NEW YORK (TheStreet) -- Gastrointestinal drugmaker Salix Pharmaceuticals (SLXP) announced it will acquire smaller biopharmaceutical company Santarus (SNTS) in a deal worth $2.6 billion. The purchase agreement of $32 a share provides a 39% premium to Santarus' average 30-day closing price. The transaction is expected to be finalized by the first quarter 2014.
In response, Salix shares gained 9.4% to $77.99 and Santarus soared 37.2% to $31.86 in after-hours trading.
Salix said the acquisition will help position the combined entity as the largest U.S. gastroenterology-focused drug company with annual product revenue of $1.3 billion.
"We are extremely pleased with the Santarus acquisition, which is transformative for Salix both commercially and financially, fulfilling many of our strategic needs, while providing immediate and significant accretion in 2014 and beyond," said Salix CEO Carolyn Logan in a statement.As part of the deal, the companies will merge salesforces, combine product portfolios and expand the number of health care prescribers in their database. The deal's revenue diversification will benefit its bottom line as no one product is expected to bring in more than 50% of total revenue (this, as Ariad Pharmaceuticals learnt late October, is an important consideration). After the bell, San Diego-based Salix reported third-quarter earnings of 89 cents a share on $238.2 million in revenue. Earnings came in 3 cents higher than analysts surveyed by Yahoo! Finance had expected though revenue, a 29% increase on a year earlier, missed estimates by $1.5 million. Investment banking firm Jefferies (JEF) acted as the sole financial adviser for the transaction. --Written by Keris Alison Lahiff.
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