Boston, MA 03/24/2014 (wallstreetpr) – Horizon Pharma Inc (NASDAQ:HZNP) is biopharm company focused on developing and commercializing of drugs targeted at unmet medical needs especially in pain, inflammatory and arthritis diseases. The $1.1 billion market capped company last week announced merger with Vidara Therapeutics International Inc. The company issued a preview into the combined company and what it will mean for the business.
Looking at the shares of Horizon since that news came out, they have been up. In the previous session, the shares gained 3.21 percent to $17.35, having opened at $17. Earlier on the shares changed hands between $16.44 and $17.42. The Friday session saw a significant amount of shares changing hands at 9.5 million against daily average of 2.78 million. Looking at the current share price, it is clear than an impressive turnaround has been attained, given that shares traded at the low of $2.11 in the past 12-month time frame.
With shares rising on the back of merger announcement, we look into the details of the proposed merger to see how Horizon and its shareholders will benefit from the arrangement.
Merger deal and new headquarter location
Horizon Pharma Inc (NASDAQ:HZNP) and Vidara agreed to $660 million merger deal. This will see Horizon move its headquarters to Ireland where Vidara is based. However, the chief executive of the combined company will be based at the North America headquarters.
The move to a deal between Horizon and Vidara which will result in the formation of Horizon Pharma PLC is part of a strategy by the Deerfiled-based Horizon to take advantage of the tax benefits in Ireland. Several other U.S. companies have inked deals with Ireland counterparts for the very reason.
The current Horizon CEO Tim Walbert will remain the CEO of the combined company in which Horizon will hold 74 percent stake while Vidara owns 26 percent stake.
Revenue growth
While the merger is modeled take advantage of Ireland’s favorable tax environment, Horizon will be able to significantly boost its revenue by adding Vidara’s products to its portfolio. Having generated $74 million revenue in its own in 2013, Horizon is expected to generate between $250 and $265 million revenue in 2014 with the merger sealed.
