Miravo Healthcare™ Enters into Definitive Agreement to be Acquired by Searchlight Pharma Inc.

Rhea-AI Summary

Miravo Healthcare (TSX:MRV; OTCQX:MRVFF) has entered into an agreement with Searchlight Pharma for the acquisition of all common shares for $1.35 each, a 79.8% premium over the last 90-day average price. The deal values Miravo at approximately $15.8 million in equity and $91.4 million in enterprise value. Following the transaction, Miravo will remain Canadian-controlled. The Board unanimously recommends the Arrangement, citing benefits for shareholders, while emphasizing that court and shareholder approval are required before completion, expected in Q1 2023.

Positive

• Shareholders to receive $1.35 per share, a 79.8% premium to recent trading price.
• Transaction provides immediate value for shareholders.
• Merger expected to enhance Searchlight's product portfolio and market presence.

Negative

• Transaction dependent on court and shareholder approvals, adding uncertainty.
• Potential risks related to integration and realization of anticipated synergies.

Miravo shareholders to receive $1.35 per common share in cash, reflecting a premium of 79.8% to the 90-day volume weighted average price per common share on the Toronto Stock Exchange for the period ended December 22, 2022

Agreement entered into after a thorough review of all alternatives by the Miravo Board of Directors

Miravo to remain a Canadian controlled and operated company following closing of the transaction

MISSISSAUGA, Ontario & MONTREAL, Quebec--(BUSINESS WIRE)-- Nuvo Pharmaceuticals Inc. d/b/a Miravo Healthcare (TSX:MRV; OTCQX:MRVFF) (“Miravo” or the “Company”) and Searchlight Pharma Inc., a private Canadian-based specialty healthcare company (“Searchlight” or the “Purchaser”), are pleased to announce that they have entered into a definitive agreement (the “Arrangement Agreement”) pursuant to which the Purchaser has agreed to acquire all of the issued and outstanding common shares of the Company (the “Company Shares”) in exchange for cash consideration of $1.35 per Company Share, representing a 79.8% premium to the 90-day volume-weighted average trading price of the Company Shares on the Toronto Stock Exchange for the period ended December 22, 2022. The transaction will be completed by way of an arrangement under Section 182 of the Business Corporations Act (Ontario) (the “Arrangement”). In connection with the closing of the Arrangement, all of the indebtedness (including convertible debt) owed to funds affiliated with Deerfield Management Company, in the aggregate principal amount of approximately US$78.1 million, will be repaid in full and the Company’s outstanding warrants will be cancelled for no consideration.

The purchase price of $1.35 per Company Share represents a total equity value of the Company, on a fully diluted basis, of approximately $15.8 million and a total enterprise value of the Company of approximately $91.4 million.

“We are pleased to present an opportunity for shareholders of the Company to realize value at a significant premium to the trading price of the Company Shares,” commented Jesse Ledger, Miravo’s President & CEO. “After careful deliberation, the Company’s Board of Directors has unanimously concluded that the transaction is in the best interests of the Company and is fair to the Company’s shareholders. Not only does an all-cash transaction provide immediate and certain value to shareholders, it also allows important healthcare products like Blexten^®, Cambia^® and Suvexx^® to remain available to healthcare providers and patients through the enhanced scale of the Searchlight business.”

“This transaction presents a unique opportunity to add critical mass to Searchlight’s expanding business, and importantly, to onboard a proven team that we think shares a similar culture and set of foundational values,” said Mark Nawacki, President and CEO at Searchlight. “We are excited that Miravo will add a portfolio of growing, category-leading brands in new therapeutic areas to our commercial business and that we will expand and have team members and offices in Montreal, Toronto and Dublin. We are confident that Miravo’s depth of talent, competencies and resources, which we are acquiring through this transaction, will enhance our competitiveness and ensure a seamless transition to patients and end customers.”

Recommendation of Miravo Board of Directors

The board of directors of the Company (the “Board”), after receiving legal and financial advice, has unanimously determined that the Arrangement is in the best interests of the Company and is fair to the holders of Company Shares (the “Shareholders”). Accordingly, the Board approved the Arrangement Agreement and recommends that Shareholders vote in favour of the Arrangement at the special meeting of Shareholders to be called and held to approve the Arrangement. In making its recommendation, the Board considered a number of factors, including its receipt of an opinion from Bloom Burton Securities Inc., which concluded that, as at December 22 2022, the consideration payable to the Shareholders pursuant to the Arrangement is fair, from a financial point of view, to the Shareholders (the “Fairness Opinion”).

Additional Transaction Details

Each of the directors and executive officers of the Company who are Shareholders, as well as one of the Company’s significant Shareholders, Red Oak Partners, LLC, who collectively own or control, directly or indirectly, approximately 23.16% of the Company Shares, have entered into voting support agreements with the Purchaser to, among other things, vote their Company Shares in favour of the Arrangement.

In order to become effective, the Arrangement will require court approval and must be approved by: (i) at least two-thirds of the votes cast by Shareholders, and (ii) a simple majority of the votes cast by Shareholders, excluding for this purpose votes attached to Company Shares held by persons described in items (a) through (d) of Section 8.1(2) of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transaction.

In addition to court and shareholder approval, the Arrangement is subject to, among other things, the satisfaction or waiver of certain closing conditions customary in transactions of this nature. Subject to the satisfaction of such conditions, the Arrangement is expected to close in the first quarter of 2023.

The Arrangement Agreement includes representations, warranties and covenants typical of a transaction of this nature, along with customary provisions relating to non-solicitation, subject to customary “fiduciary out” provisions that entitle the Company to consider and accept a superior proposal if the Purchaser does not match such proposal. The Company has agreed to pay a termination fee to the Purchaser, if the Arrangement Agreement is terminated in certain circumstances, including if the Company enters into an agreement with respect to a superior proposal or if the Board withdraws its recommendation with respect to the Arrangement.

The Arrangement is to be funded in part with equity commitments from investors of the Purchaser and committed debt financing by certain Canadian lenders. The Purchaser has agreed to pay a reverse termination fee to the Company if the Arrangement Agreement is terminated in certain circumstances, including if the Purchaser materially breaches a representation or warranty or fails to materially perform a covenant, which breach is not cured, and if after all other conditions to the closing of the Arrangement have been satisfied or waived, the Purchaser is not in a position to fund the closing of the Arrangement.

The Arrangement Agreement, which describes the full particulars of the Arrangement, will be made available on SEDAR (www.sedar.com) under the issuer profile of the Company. Additional information regarding the terms of the Arrangement Agreement, the Fairness Opinion and the background of the transaction will be provided in a management information circular of the Company (the “Circular”) to be filed with applicable regulatory authorities and mailed to Shareholders in accordance with applicable securities laws. Shareholders and other interested parties are advised to read the materials relating to the Arrangement, including the Arrangement Agreement and the Circular when they become available.

Advisors

Bloom Burton Securities Inc. is acting as financial advisor to the Board and Goodmans LLP is serving as legal advisor to the Company. PricewaterhouseCoopers Corporate Finance Inc. is acting as financial advisor to Searchlight, with transaction support and tax advisory services provided by PricewaterhouseCoopers LLP, and McCarthy Tétrault LLP is serving as legal advisor to Searchlight.

About Miravo Healthcare

Miravo is a Canadian focused, healthcare company with global reach and a diversified portfolio of commercial products. The Company’s products target several therapeutic areas, including pain, allergy, neurology and dermatology. The Company’s strategy is to in-license and acquire growth-oriented, complementary products for Canadian and international markets. Miravo’s head office is located in Mississauga, Ontario, Canada, the international operations are located in Dublin, Ireland and the Company’s manufacturing facility is located in Varennes, Québec, Canada. For additional information, please visit www.miravohealthcare.com.

About Searchlight Pharma Inc.

Searchlight Pharma Inc., headquartered in Montreal, is a leading Canadian-based specialty healthcare company that executes best-in-class search, acquisition, commercialization, and focused development of innovative and unique specialty healthcare products. Our core products focus on women’s health, urogynecology, urology, endocrinology and hospital specialty markets, and our team is committed to improving people’s lives by bringing the right products to market. Follow us, learn more about what we do, and get to know our product portfolio at www.searchlightpharma.com.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain information set forth in this news release including, without limitation, Miravo’ management’s expectations with respect to: the anticipated benefits of the Arrangement and the timing thereof related to, among other things, the future availability of Miravo’s healthcare products, the expansion of Searchlight’s business, team and offices and other anticipated synergies; and the anticipated timing for closing the Arrangement, is forward-looking information within the meaning of applicable securities laws. Forward-looking information may in some cases be identified by words such as “will”, “anticipates”, “expects”, “intends” and similar expressions suggesting future events or future performance.

By its nature, forward-looking information is subject to numerous risks and uncertainties, some of which are beyond Miravo’s control. The forward-looking information contained in this news release is based on certain key expectations and assumptions made by Miravo, including expectations and assumptions concerning the anticipated benefits of the Arrangement and the receipt, in a timely manner, of shareholder and court approvals in respect of the Arrangement.

Forward-looking information is subject to various risks and uncertainties which could cause actual results and experience to differ materially from the anticipated results or expectations expressed in this news release. The key risks and uncertainties include, but are not limited to: general global economic, market and business conditions; the delay or failure to meet anticipated product launches; a delay in or disruption caused by the winding down of the Company’s manufacturing operations in Varennes, Québec; ongoing impacts of COVID-19 on the Company’s operations, business, financial results, and the industry in which it operates; the failure to meet certain milestones or collect certain royalties; diversion of management time on the Arrangement and other factors, many of which are beyond the control of the Company. There are also risks that are inherent in the nature of the Arrangement, including failure to satisfy the conditions to the completion of the Arrangement and failure to obtain any required approvals (or to do so in a timely manner). The anticipated timeline for completion of the Arrangement may change for a number of reasons, including the inability to secure necessary court or other approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the Arrangement. As a result of the foregoing, readers should not place undue reliance on the forward-looking information contained in this news release concerning the timing of the Arrangement. A comprehensive discussion of other risks that impact Miravo are included in the Company’s most recent Annual Information Form dated March 25, 2022 under the heading “Risks Factors”, and are described from time to time in the reports and disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions which are available under Miravo’s profile at www.sedar.com.

Readers are cautioned that undue reliance should not be placed on forward-looking information as actual results may vary materially from the forward-looking information. Miravo does not undertake to update, correct or revise any forward-looking information as a result of any new information, future events or otherwise, except as may be required by applicable law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20221223005107/en/

Miravo Investor Relations

905 673-6980 / option 2

ir@miravohealth.com

Searchlight Information

(514) 613-1513

info@searchlightpharma.ca

Source: Nuvo Pharmaceuticals Inc.

FAQ

What is the acquisition price for Miravo shareholders?

Miravo shareholders will receive $1.35 per common share in cash.

What premium does the acquisition represent?

The acquisition price represents a 79.8% premium over the 90-day volume weighted average price.

When is the expected closing date for the acquisition?

The transaction is expected to close in the first quarter of 2023.

What are the conditions for the deal to proceed?

The deal requires court approval and a two-thirds majority vote from shareholders.

What is the strategic importance of this acquisition for Searchlight?

The acquisition enhances Searchlight's business scale and adds a portfolio of growing healthcare brands.