Miravo Healthcare™ enters into agreement with Searchlight Pharma Inc.

Miravo Healthcare and Searchlight Pharma Inc., a private Canadian-based specialty healthcare company, are pleased to announce that they have entered into a definitive agreement pursuant to which the Purchaser has agreed to acquire all of the issued and outstanding common shares of the Company in exchange for cash consideration of $1.35 per Company Share, representing a 79.8% premium to the 90-day volume-weighted average trading price of the Company Shares on the Toronto Stock Exchange for the period ended December 22, 2022. The transaction will be completed by way of an arrangement under Section 182 of the Business Corporations Act. In connection with the closing of the Arrangement, all of the indebtedness (including convertible debt) owed to funds affiliated with Deerfield Management Company, in the aggregate principal amount of approximately US$78.1 million, will be repaid in full and the Company’s outstanding warrants will be cancelled for no consideration.

The purchase price of $1.35 per Company Share represents a total equity value of the Company, on a fully diluted basis, of approximately $15.8 million and a total enterprise value of the Company of approximately $91.4 million.

“We are pleased to present an opportunity for shareholders of the Company to realize value at a significant premium to the trading price of the Company Shares,” commented Jesse Ledger, Miravo’s President & CEO. “After careful deliberation, the Company’s Board of Directors has unanimously concluded that the transaction is in the best interests of the Company and is fair to the Company’s shareholders. Not only does an all-cash transaction provide immediate and certain value to shareholders, it also allows important healthcare products like Blexten®, Cambia® and Suvexx® to remain available to healthcare providers and patients through the enhanced scale of the Searchlight business.”

“This transaction presents a unique opportunity to add critical mass to Searchlight’s expanding business, and importantly, to onboard a proven team that we think shares a similar culture and set of foundational values,” said Mark Nawacki, President and CEO at Searchlight. “We are excited that Miravo will add a portfolio of growing, category-leading brands in new therapeutic areas to our commercial business and that we will expand and have team members and offices in Montreal, Toronto and Dublin. We are confident that Miravo’s depth of talent, competencies and resources, which we are acquiring through this transaction, will enhance our competitiveness and ensure a seamless transition to patients and end customers.”

Recommendation of Miravo board of directors
The board of directors of the Company (the “Board”), after receiving legal and financial advice, has unanimously determined that the Arrangement is in the best interests of the Company and is fair to the holders of Company Shares (the “Shareholders”). Accordingly, the Board approved the Arrangement Agreement and recommends that Shareholders vote in favour of the Arrangement at the special meeting of Shareholders to be called and held to approve the Arrangement. In making its recommendation, the Board considered a number of factors, including its receipt of an opinion from Bloom Burton Securities Inc., which concluded that, as at December 22 2022, the consideration payable to the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (the “Fairness Opinion”).

Additional transaction details
Each of the directors and executive officers of the Company who are Shareholders, as well as one of the Company’s significant Shareholders, Red Oak Partners, LLC, who collectively own or control, directly or indirectly, approximately 23.16% of the Company Shares, have entered into voting support agreements with the Purchaser to, among other things, vote their Company Shares in favour of the Arrangement.

In order to become effective, the Arrangement will require court approval and must be approved by: (i) at least two-thirds of the votes cast by Shareholders, and (ii) a simple majority of the votes cast by Shareholders, excluding for this purpose votes attached to Company Shares held by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transaction.

In addition to court and shareholder approval, the Arrangement is subject to, among other things, the satisfaction or waiver of certain closing conditions customary in transactions of this nature. Subject to the satisfaction of such conditions, the Arrangement is expected to close in the first quarter of 2023.

The Arrangement Agreement includes representations, warranties and covenants typical of a transaction of this nature, along with customary provisions relating to non-solicitation, subject to customary “fiduciary out” provisions that entitle the Company to consider and accept a superior proposal if the Purchaser does not match such proposal. The Company has agreed to pay a termination fee to the Purchaser, if the Arrangement Agreement is terminated in certain circumstances, including if the Company enters into an agreement with respect to a superior proposal or if the Board withdraws its recommendation with respect to the Arrangement.

The Arrangement is to be funded in part with equity commitments from investors of the Purchaser and committed debt financing by certain Canadian lenders. The Purchaser has agreed to pay a reverse termination fee to the Company if the Arrangement Agreement is terminated in certain circumstances, including if the Purchaser materially breaches a representation or warranty or fails to materially perform a covenant, which breach is not cured, and if after all other conditions to the closing of the Arrangement have been satisfied or waived, the Purchaser is not in a position to fund the closing of the Arrangement. Business Wire