Mallinckrodt announced it has entered into a definitive agreement to sell its subsidiary BioVectra to an affiliate of H.I.G. Capita for approximately $250 million, including fixed consideration of $175 million, comprised of an upfront payment of $135 million and a long-term note for $40 million, and contingent payments of up to $75 million.
BioVectra is a contract development and manufacturing organization (CDMO) and it will continue to supply an active pharmaceutical ingredient supporting Mallinckrodt's specialty brands business under a long-term arrangement. The transaction is anticipated to include all of BioVectra's sites in Prince Edward Island and Nova Scotia, Canada, as well as its employee base.
"This transaction continues to advance Mallinckrodt's strategic focus on branded, high-growth biopharmaceuticals by monetizing a non-core business," said Mark Trudeau, president and CEO of Mallinckrodt. "While we recognize the longer-term growth potential for BioVectra, we believe that the structure of this deal enables us to participate in the future success of the business, and therefore we see this sale as the best option for both Mallinckrodt and BioVectra moving forward."
The transaction is expected to close in the fourth quarter of 2019. The company intends to use the proceeds from this divestiture consistent with its previously disclosed capital allocation priorities.
Read the full Mallinckrodt release