-month volume weighted average price and a 16 per cent premium over R-Tech Ueno’s three-month volume weighted average price.

Assuming the acquisition completion does smoothly, Sucampo expects to achieve net income of $55 million to $60 million – earnings per share of $1.20 to $1.30 – and adjusted EBITDA of $95 million to $100 million for the full year 2016. In addition, Sucampo expects to achieve pre-tax operational synergies of approximately $5 million on an annualized basis in 2016. The company does not expect the acquisition to have a material impact on 2015 results, given the expected timing of transaction close.

Peter Greenleaf, Chief Executive Officer of Sucampo, pictured, states: “This immediately accretive transaction accelerates Sucampo’s growth and delivers on our strategic objectives of strengthening our financial performance and diversifying and expanding our product development pipeline. I believe that this transaction will continue to drive both the transformation of our company and increased value for our shareholders.”

The transaction has many strategic benefits, including improved financial position and immediate accretion, with increased revenues, enhanced profitability, and stronger cash flow generation; a greater supply chain control and the Expansion and diversification of Sucampo’s pipeline for development or outlicensing, through acquisition of several assets in major therapeutic areas.

In the tender offer, which has been unanimously approved by the Board of Directors of both companies, Sucampo’s Japanese subsidiary Sucampo Pharma, LLC will offer JPY1,900per share in cash for the shares of R-Tech Ueno. The tender offer will be conducted in Japan under a tender offer registration statement filed with the Kanto Local Finance Bureauin accordance with applicable Japanese law.

Sucampo is expecting to acquire 56% of the outstanding shares of R-Tech Ueno in the tender offer. Separately, Sucampo has entered into agreement with R-Tech Ueno’s founders and a related entity to acquire the remaining 44% of shares for JPY1,400 per share; the closing of this share purchase is conditioned on the closing of the tender offer.

The tender offer period is expected to end on October 13, 2015, assuming the offer achieves the minimum acceptance threshold, regulatory approvals and other customary conditions, subject to our right to extend the offer. The aggregate acquisition price of R-Tech Ueno will be approximately $278 million. Sucampo expects to close the acquisition in the fourth quarter of 2015.


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