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Home Market News POZEN and tribute announce plan to proceed with merger to form Aralez Pharmaceuticals
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8 Dec 2015

POZEN and tribute announce plan to proceed with merger to form Aralez Pharmaceuticals

Canada domicile provides similar competitive structure and benefits to Ireland.

POZEN and Tribute Pharmaceuticals Canada have confirmed their merger plans and announced that they have entered into an amended agreement and plan of merger, which among other things, moves the domicile for their proposed parent company, Aralez Pharmaceuticals from Ireland to Canada. This alternative transaction structure, the parties believe, is in the best interest of their respective securityholders. The companies previously announced in June 2015 that POZEN would acquire Tribute and the combined company would be renamed Aralez Pharmaceuticals. With planned business operations in Ireland, Canada and the US, the Canadian domicile offers a substantially similar corporate and tax structure to the previous Irish domicile, and will benefit from Tribute's business foundation and strong presence in Canada where Tribute is incorporated and from where it has always operated.

POZEN's proxy statement relating to the proposed transaction dated November 6, 2015 and Tribute's Management Proxy Circular dated 6 November 2015, mailed by the parties to their respective securityholders, will be withdrawn and new filings will be made with the requisite regulatory authorities to reflect changes and updates to the transaction structure. As a result, the meetings of the securityholders of Tribute and POZEN scheduled for 9 and 10 December, respectively, have been cancelled and new meeting dates will be set and communicated in subsequent proxy materials. The transaction is expected to close in the first quarter of 2016. It is a condition of closing that the common shares of Aralez be approved for listing on the NASDAQ and conditionally approved on the TSX. In connection with the acquisition, a syndicate of leading healthcare investors, led by Deerfield and including QLT, Broadfin Capital and JW Asset Management, has confirmed their commitment of up to US$350 million in growth capital for the combined company, intended to support the anticipated commercial launches of YOSPRALA and Fibricor, as well as future potential product and company acquisitions. Such financing is expected to close immediately prior to closing of the transaction with POZEN and Tribute. The proposed investment in Aralez includes:

  • US$75 million of equity in Tribute immediately prior to closing of the transaction at a price per share equal to (a) the lesser of (i) US$7.20, and (ii) a 5% discount off the five day volume weighted average price (VWAP) per share of POZEN common stock, calculated over the five trading days immediately preceding the date of closing, not to be less than US$6.25, multiplied by (b) .1455 (the conversion ratio). In the event any of POZEN, Tribute or Aralez announce a material event (other than results of any shareholder meeting) during the 10-day period immediately preceding closing, the VWAP lookback period will be reduced from 5 days to 2 days.
  • US$75 million in 2.5% convertible senior secured notes due six years from issuance with a conversion price equal to a 32.5% premium to the aforementioned equity price.
  • Up to US$200 million committed secured debt facility to fund future acquisitions.

    • "The change in domicile for Aralez remains consistent with our overall vision and strategy for the company and is expected to deliver similar competitive advantages to an Irish domicile," said Adrian Adams, Chief Executive Officer of POZEN Inc. "We continue to maintain a presence in Ireland through an operating company that holds intellectual property, including YOSPRALA, and from which Aralez plans to execute its acquisition strategy. We are pleased that the Deerfield-led syndicate continues to be supportive of our growth strategy."

    "We are pleased with the alternative transaction structure and the plan to proceed with a Canadian domicile," said Rob Harris, President and Chief Executive Officer of Tribute. "We believe that the new structure will benefit from Tribute's business foundation in Canada and provide a platform for continued growth."

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