DENMARK—Novo Nordisk, a Danish global pharmaceutical company, has agreed to merge with Catalent, Inc. (Catalent) in a transaction that would also involve the acquisition of three fill-finish facilities from Novo Holdings A/S (Novo Holdings).
This acquisition is part of a transaction between Novo Holdings A/S, a holding and investment corporation responsible for managing the Novo Nordisk Foundation’s assets and fortune, and Catalent, with whom they have a long history of engagement.
Novo Nordisk’s Board of Directors has approved the transaction, determining that it is in the best interests of the company and its shareholders.
Evercore, Novo Nordisk’s independent financial advisor, has also presented the Board of Directors with a fair judgment, stating that the consideration for the three manufacturing sites is financially reasonable.
As part of the acquisition, Novo Nordisk has made financial commitments to Novo Holdings in amounts equal to the acquisition price for the three sites, as well as undertakings regarding the regulatory approval procedure.
The transaction will be completed as soon as possible following the merger of Catalent and its Novo Holdings subsidiary, which is expected to occur before the end of 2024, subject to the satisfaction of other standard closing conditions, such as approvals from Catalent shareholders and regulatory agencies.
The acquisition of the filling stations aligns with Novo Nordisk’s goal of addressing more diabetic and obese patients with current and future treatments.
It allows for the expansion of manufacturing capacity at scale and speed while also providing future flexibility and options for Novo Nordisk’s existing supply network, with the acquisition projected to steadily boost Novo Nordisk’s filling capacity beginning in 2026.
The three manufacturing sites, located in Anagni (Italy), Brussels (Belgium), and Bloomington (Indiana, United States), specialize in sterile medication filling.
According to the press statement, the three sites employ over 3,000 individuals and have continuous relationships with Novo Nordisk.
The three sites will be acquired with no recourse against Novo Holdings’ subsidiary, in accordance with the Catalent merger agreements.
The agreement states that Novo Nordisk will pay an upfront payment of US$11 billion for the three manufacturing sites.
The US$11 billion upfront payment includes enterprise value for the sites suggested by Novo Holdings’ acquisition of Catalent, as well as additional value for certain corporate assets and liabilities related to the acquired business.
The first payment is subject to adjustment for processing costs and changes in certain net debt items until closing.
Catalent will continue to operate independently from Novo Holdings and Novo Nordisk until the transaction is completed.
Novo Nordisk will fulfil all customer responsibilities at the three Catalent locations it is acquiring following the closing.
After the acquisition is completed, the parties will provide mutual transition services under customary terms and conditions.
Novo Nordisk’s president and CEO, Lars Fruergaard Jørgensen, expressed satisfaction with the acquisition, stating that it complements the company’s existing investments in active pharmaceutical ingredients facilities and adds strategic flexibility to its supply network.
Depending on the timing of the transaction, the acquisition is estimated to have a low single-digit negative impact on operating profit growth in 2024 and 2025.
Because the acquisition will be financed mostly through debt, the previously announced share buyback program of DKK 20 billion (US$2.88 billion) will be unaffected.