Spectrum Pharmaceuticals Inc. (SPPI) on Thursday agreed to buy Allos Therapeutics, Inc. (ALTH) for $1.82 per share in cash plus one Contingent Value Right or CVR, the companies said in a statement. The upfront portion of the deal is valued at up to $206 million on a fully-diluted basis, and $108 million net of Allos' cash balance at the end of 2011.
The companies noted that the CVR entitles Allos stockholders to an additional payment of $0.11 per share in cash if certain European regulatory approval and commercialization milestones for FOLOTYN, a folate analogue metabolic inhibitor, are achieved.
Under the agreement, Spectrum will commence a tender offer to buy shares of Allos.
The acquisition is expected to be accretive to Spectrum on a cash basis in the fourth quarter of 2012. It would also result in synergies of $40 to $50 million in 2013.
Rajesh Shrotriya, Chairman, Chief Executive Officer and President of Spectrum, said, "For Spectrum, this acquisition adds another diversified source of revenue, accelerates the development of our hematology franchise, and affirms our commitment to becoming a leader in the treatment of lymphoma."
"Because of our strong operating performance, cash reserves, fiscal discipline, and a revolving credit line, we do not need to issue any equity to close this transaction," he added.
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