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Bausch Health bids on Synergy Pharmaceuticals for $200 million, but competing bids may follow

Bausch Health is the 'stalking horse' bidder, but other companies can submit offers

Pile of pills on a table
Synergy Pharmaceuticals recently filed Chapter 11 bankruptcy proceedings

Bausch Health Companies Inc (NYSE:BHC) has agreed to acquire biopharma Synergy Pharmaceuticals Inc (NASDAQ:SGYP) in a $200 million dollar deal.

The biopharmaceutical company recently filed for reorganization under Chapter 11 with the US Bankruptcy Court for the Southern District of New York.

Shares of Bausch Health jumped nearly 9% to $25.11 while shares of Synergy Pharmaceuticals plummeted more than 70% to $0.09 in Wednesday morning trading.

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The potential deal is known as a “stalking horse” offer, or an initial bid on a bankrupt company’s assets. Other interested companies will have the ability to submit competing bids.

Synergy focuses on the development of gastrointestinal therapies, including Trulance, its treatment for adults with chronic idiopathic constipation and irritable bowel syndrome with constipation.

The Canadian pharmaceutical company, which mainly develops eye health, gastroenterology and dermatology products, is hopeful that Synergy’s assets will bolster its Salix Pharmaceuticals business.

"We believe TRULANCE is a natural complement to XIFAXAN (rifaximin), and with the scale and strength of our sales footprint in GI and primary care, our Salix team will be able to offer physicians and patients multiple treatment options that span the types of irritable bowel syndrome,” said Bausch Health CEO Joseph C. Papa in the company’s press release.

Bausch Health said it does not require any financing to complete the acquisition.

If Bausch Health's bid is accepted, the deal is expected to close in the first quarter of 2019, subject to the approval of the bankruptcy court.

 

Contact Lenore Fedow at lenore@proactiveinvestors.com

Follow her on Twitter@LenoreMariee

Quick facts: Bausch Health Cos Inc

Price: 31.42 USD

NYSE:BHC
Market: NYSE
Market Cap: $11.17 billion
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