GW Pharma bought by Jazz for $7,2 billion

An agreement was announced today for the purchase of the pharmaceutical GW Pharmaceuticals from Jazz Pharmaceuticals. The total value of the transaction amounts to US$7,2 billion, of which US$6,7 billion corresponds to the sum that will enter GW's coffers in cash.

The transaction, which has already been unanimously approved by the Boards of Directors of both companies, is expected to close in the second quarter of 2021.

The historic and pioneering pharmaceutical company developing cannabis-based drugs and owner of the approved drugs Sativex and Epidiolex, GW Pharmaceuticals, has just been acquired, according to a deal posted today on its website. The purchasing company is Jazz Pharma, established in 2003 and also traded on the Nasdaq. The purchase of GW results in a global biopharmaceutical leader.

Bruce Cozadd, Chairman and CEO of Jazz Pharmaceuticals

Upon completion of the transaction, which requires approval from GW Pharma shareholders as well as various regulatory bodies, the combined company will be a leader in neuroscience, with a strong global commercial and operational presence well-positioned in the medical cannabis sector, thereby diversifying your portfolio.

Bruce Cozadd, President and CEO of Jazz Pharmaceuticals said he was “bringing together two teams that share a passion for developing differentiated therapies that advance science and transform patients' lives. This will help facilitate successful integration and add resources to Jazz. Given the strength of our balance sheet and the significant financial drivers of this transaction, we are confident in the value we can deliver to the companies' shareholders and patients. We look forward to welcoming the GW team to Jazz to build an even stronger company,” concluded Cozadd.

Justin Gover, CEO of GW Pharmaceuticals

GW Pharmaceuticals CEO Justin Gover says in retrospect that GW has built an unparalleled global leadership position in the science of cannabinoids, including the successful launch of Epidiolex, an innovative product in the field of epilepsy and a line of diverse and robust neuroscience research. The CEO of GW further states that he believes that “Jazz is an ideal growth partner that is committed to supporting our commercial efforts as well as clinical and research programs that are already underway.”

The statement also assumes that the transaction is based on four pillars:

• Creating an Innovative, High-Growing Global Biopharmaceutical Leader with Financial Strength;
• Robust physique pipeline combined in neuroscience and oncology to drive sustainable growth;
• Shared culture and exceptional talent, which will further the mission to transform the lives of patients;
• Hope to provide substantial shareholder value;

Transaction Terms

Pursuant to the terms of the agreement, holders of American Depositary Share Receipts (ADS) of GW, which are securities equivalent to the common shares of foreign companies listed on the American stock exchange (in the case of this company, each ADS represents 12 common shares of GW Pharmaceuticals ). ADS holders will be entitled to receive US$220 for each ADS of which US$200 will be paid in cash and US$20 in Jazz common stock. This represents a premium of approximately 50 percent of the closing price of GW's shares on February 2, 2021, of US$146,25, and 60 percent of the weighted average price of the last 30 days of the company, with a value of 137,17 dollars.

The number of Jazz common shares to be issued to holders of GW ADSs will be based on the volume weighted average price of Jazz common shares during the 15 trading day period prior to the closing date of the transaction. The number of shares is subject to limitations on the maximum and minimum number of Jazz common shares that may be issued per GW ADS, based on a price range of $139,72 to $170,76 per Jazz common share. 

Holders of GW common shares that are not in ADS format will also be entitled to receive consideration for their shares, however, the value to be attributed per common share is one-twelfth of the value for each ADS.

The transaction consideration money will be financed using a combination of cash and debt financing. Jazz Pharmaceuticals obtained debt financing secured in full by BofA Securities and JP Morgan Securities LLC. The financing includes a significant portion of the prepayable debt, in line with Jazz's commitment to fast leverage.

GW is one of the leading companies in the research, development, manufacture and commercialization of new therapies approved by regulators, especially Sativex and Epidiolex. Additionally, GW has a scientific platform and a deep innovative lineup of cannabinoid product candidates, as well as highly specialized manufacturing experience, developed over two decades of pioneering and building leadership in cannabinoid science. 

Jazz has a leading position in sleep medication and the fast growing oncology business. The company says it is also excited to add the industry-leading cannabinoid platform to its portfolio, pipeline and innovative products that will strengthen and drive sustainable long-term value creation opportunities.