Sinovac Biotech Ltd. (NASDAQ:SVA)
Sinovac Biotech Ltd. (NASDAQ:SVA) has announced entering into an amalgamation agreement with its parent company Sinovac (Cayman) Limited and Sinovac Amalgamation Sub Limited, a fully owned subsidiary of Sinovac (Cayman) Limited. Under the agreement, Sinovac will be acquired by the parent company in a deal that is expected to cost $401.8 million. Sinovac Biotech Ltd is one of the major providers of biopharmaceutical products in China.
Under the terms of the amalgamation agreement, Sinovac (Cayman) Limited will take over the ownership of Sinovac Biotech Ltd for a cash deal amounting to US$7.00 per common share of the Company. This translates to a premium of 32.1% and 30%, respectively when compared to the 30- and 60-trading day volume-weighted average price of the stock before the company made the announcement on February 1, 2016.
The consideration represents an increase of around 13.3% from the initial US$6.18 per Share price offer in the deal that was announced earlier on February 1, 2016.
After sealing the amalgamation deals, the parent company will be owned by a group of companies comprised of C-Bridge Healthcare Fund II, L.P, Mr. Yin, SAIF, Advantech Capital L.P, Vivo Capital Fund VIII, L.P. and Vivo Capital Surplus Fund VIII, L.P.As of June 23, 2017, this Consortium had already owned around 29.5% of the company’s total issued and outstanding shares.
According to the terms of the amalgamation agreement, after the acquisition, the Amalgamation Sub will be combined into one company. After the agreement, all issued and outstanding shares of the amalgamation will be canceled and their holders will be given $7.00 per share in cash.
The buying Consortium plans to fund the deal using a cash pool collected from Vivo Capital, Advantech Capital, and C-Bridge Capital or their respective partners and affiliates. The transaction has been approved the boards of directors of all company’s involved.
The amalgamation is expected to be completed in the second quarter of the 2017 financial year and its completion is subject to customary closing conditions. It will also have to be approved by at least two-thirds of the shareholders of all companies involved.
Sinovac Biotech Ltd. (NASDAQ:SVA) gained 12.46% and closed the day at $6.41.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.