November 10, 2015 7:42am

Astellas Pharma Inc. (TSE: 4503), and Ocata Therapeutics, Inc. (NASDAQ: OCAT, have entered into a definitive agreement. Under the agreement, Astellas will acquire Ocata through Laurel Acquisition Inc., a wholly-owned subsidiary of Astellas US Holding, Inc. (Laurel). The boards of directors of both Astellas and Ocata have unanimously approved the agreement.

 

Pursuant to the agreement, Laurel will commence a tender offer for all outstanding shares of common stock of Ocata, for a price of ... $8.50 per share in cash (tender offer).

 

Upon successful completion of the Tender Offer, Laurel will be merged into Ocata, and any remaining shares of common stock of OCAT will be canceled and converted into the right to receive the offer price (except for shares held by stockholders who properly demand appraisal rights under Delaware law). The board of directors of Ocata has resolved to recommend that OCAT's stockholders tender into the Tender Offer.

Each of the directors and executive officers of Ocata entered into support agreements with Astellas and Laurel, pursuant to which such directors and officers, among other things, agreed to tender the shares of common stock of Ocata that they hold into the Tender Offer. Shares held by these directors and officers represent, in the aggregate, approximately 1.7% of the share of common stock of Ocata outstanding on this date.

 

The Bottom Line:  The acquisition of OCAT represents the unmet medical needs of patients suffering from severe ophthalmic diseases. The acquisition also represents a step toward achieving Astellas' Strategic Plan 2015-2017.  Further, acquiring Ocata will enable Astellas to establish a presence in ophthalmology and a leading position in cell therapy with OCA  taking a key role in Astellas' R&D in ophthalmology and cell therapy."

  • Consummation of the transaction is subject to customary closing conditions, including antitrust approvals and the tender of a majority of Ocata's shares of common stock on a fully diluted basis;
  • The offer price represents a premium of 79% to Ocata's closing share price of $4.75 on November 6, 2015;
  • The all-cash transaction is valued at approximately $379 million including the purchase of all common shares, options, warrants and other securities;
  • The tender offer period is expected to commence no later than November 25, 2015, and will expire 20 business days after its commencement, unless otherwise extended. If the Tender Offer conditions are not satisfied, Astellas may be required to extend the Tender Offer under certain circumstances; however, in no event will Astellas be obligated to extend the Tender Offer beyond May 9, 2016;
  • The tender offer and consummation of the acquisition is expected to have a minor impact on Astellas' financial results for the fiscal year ending March 31, 2016.

 

Citigroup Inc. is acting as exclusive financial advisor to Astellas and Covington & Burling LLP is acting as legal counsel. Jefferies LLC is acting as exclusive financial advisor to Ocata and Goodwin Procter LLP is acting as legal counsel.

 

Astellas Pharma Inc., based in Tokyo, Japan, is a company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products. We focus on Urology, Oncology, Immunology, Nephrology and Neuroscience as prioritized therapeutic areas while advancing new therapeutic areas and discovery research leveraging new technologies/modalities. We are also creating new value by combining internal capabilities and external expertise in the medical/healthcare business. Astellas is on the forefront of healthcare change to turn innovative science into value for patients.