Gurnet Point L.P. To Acquire Innocoll Holdings PLC (NASDAQ:INNL)

Innocoll Holdings PLC (NASDAQ:INNL)

Innocoll Holdings PLC (NASDAQ:INNL) and Gurnet Point L.P. reported that they have finalized terms of an acquisition deal. Under the recommended proposal, Gurnet Point will buy Innocoll for cash with the price fixed at $1.75 per share, and up to $4.90 from a contingent value right, for a total proposed per share price of up to $6.65 or up to almost $209 million in aggregate.

The details

The preliminary cash consideration of $1.75 shows a premium of almost 120% to the closing price per INNL shares on March 10, the last trading day before the date that inconsistent movement in Innocoll’s shares began. During the offer phase, Gurnet Point intends to offer a term loan of $10 million to provide Innocoll Holdings PLC (NASDAQ:INNL) additional resources for the continued advancement of XARACOLL across the post-operative pain industry. The company believes that the loan will offer it with the funds required to get set for the re-submission of the NDA for XARACOLL to the U.S. FDA and achieve the CVR objectives.

This transaction comes on Gurnet Point’s plan of investing in medical technology, healthcare, and life science firms. Since its initial public offering in 2014, the company has leveraged its collagen-based technology to close two Phase III trials for XARACOLL. This drug candidate was advanced through controlled delivery of bupivacaine in clinical trials.

Innocoll Holdings PLC (NASDAQ:INNL) reported that its board had evaluated a sale of the firm, to achieve its objective of bringing XARACOLL to industry, as well as keeping the firm independent and financing over $100 million needed to fund business operations through 2019. The “go-it-alone” alternative was rejected following the potential for execution risk and considerable shareholder dilution. A potential licensing deal for ‘XARACOLL’ in the U.S. was also considered, however no suitor was identified.

Jonathan Symonds, the Chairperson of Innocoll Holdings PLC (NASDAQ:INNL), reported that having explored numerous strategic alternatives over the past months, the management and Board consider this strategic deal will give company access to the financial resources it requires to pursue its objectives of bringing XARACOLL through its advancement to commercialization, and fill important medical gaps in the post-operative pain industry. The management consider that the combined leadership, supported by financial strength of Gurnet, will place Innocoll to follow a successful NDA filing.

4/06/2017
Ticker Symbol INNL
Last Price a/o 3:21 PM EST  $2.19
Average Volume 1.35M
Market Cap (mlns) $ 69.18M
Shares Outstanding (mlns) 31.59M
Share Float (mlns) 21.08M
Inside Ownership 10.80%
Short Float 2.50%
Short Interest Ratio 0.39
Quarterly Return 222.06%
YTD Return 217.39%
Year Return -72.69%

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Monica Gray has an undergraduate degree in Accounting and an MBA – earned with Honors. She has six years of experience in the financial markets and has been a securities analyst for the past two years.

Author: Monica Gray

Monica has an undergraduate degree in Accounting and an MBA she earned - with Honors. She has six years of experience in the financial markets and has been an analyst for the past two years.

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