Piramal Healthcare Limited, one of India's largest pharmaceutical and healthcare companies, has signed a definitive merger agreement with Minrad International, Inc, a provider of generic inhalation anaesthetics, to acquire Minrad.
Under the terms of the agreement, Minrad will merge with a newly incorporated wholly-owned subsidiary of Piramal. If the merger is completed, stockholders of Minrad will receive $0.12 per share in cash. In connection with the merger agreement, Piramal has also agreed to acquire Minrad's 8 per cent Senior Secured Convertible Notes from the note holders. Total consideration for the merger and acquisition of the notes, in cash plus the assumption of debt, will be approximately $40 million. The transaction is conditioned upon approval by Minrad's stockholders and other customary closing conditions. It is not subject to any financing contingency and is expected to close in the first quarter of 2009.
The strategic combination will give Piramal access to key intellectual property for the manufacture of inhalation anaesthetics, including process-based intellectual property for both sevoflurane and desflurane, and will provide Piramal an immediate entry into the US market for sevoflurane, the largest selling inhalation aesthetic in the US.
Piramal is a leading producer of halothane and isoflurane, while Minrad's product portfolio of inhalation anaesthetics consists of isoflurane, enflurane and sevoflurane. In addition, Minrad has filed an Abbreviated New Drug Application (ANDA) for desflurane with the US Food and Drug Administration (FDA).
Upon completion of the merger, the combined company will have a marketing and sales network across 108 countries with 178 distributors, capable of supplying anesthetic products to supply chain vendors and end users, including hospitals, pain management clinics, veterinary hospitals, university research centers, and medical industrial users.
Commenting on the acquisition, Ajay Piramal, Chairman, Piramal Group said, "The offer to Minrad is consistent with our commitment to build a serious global presence in Critical Care. We respect the leading work that Minrad scientists and workforce have built over the past many years. Our dedication to building the Critical Care business is a reflection of our commitment to knowledge and innovation, dynamic action and care that empowers - consistent with our Group's values."
David DiGiacinto, president of Minrad said, "The proposed transaction with Piramal is the result of an extended process undertaken by our Board of Directors and financial advisors to address the company's capital requirements. Our Board believes the transaction is in the best interests of all our stakeholders, and also allows our employees to continue growing the Minrad business as part of a global leader in anesthetic products. We hope to complete it as soon as possible."
The Boards of Directors of Piramal and Minrad have approved the transaction. Certain stockholders of Minrad, holding approximately 20 per cent of Minrad's outstanding common stock, have agreed to vote for approval of the merger with Piramal.
Concurrently, with the signing of the merger agreement, Piramal provided Minrad with a senior secured loan of $12 million to provide Minrad with capital for operations during the period preceding the closing of the merger.
Upon closing of the merger, Piramal expects the transaction to be accretive to its earnings for the fiscal year ending March 31, 2010.
UBS Investment Bank acted as exclusive financial advisor to Piramal Healthcare. Waller Lansden Dortch & Davis, LLP, Ashurst LLP and Reed Smith LLP acted as legal advisors to Piramal Healthcare in connection with the transaction. Barclays Capital Inc. acted as exclusive financial advisor to Minrad and Hodgson Russ LLP acted as legal advisor.