Alliance Pharma PLC on Friday said it agreed to a takeover by its largest shareholder, DBAY Advisors Ltd.
The Chippenham, Wiltshire-based distributor of consumer healthcare brands and prescription medicines said the deal prices each share in the company at 62.5 pence, a 41% premium to its 44.4p closing price on Thursday.
It is more than double the closing price of 29.4p on May 8, the day before DBAY first made an M&A approach to the Alliance Pharma board.
The deal values the company at around £349.7 million.
Alliance Pharma shares surged 38% to 61.10 pence each on Friday morning in London, giving it a market capitalisation of £330.8 million.
The deal also has an alternative option for shareholders to receive an unlisted share alternative.
The acquisition is expected to become effective in the first half of 2025.
‘DBAY has followed Alliance’s story for several years and began acquiring Alliance shares in December 2022,’ a statement said.
DBAY has a roughly 28% stake in the company.
‘DBAY is supportive of Alliance’s leadership team and believes in Alliance’s future prospects but considers that Alliance needs to implement a range of operational and strategic initiatives, in conjunction with a period of accelerated investment and selective acquisitions of complementary products, in order to fulfil the growth potential of the business. It has become apparent to DBAY that Alliance needs time away from the public market to allow it to fully deliver these initiatives in a reasonable timeframe.’
Alliance Pharma’s board backed the cash deal.
Alliance Pharma Non-Executive Chair Camillo Pane said: ‘Since initial public offering, Alliance has grown to become a globally diversified player in the consumer healthcare market. Alliance now has several leading brands across its priority categories and a global operating platform. Led by our Chief Executive Officer Nick Sedgwick, who joined in May 2024, management is developing a plan to return to consistent, profitable growth in our target markets.
‘Whilst the board has confidence in Alliance’s strategy and team, many of the planned initiatives are at a relatively early stage, retain an element of execution risk and will take time to deliver value. The board of Alliance believes that the offer from DBAY represents an attractive and certain value in cash today for our shareholders.’
London-based investment company Logistics Development Group PLC positively noted the deal.
Logistics Development has a 13% stake in Alliance Pharma, through Fixtaia Ltd. Shares in Logistics Development rose 4.0% to 14.30p each on Friday morning in London.
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