Vectura and Skyepharma (SKP) have announced they have reached a merger agreement; under the terms of the deal SKP shareholders will be entitled to receive 2.7977 new Vectura shares for every SKP share, valuing the company at £441.3m or 410.15p per share. Our last published valuation (A shining start to 2016) of SKP is 422p/share. The rationale for the merger is to combine the complementary inhalation businesses and create an industry-leading respiratory speciality business to accelerate growth in the global inhaled market and provide shareholders of the enlarged company with a broader product and development portfolio. Based on the closing share price on 15 March, the newly enlarged group would have had a proforma market capitalisation of £1,014.3m.
Vectura directors have highlighted pre-tax synergies of £10m per year (to be realised by calendar year-end 2018) related to cost savings in administration costs and general procurement benefits from the enlarged group’s scale.
Based on the closing share price at 15 March, the newly enlarged group would have a pro-forma market capitalisation of £1,014.3m, pro-forma combined revenues of £153.9m and pro-forma combined EBITDA of £50.5m (based on the last reported full-year results for both companies).