Vectura to be taken over by Carlyle in £958m deal

Pharmaceutical company Vectura said on Wednesday that it has agreed to be taken over by US private equity firm The Carlyle Group in a £958m deal, sending the shares sharply higher.

Under the terms of the deal, Carlyle will pay 136p in cash for each Vectura share and a 19p cash dividend. The price represents a premium of around 27% to the closing Vectura share price on Tuesday.

Chairman Bruno Angelici said: "Vectura has made strong progress since embarking on its new strategy in 2019 to become a leading inhalation focused CDMO (contract and development manufacturing organisation), whilst continuing to deliver strong financial and operational results in its royalties and product supply businesses.

"While the Vectura directors remain confident in the long term fundamentals of the Vectura Group, we believe that this is an attractive offer for Vectura shareholders, which secures the delivery of future value for Vectura Shareholders in cash today. The offer reflects the quality, strength and long term performance of Vectura's businesses and its future growth potential."

News of the deal came alongside a trading update in which Vectura, which specialises in inhaled treatments, said revenues for the CDMO business in 2021 are expected to remain in line with previous guidance of more than tripling versus 2020.

Meanwhile, revenues from its product supply segment were set to be marginally below its guidance due to overall market weakness.

"As a result of the ongoing impact of Covid-19, market weakness seen in the ICS/LABA market in the second half of 2020 has continued into this year, with Q1 2021 market volumes similar to Q3 and Q4 2020," the company said.

"Whilst flutiform continues to broadly maintain its market share, the overall market weakness is likely to result in revenues being marginally below our guided range of £75m-£80m, as our partners adjust their in-market stock levels accordingly . Gross profit remains in line with our previous guidance, driven by an improved margin expectation."

At 1540 BST, Vectura shares were up 33% at 162.40p.

Broker Shore Capital said: "In summary, we view this as a fair offer for the business, offering investors a near-term opportunity to crystallise value which make have taken longer to realise should the business have remained public.

"Management is delivering on its strategic transition, as first disclosed in 2019, however with the additional firepower from Carlyle and the "freedom" to invest as a private business, should offer the opportunity for the team to accelerate its investment and growth plans."