As consolidation activities continues to become more frequent in the biopharmaceutical sector, Horizon Pharma plc (NASDAQ: HZNP) announced this morning that they have made a bid to acquire competitor DepoMed Inc. (NASDAQ: DEPO) for $3 billion with debt included. The hostile $3 billion proposal was offered after DepoMed rejected a previous proposal made in May.
Horizon is offering $29.25 per share of DepoMed, a staggering 42 percent premium relative to DepoMed’s Monday closing value. The offer is valued at approximately $1.8 billion.
Horizon’s Chairman, President and CEO, Timothy P. Walbert, comments on the hostile bid, The strategic and financial benefits of our proposal are highly compelling. Given the significant revenue and operating synergies, as well as considerable tax savings, we would create substantial long-term value for DepoMed’s shareholders in addition to the immediate value realized through the proposed premium.”
Horizon has had a history of growing their business through acquisitions and hopes to grow more by acquiring DepoMed. In September of 2014, Horizon acquired Vidara Therapeutics for $660 million and then the following May, the company acquired Hyperion Therapeutics for $866 million.
Shares of Horizon were down almost 3 percent while DepoMed stock soared by more than 38 percent with the news.