Mallinckrodt to Acquire Questcor in $5.6 Billion Deal

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Mallinckrodt to Acquire Questcor in $5.6 Billion Deal

Mallinckrodt Plc has agreed to acquire Questcor Pharmaceuticals Inc in a deal valued at $5.6 billion.

The companies said in a statement today that Mallinckrodt, which has its headquarters in Dublin despite being run from Hazelwood, Missouri, will buy Questcor in a transaction involving cash and stock valued at $86.08 for every share. The Anaheim, California-based firm is being bought at price that’s 27% higher than its closing rates on April 4.

The latest development adds the specialty drugs business to the list of US firms that have moved to Ireland to take advantage of lower tax regimes, according to Bloomberg.

Chief financial officer of Mallinckrodt said in a conference call today that the tax rate on the newly acquired specialty drugs venture will fall by about 10%.

Chief executive officer of Mallinckrodt Mark Trudeau has embraced a strategy of injecting capital into the specialty pharmaceuticals venture while laying less emphasis on medical imaging.

In February, Questcor’s stocks lost 23% within three days after a report cast doubts on the quality of H.P. Acthar Gel, an autoimmune drug the company makes.

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Mallinckrodt in February said it was buying Cadence Pharmaceuticals Inc for $1.3 billion as it strives to enter the top 25% makers of specialty therapies.

“We are now well on our way to becoming a leader in the development and commercialization of specialty therapeutics around the world,” Trudeau said today in a statement.

Once the deal is sealed, investors in Mallinckrodt will control about 50.5% and former owners of Questcor will hold about 49.5% interest in the new outfit’s stock, USA Today reports. Boards of the two companies gave the deal the seal of approval.

The new combined venture will be headed by the current CEO and president of Mallinckrodt. Mallinckrodt’s board will add three more seats to bring its total membership to 12.

Questcor stocks surged 20% as of 10:15 am in New York.

To contact the reporter of the story: Yashu Gola at yashu@forexminute.com