Ligand Pharmaceuticals today announced a definitive merger agreement with Avista Public Acquisition II for the spin-off of OmniAb, Ligand’s antibody discovery business, which will merge with a newly formed subsidiary of APAC.
If approved, upon closing the SPAC’s sponsor Avista Capital Partners and a private equity firm focused on the healthcare industry have agreed to invest up to $115 million in the combined company, and Ligand will contribute $15 million.
The combined company will have an initial pre-money equity valuation of $850 million. Prior to the transaction close, Ligand intends to distribute 100% of its ownership of OmniAb to Ligand shareholders in a tax-free distribution.
The transaction is expected to close in the second half of 2022.
Ligand’s OmniAb antibody discovery platform provides pharmaceutical industry partners with access to diverse antibody repertoires and high-throughput screening technologies to enable discovery of next-generation therapeutics.
The combination of OmniAb and AHPA is structured to guarantee a minimum of $130 million in gross cash to the combined company at the time of closing, and up to $266 million in the event of no redemptions by APAC shareholders. APAC’s shareholders will be eligible to participate in the transaction or to elect redemption of their shares. Avista has agreed to guarantee that Avista and AHPA will provide at least $115 million of gross cash to the combined company through a $15 million PIPE investment and a $100 million facility to backstop potential redemptions. Ligand’s $15 million contribution to OmniAb will be made irrespective of the number of redemptions or the Avista contributions.
The transaction will be effected through a “Reverse Morris Trust” transaction under which OmniAb will be spun-off to Ligand’s shareholders and simultaneously merged as a subsidiary of APAC, according to the news release. The transaction is expected to be tax-free to Ligand and its shareholders for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. Upon closing, Ligand shareholders are expected to own approximately 75% to 84% of the combined company, depending on redemptions.
The merged company would list on the Nasdaq under the ticker symbol OABI. Read more.
