Vectura Group agrees to £958 million takeover deal by Carlyle Group

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 Vectura Group agrees to £958 million takeover deal by Carlyle Group
Image source: Iryna Rahalskaya,Shutterstock

Summary

  • VEC shareholders will receive GBX 155 per share upon the completion of the deal.
  • The acquisition would be expected to become effective by Q3 FY21.
  • Flutiform®continues to broadly maintain the market share.

Vectura Group PLC (LON: VEC) is the healthcare stock listed on the London stock exchange. VEC’s shares have generated a return of 77.83% in the last 12 months. VEC is listed on the FTSE 250 index.

On 27 May 2021, the Company will hold its Annual General Meeting.

Company Overview

Vectura Group PLC is focused on the research, development and commercialization of drug delivery system and therapeutic system. Moreover, the Company is an industry-leading specialist in inhalation CDMO. VEC has around 11 key inhaled and 11 non-inhaled products, which are marketed by key partners with royalty streams. The key partners include Hikma, Sandoz, Novartis, Kyorin, Bayer, etc.

Acquisition Offer by Murano Bidco Limited

On 26 May 2021, the Company had reached an agreement regarding the cash offer made by Murano Bidco Limited (indirectly controlled by Carlyle Europe Partners V Fund) for the total consideration of approximately £958 million, illustrating a premium of almost 27% from the closing price of GBX 125 per share as of 25 May 2021. Moreover, each VEC shareholder will receive GBX 155 upon the completion of the deal. The deal would be expected to get completed by the third quarter of 2021.

Trading Update (as of 26 May 2021)

Significant progress of CDMO strategy – VEC has an impressive pipeline of potential deals. The Company had anticipated revenue contribution from CDMO service-based agreements to reach more than triple from the levels achieved during FY20.

Substantial reduction of R&D operations – The Company aims to reduce R&D operations at the Group's Muttenz site by 2022. Moreover, the Company had signed a put option for the sale of an oral manufacturing facility in Lyon, and the disposal would be expected to complete by the end of 2021.

Ongoing impact of the Covid-19 pandemic – The Q1 FY21 market volumes remained similar to the levels seen during Q3 FY20 and Q4 FY20. Moreover, the revenue would be expected to remain lower than the forecasted range from £75 million to £80 million. It is anticipated that flutiform® continues to broadly maintain the market share.

One Year share price performance of Vectura Group PLC

(Data Source: REFINITIV)

VEC shares were trading at GBX 161.30 and were up by close to 32.21% as of 26 May 2021 at 09:01 AM GMT. The 14-day RSI stood at ~88.71, while the 20-day simple moving average was around GBX 119.98. VEC’s 52-week Low and High were GBX 84.60 and GBX 163.80, respectively. Vectura Group PLC had a market capitalization of around £727.87 million.

Business Outlook

VEC would focus on the execution of a services-based strategy during 2021. However, the revenues from co-development contracts during FY21 were expected to remain on similar lines as that of FY20. Furthermore, the royalties and other marketed revenues would be expected to remain the same during FY21 as that of FY20 since the revenues benefitted from USD 17.3 million approval milestones in 2020 after the approval of generic Advair® and Enerzair® Breezhaler®. VEC had anticipated recognizing further royalty payments related to Ellipta® during Q2 2021 and royalties arising from the resumed launch of generic Advair® in April 2021.

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