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AbbVie to use committed financing for Pharmacyclics acquisition, plans to repurchase shares post-closing
By Lisa Kerner
Charlotte, N.C., March 5 – AbbVie Inc. will use a combination of existing cash, new debt and stock to fund its $21 billion acquisition of Pharmacyclics, Inc.
Under the terms of the transaction, AbbVie will pay $261.25 per share comprised of a mix of cash and AbbVie equity, according to a news release.
“The purchase price will be funded with cash of $152.25 per share, representing approximately 58% of the consideration, and $109 per share in AbbVie stock, representing approximately 42% of the consideration,” said executive vice president and chief financial officer Bill Chase during a conference call on Thursday.
“Given that there is an equity component of the financing, the final number of shares issued will be dependent on AbbVie’s share price at the time of closing,” Chase said.
“In order to optimize our deal structure, we intend to execute an accelerated share repurchase program promptly following the close of the transaction whereby we plan to repurchase at least half of the equity issued for this transaction.”
AbbVie’s board has authorized a $5 billion increase to the company’s existing share repurchase program, bringing the total authorization to $10 billion.
“We have committed bridge financing in place to fund the cash purchase price and the post-closing accelerated share repurchase program,” Chase noted.
The transaction is slated to close in the second quarter.
Morgan Stanley & Co. LLC acted as financial advisor to AbbVie.
AbbVie is a global, research-based biopharmaceutical company formed in January 2013 following separation from Abbot Laboratories. The company is based in Abbott Park, Ill.
Based in Sunnyvale, Calif., Pharmacyclics is a pharmaceutical company focused on cancer and other serious diseases.
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