Jazz Pharma to acquire rival for $7.2bn

BY Richard Summerfield

Jazz Pharmaceuticals Plc has agreed to acquire GW Pharmaceuticals Plc in a $7.2bn cash and stock deal.

Jazz will acquire GW for $220 per American depositary share – $200 in cash and $20 in Jazz shares. The offer price represents a 50 percent premium to GW’s closing price on Tuesday, the day before the deal was announced. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2021.

GW’s product line has a number of notable medications for cancer and other conditions and diseases. It is perhaps best known for a cannabis-based epilepsy treatment called Epidiolex, which was approved by the US Food and Drug Administration in June 2018. The drug’s active compound, cannabidiol, produces an anticonvulsant effect through its interaction with prominent components of the nervous system.

“Jazz is proud of our leadership position in sleep medicines and rapidly growing oncology business,” said Bruce Cozadd, chairman and chief executive of Jazz Pharmaceuticals. “We are excited to add GW’s industry-leading cannabinoid platform, innovative pipeline and products, which will strengthen and broaden our neuroscience portfolio, further diversify our revenue and drive sustainable, long-term value creation opportunities.”

He continued: “We are joining two teams that share a passion for, and track record of, developing differentiated therapies that advance science and transform the lives of patients. This will help facilitate a successful integration and bring added capabilities to Jazz. Given the strength of our balance sheet and the meaningful financial drivers of the transaction, we are confident in the value we can deliver to both companies’ shareholders and patients. We look forward to welcoming the GW team to Jazz to build an even stronger company.”

“Over the last two decades, GW has built an unparalleled global leadership position in cannabinoid science, including the successful launch of Epidiolex, a breakthrough product within the field of epilepsy, and a diverse and robust neuroscience pipeline,” said Justin Gover, chief executive of GW Pharmaceuticals. “We believe that Jazz is an ideal growth partner that is committed to supporting our commercial efforts, as well as ongoing clinical and research programs.

“We have a shared vision of developing and commercialising innovative medicines that address significant unmet needs in neuroscience and an approach of putting patients first,” he added. “Together, we will have an opportunity to reach and impact more patients through a broader portfolio of neuroscience-focused therapies than ever before.”

Jazz Pharma expects to fund the cash portion of the deal with a combination of cash on hand and debt.

News: Jazz Pharma in $7.2 billion deal for GW Pharma to add cannabis-based epilepsy drug

Corruption threatening global COVID-19 recovery, says new report

BY Fraser Tennant

Widespread corruption is undermining healthcare systems and threatening the global recovery from the coronavirus (COVID-19) pandemic, according to a new Transparency International report published this week.

In its ‘2020 Corruption Perceptions Index’ (CPI), Transparency International ranks 180 countries and territories by their perceived levels of public sector corruption, drawing on 13 expert assessments and surveys of business executives. The index uses a scale of zero (highly corrupt) to 100 (very clean).

According to the CPI, corruption poses a critical threat to citizens’ lives and livelihoods, especially when such behaviour is combined with a public health emergency such as COVID-19.

At the upper end of the CPI, clean public sectors correlate with greater investment in healthcare. Uruguay, for example, at 71 on the scale, has the highest CPI score in Latin America, invests heavily in healthcare and has a robust epidemiological surveillance system, which has aided its response to COVID-19 and other infectious diseases. 

In contrast, Bangladesh, at 26 on the scale, invests little in healthcare while corruption flourishes during COVID-19, ranging from bribery in health clinics to misappropriated aid. Corruption is also pervasive in the procurement of medical supplies. Countries with higher corruption levels also tend to be the worst violators of rule of law and democratic institutions during the COVID-19 crisis.  

“COVID-19 is not just a health and economic crisis, it is a corruption crisis,” said Delia Ferreira Rubio, chair of Transparency International. “And one that we are currently failing to manage. The past year has tested governments like no other in memory, and those with higher levels of corruption have been less able to meet the challenge. But even those at the top of the CPI must urgently address their role in perpetuating corruption at home and abroad.”

To reduce corruption and better respond to future crises, Transparency International recommends that all governments: (i) strengthen oversight institutions to ensure resources reach those most in need; (ii) provide anti-corruption authorities and oversight institutions with sufficient funds, resources and independence to perform their duties; and (iii) ensure open and transparent contracting to combat wrongdoing, identify conflicts of interest and ensure fair pricing.

“It is not surprising to see that there is a correlation between a country’s index score and their response to COVID-19,” said Michael Harris, financial crime consultant at LexisNexis Risk Solutions. “The pandemic exemplifies the impact corruption can have on government systems and more needs to be done to tackle this problem, including strengthening institutional oversight and ensuring thorough due diligence is carried out, regardless of the wider circumstances.”

Report: 2020 Corruption Perceptions Index (CPI)

Australia’s Speedcast confirms restructuring via Chapter 11

BY Fraser Tennant

In a move designed to position itself for future growth, satellite communications provider SpeedCast International Ltd is to emerge from Chapter 11 bankruptcy protection after gaining bankruptcy court approval to restructure under a new owner, private equity firm Centerbridge Partners.

The Australian company decided to recapitalise its business through voluntary Chapter 11 proceedings in April 2020, citing the weakened demand for its connectivity services to cruise lines, oil rigs and other customer platforms following the outbreak of coronavirus (COVID-19).

Under the terms of a plan of reorganisation, Speedcast will emerge from Chapter 11 with a new $500m equity investment from Centerbridge, which will be used in part to repay all of its $285m debtor-in-possession (DIP) financing, as well as a permanent reduction of all its $634m senior secured debt.

The plan also provides for a cash payment to holders of secured claims and cash payment to certain of Speedcast’s critical trade vendors. Unsecured creditors will share in recoveries from a litigation trust.

“The court’s confirmation of the plan marks a key milestone in our efforts to become a stronger business and positions us to emerge in the near term, having achieved our goals,” said Stephe Wilks, chair of Speedcast. “Throughout the restructuring process, our global workforce has delivered on its commitments while adapting to change. On behalf of the Board, we are immensely grateful for the ongoing patience and trust that the company’s employees, customers and partners have shown in this process.”

Speedcast, which serves more than 3200 customers in over 140 countries, expects to emerge from the Chapter 11 process in the first quarter of 2021, subject to final regulatory approvals and satisfying customary closing conditions.

Following emergence, Joe Spytek, who has served as Speedcast’s president and chief commercial officer over the last year, will take on the role of chief executive, leading the company under the new Centerbridge ownership.

Mr Spytek concluded: “Speedcast is well-positioned to maximise its full potential as the company works to build a platform that addresses customers’ most demanding operations and application requirements now, and in the future.”

News: Speedcast to emerge from Chapter 11 with $500M Centerbridge investment

EVgo goes public in $2.6bn SPAC deal

BY Richard Summerfield

EVgo Services LLC, the wholly owned subsidiary of LS Power that owns and operates public fast chargers for electric vehicles, is to become a publicly traded company through a $2.6bn merger with special purpose acquisition company (SPAC) Climate Change Crisis Real Impact I Acquisition Corporation.

The deal is expected to provide EVgo with around $575m in net cash proceeds, including $400m from investors such as Pacific Investment Management Co LLC (PIMCO), BlackRock Inc and Wellington Management, among others.

“Just a few years ago, electric vehicles were considered niche,” said Cathy Zoi, chief executive of EVgo. “Today, improved technology, lower costs, greater selection, and a better appreciation for the performance of EVs is increasingly making them the vehicle technology of choice. With that, the need for fast charging is on the rise.

“An estimated 30% of Americans do not have access to at-home charging, and EVs will be increasingly deployed by fleets to transport goods and people in an environmentally-friendly way,” she added. “Time is precious for all of us, so a public fast charging option with an expanding footprint like EVgo is essential to meet the rapidly growing needs of EV drivers of all types.”

“EVgo is a crown jewel in our portfolio, and is one of the LS Power businesses leading the charge toward decarbonization,” said David Nanus, co-head of private equity at LS Power and chairman of EVgo. “EVgo’s extensive nationwide network and deep relationships with its customers and other stakeholders create a real competitive advantage for the company, and this business combination, which will both fully fund and accelerate the company’s growth plans, positions EVgo to further strengthen its market-leading position.”

EVgo has chargers in more than 800 locations in 67 major metropolitan markets across 34 states in the US. The company has landed a number of partnerships, including with Albertsons, Kroger and Wawa to install its chargers.

The company has also agreed deals with car manufacturers such as GM and Nissan, as well as ride-hailing companies Lyft and Uber. In July, GM and EVgo announced plans to add more than 2700 new fast chargers over the next five years. Though electric vehicles are still niche, they are expected to experience significant growth in the coming years.

News: EV charging network EVgo to go public via $2.6 billion SPAC deal

Citrix to acquire Wrike for $2.25bn

BY Richard Summerfield

Citrix Systems has announced that it has entered into a definitive agreement to acquire Slack competitor Wrike for $2.25bn in cash.

The deal, which has been unanimously approved by the board of directors of both companies, is expected to close in the first half of 2021, subject to regulatory approvals and other customary closing conditions. The combined company will have 400,000 customers across 140 countries.

Citrix plans to fund the transaction with a combination of new debt and existing cash and investments. The company has obtained a commitment from JPMorgan Chase Bank for a $1.45bn senior unsecured 364-day bridge loan facility.

Citrix said it expects Wrike to generate approximately 30 percent standalone growth in 2021 to between $180m and $190m in annual recurring revenue.

“Work today is happening everywhere – at home, in the office and on the road,” said David Henshall, president and chief executive of Citrix. “We believe that in the future, success will go to those companies that can support flexible and hybrid work models and provide a consistent, secure and efficient experience that removes the complexity and noise from work so employees can focus and perform at their best, wherever they happen to be.

He continued: “Together, Citrix and Wrike will deliver the solutions needed to power a cloud-delivered digital workspace experience that enables teams to securely access the resources and tools they need to collaborate and get work done in the most efficient and effective way possible across any channel, device or location.”

“When it comes to the future of work, Citrix and Wrike share a common vision and mission: to reduce the complexity and chaos of work and empower every person, team, and organisation to achieve their very best,” said Andrew Filev, founder and chief executive of Wrike. “Together, we will unlock the workspace of the future, truly transforming the work experience and equipping people with an innovative set of solutions they can use to exceed goals and keep business moving forward.”

News: Citrix to buy Wrike for $2.25 billion