Jazz Pharmaceuticals plc (NASDAQ: JAZZ) is back with a new acquisition. The Ireland-based pharmaceutical company has announced the purchase of GW Pharmaceuticals plc (OTC: GWPRF) for $7.2 billion, or $220 per American Depositary Share in the form of $200 in cash and $20 in Jazz Pharmaceuticals ordinary shares. The price represents a premium of approximately 50% over GW’s closing stock price on February 2, 2021, of $146.25 and 60% over GW’s 30-day volume-weighted average price of $137.17.
GW Pharmaceuticals is a global pharmaceutical company that discovers, develops, manufactures and commercializes novel, regulatory approved therapeutics from its proprietary cannabinoid product platform to address a broad range of diseases. The company markets a multiple sclerosis treatment (nabisimols), which was the first natural cannabis plant derivative to gain market approval in any country. The company generated annualized revenues of approximately $549.2 million in 2020, but a $10.69 million loss in annualized EBITDA.
Post-closing, the combined company will be a leader in neuroscience with a global commercial and operational footprint. The merger is expected to provide accelerated double-digit top-line revenue growth and to be accretive in the first full year of combined operations and substantially accretive thereafter.
Jazz Pharmaceuticals is a relaltively quiet buyer in the M&A market, according to search results in our Healthcare Deals Database. In 2020, it reported one deal, buying a FAAH Inhibitor Program from SpringWorks Therapeutics, Inc. (NASDAQ: SWTX) for a modest $35 million. In 2019, the company was a little busier, announcing three acquisitions. Two were licensing deals, but one was a takeover of Cavion, Inc., a clinical-stage biotechnology company focused on therapies aimed at chronic and rare neurological diseases, for $52.5 million.
This deal, by a wide margin, is the company’s largest transaction in history (the highest until this was a $1.5 billion acquisition in 2016 for Celator Pharmaceuticals Inc.). We’ll see if Jazz Pharmaceauticals can keep up with bigger mergers to remain competitive.