COPENHAGEN, Denmark & SOMERSET, N.J. - In a significant move within the pharmaceutical and biotech service industry, Catalent, Inc. (NYSE: NYSE:CTLT) has agreed to be acquired by Novo Holdings in an all-cash transaction valued at $16.5B. The deal will result in Catalent stockholders receiving $63.50 per share, which is a 47.5% premium over the 60-day volume-weighted average price as of February 2, 2024.
The acquisition price reflects a 16.5% premium on Catalent's closing stock price on the last trading day before the announcement, and a 39.1% premium on the price from August 28, 2023, just before Catalent's review committee was formed to maximize stockholder value.
Novo Holdings intends to divest three of Catalent's fill-finish sites to Novo Nordisk (NYSE:NVO) (CPH: NOVO) following the transaction's conclusion. These sites are strategically located in Anagni, Italy; Bloomington, Indiana, USA; and Brussels, Belgium.
The merger aligns with Novo Holdings' investment strategy in life sciences and is expected to close by the end of 2024, pending customary closing conditions, including Catalent stockholder approval and regulatory clearances. Catalent will not host an earnings conference call due to the pending transaction, but will release its second quarter 2024 financial results on February 9, 2024.
Alessandro Maselli, Catalent's CEO, expressed enthusiasm for the future under Novo Holdings, citing the opportunity to enhance their offerings and accelerate business investment. John Greisch, Catalent's Executive Chair, emphasized the transaction's delivery of premium value to stockholders.
Novo Holdings CEO Kasim Kutay highlighted the partnership's potential for growth and commitment to improving health outcomes. Supporting the transaction, Marc Steinberg of Elliott Investment Management L.P. commended Catalent's board and management for maximizing stockholder value.
Upon completion, Catalent will become a privately-held company and will cease trading on the New York Stock Exchange. Financial advisory roles were filled by Citi and J.P. Morgan for Catalent, with legal advice from Skadden, Arps, Slate, Meagher & Flom LLP and Jones Day. Morgan Stanley (NYSE:MS) advised Novo Holdings, with Goodwin Procter LLP as legal counsel.
This transaction is based on a press release statement and is not an endorsement of the companies or their strategies.
InvestingPro Insights
In light of the recent acquisition announcement, Catalent's financial metrics and market performance provide an interesting context for investors. InvestingPro Tips suggest that while Catalent's net income is expected to grow this year, the stock is currently in overbought territory, and analysts are predicting the company will return to profitability within the year. This optimism is reflected in the strong return Catalent has seen over the last three months, with a 54.55% price total return, showcasing investor confidence which might have preceded the acquisition news.
Real-time data from InvestingPro shows a market capitalization of $9.85B and a notable revenue of $4.223 billion over the last twelve months as of Q1 2024. Despite a revenue decline of 12% over the same period, the gross profit margin remains healthy at 22.52%. These figures, coupled with the acquisition premium, underscore the strategic value Novo Holdings sees in Catalent.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available that could shed light on Catalent's valuation and market position. With a special New Year sale, an InvestingPro+ subscription is now available at up to a 50% discount. Use coupon code "SFY24" for an additional 10% off a 2-year subscription, or "SFY241" for an additional 10% off a 1-year subscription, to unlock a comprehensive suite of investment tools and insights.
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