Shares in contract development and manufacturing (CDMO) firm Consort Medical (CSRT) were 42% higher today at £10.40 after it received an-all-cash-offer from Swedish company Recipharm, of £10.10 per share, valuing the firm at £505m on a fully diluted basis.
Broker Shore Capital believes the deal makes strategic sense for Recipharm as it would gain a footprint within devices where Consort has a strong presence in respiratory drugs and injectables. In addition it will gain access to the biologics market over the medium-term via Consort’s Syrina VapourSoft technology.
Prior to today’s offer the shares were trading around 40% below the highs seen in June last year, therefore the offer takes them back to within 15% of that peak.
Including debt the deal is worth £627m and represents 15.6 times last year’s earnings before interest, tax, depreciation and amortisation. (EBITDA)
Shares highlighted Consort Medical as a potential takeover target in February arguing that the share price weakness was probably temporary due the delayed launch of generic asthma treatment Wixela in the US.
Recipharm is listed on Nasdaq Stockholm and has a market capitalisation of approximately £824m . The company has identified £10m of synergies to be delivered in the next 18 months.
READ MORE ABOUT CONSORT MEDICAL HERE