Mallinckrodt And Questcor Pharma To Merge In $5.6 Bln Deal - Quick Facts

(RTTNews) - Specialty pharmaceuticals company Mallinckrodt plc (MNK) and Questcor Pharmaceuticals Inc. (QCOR) announced Monday that they have entered into a definitive merger agreement by which Mallinckrodt will acquire Questcor in a transaction valued at about $5.6 billion.

The transaction was unanimously approved by the Boards of Directors of both companies. The transaction is currently expected to be completed in the third calendar quarter of 2014.

As per the terms of the transaction, Questcor shareholders will receive $30.00 per share in cash and 0.897 Mallinckrodt shares for each share of Questcor common stock they own, for a total approximate consideration of $86.10 per Questcor share.

Upon completion of the merger, Mallinckrodt shareholders will own approximately 50.5% and former Questcor shareholders will own approximately 49.5% of the combined company's stock.

Based on the closing price of Mallinckrodt and Questcor on April 4, 2014, the total per share consideration represents a premium of approximately 27% per share over Questcor's stock price, and a premium of approximately 33% over Questcor's trailing 20-trading-day volume-weighted average price.

Mallinckrodt expects the transaction to be immediately accretive to its fiscal year 2014 adjusted diluted earnings per share, and significantly accretive to its fiscal year 2015 adjusted diluted earnings per share.

The combined company will be led by Mark Trudeau, President and Chief Executive Officer of Mallinckrodt. It is expected that, following closing of the transaction, Mallinckrodt's Board of Directors will be increased to twelve members, with the addition of three directors from Questcor.

The three directors will include Bailey and two current, independent directors of Questcor: Angus C. Russell and Virgil Thompson.

Melvin Booth, the current Chairman of Mallinckrodt's Board of Directors, will continue in that role after the transaction is completed.

The transaction is subject to the approval of the shareholders of both companies, as well as Hart-Scott-Rodino clearance in the U.S.