Novo Holdings Buying Catalent In A $16.5 Billion Deal

By Amit Chowdhry ● Feb 5, 2024

Catalent (a leader in enabling the development and supply of better treatments for patients worldwide) and Novo Holdings (a holding and investment company that is responsible for managing the assets and wealth of the Novo Nordisk Foundation) announced that they have entered into a merger agreement under which Novo Holdings will acquire Catalent in an all-cash transaction that values Catalent at $16.5 billion on an enterprise value basis.

Novo Holdings will buy all outstanding shares of Catalent for $63.50 per share in cash. The purchase price is a premium of 16.5% to the closing price of Catalent’s common stock as of February 2, 2024, the last trading day before this announcement, and a 47.5% premium to the 60-day volume-weighted average price as of February 2, 2024. The purchase price also represents a premium of 39.1% to the closing price of Catalent’s common stock on August 28, 2023, the last trading day before Catalent’s announcement that its Board of Directors formed a Strategic and Operational Review Committee to conduct a review of Catalent’s business, strategy and operations, and Catalent’s capital-allocation priorities to maximize value for all Catalent stockholders. Of Catalent’s 50+ global sites, Novo Holdings intends to sell three Catalent fill-finish sites and related assets acquired in the merger to Novo Nordisk, in which Novo Holdings has a controlling interest, shortly after the merger’s closing. These three sites are in Anagni, Italy; Bloomington, Indiana, USA; and Brussels, Belgium. This deal is aligned with Novo Holdings’ strategy of investing in established life science companies with strong long-term potential.

The merger is expected to close towards the end of the 2024 calendar year, subject to customary closing conditions, including approval by Catalent stockholders and receipt of required regulatory approvals. And the deal is not subject to any financing contingency.

Following an evaluation of possible value-maximizing alternatives, Catalent’s board unanimously determined that the transaction with Novo Holdings, which delivers a premium and certain cash value, is in the best interest of Catalent. Accordingly, the Catalent Board unanimously recommends that Catalent stockholders vote in favor of the merger.

Elliott Investment Management L.P. and certain of its affiliates have also entered into a support agreement pursuant to which they have agreed to vote their shares of Catalent common stock in favor of the merger.

Following the closing of the merger, shares of Catalent will no longer trade on the New York Stock Exchange and Catalent will become a private company.

Citi and J.P. Morgan are acting as financial advisors to Catalent. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to Catalent and Jones Day is serving as legal advisor to the Catalent Board of Directors. And Morgan Stanley is acting as financial advisor to Novo Holdings and Goodwin Procter LLP is serving as legal advisor to Novo Holdings.

KEY QUOTES:

“Over the past several years, Catalent has built a comprehensive end-to-end offering of services and capabilities to drive innovation in the healthcare system and improve patient outcomes. This transaction is a testament to our team’s hard work and dedication to this mission, and I am incredibly excited for this next step in our journey. We look forward to benefiting from Novo Holdings’ significant resources to accelerate investment in our business and enhance key offerings as we continue to offer premium development and manufacturing solutions for pharma and biotech customers.”

– Alessandro Maselli, President and Chief Executive Officer of Catalent

“This transaction delivers significant, certain and premium value to our stockholders. Novo Holdings believes in our vision and will provide Catalent with a strong foundation as we continue developing, manufacturing and supplying top products.”

– John Greisch, Executive Chair of the Catalent Board and Chair of the Strategic and Operational Review Committee

“We are excited to partner with Catalent as it enters a new phase of growth and accelerates its mission to develop, manufacture and supply products that help people live better and healthier lives. With our expertise and track record of investing in high quality life sciences businesses, we believe Catalent is a very good strategic fit. We are excited to support the Company’s stakeholders in the years ahead, especially employees and customers as they work to develop new products to benefit patients. As engaged investors committed to productive relationships with all our partners, we look forward to working with the Catalent team to realise the Company’s full potential.

“Importantly, our acquisition of Catalent is aligned with our mandate to invest in high quality life sciences companies for the benefit of the Novo Nordisk Foundation’s mission and philanthropic causes.”

– Kasim Kutay, CEO of Novo Holdings

“As a significant investor in Catalent, Elliott fully supports the transaction announced today. We believe that this transaction, which is the culmination of a process led by the Strategic and Operational Review Committee of the Catalent Board, clearly maximizes value for Catalent stockholders. We commend Catalent’s Board and management team for delivering this outstanding outcome.”

– Marc Steinberg, Partner at Elliott Investment Management L.P.