Vectura lands $621M merger deal with SkyePharma

Vectura CEO James Ward-Lilley

Vectura has secured a friendly merger with SkyePharma that will see its chief executive depart as the combined company looks to a new and expanded future.

The deal, worth £441.3 million ($621 million), puts together two similar companies that are both based in the U.K. and develop treatments for asthma and other respiratory conditions.

Combined, the new company is estimated to have a market capitalization of just over £1 billion based on each respective valuation, with joint sales of £153.9 million and profits of around £50.5 million, according to the Financial Times.

The newly formed firm will be run by Vectura CEO--and former AstraZeneca ($AZN) exec--James Ward-Lilley, while Vectura's chairman Bruno Angelici will keep his role. SkyePharma's chairman Frank Condella will be staying on as Angelici's deputy.

But there's no room at the inn for Peter Grant, SkyePharma's CEO, who will be leaving the firm after four years at its helm.

Angelici said: "The merger of Vectura and SkyePharma is a key milestone in the execution of our strategy to become a leading specialty pharmaceutical company, focusing on airways-related disease. The addition of SkyePharma's pMDI technology will allow the enlarged group to access the inhaled product market in its entirety and the enlarged group's enhanced cash flow will better position it to consider attractive strategic opportunities which may emerge in the future."

Condella added: "The merger of SkyePharma and Vectura is a highly synergistic, value-enhancing transaction that will establish an industry leader in the development of inhalation products."

Vectura is offering SkyePharma shareholders 2.7977 new shares for each share held, valuing SkyePharma at £441.3 million--although SkyePharma shareholders can choose to receive a part of the offer in cash, Vectura said in a statement.

An all-stock deal would result in SkyePharma shareholders owning about 41.75% of the combined company, but if the £70 million available under the cash alternative is paid in full, SkyePharma shareholders would own about 37.62% of the new firm.

The deal comes as SkyePharma announced its preliminary financials today, which showed record sales of £95.9 million in 2015, up 30% on the year-ago period.

- read the FT story (sub. req.)