Transaction Provides Timber Stockholders with Upfront Cash Consideration and Downstream Value through Contingent Value Rights
Total Transaction Value of up to $36 million
Transaction Expected to Close in the 4th Quarter of 2023, subject to closing conditions and stockholder approval
Timber Pharmaceuticals, Inc. (“Timber” or the “Company”) (NYSE American: TMBR) today announced that it has entered into a definitive agreement to be acquired by LEO US Holding, Inc. (“LEO Pharma”), a wholly-owned subsidiary of LEO Pharma A/S, in a total transaction value of up to $36 million with (i) an initial upfront consideration of $14 million and (ii) up to an additional $22.0 million in contingent value rights (CVRs) payable upon achievement of certain milestones described below. All of the issued and outstanding shares of capital stock and other equity interests of Timber will be converted into the right to receive the initial upfront consideration, less the payments for certain outstanding warrants that contain a Black Scholes cash payout value. For example, based on a current estimate of the Black Scholes value of such warrants of approximately $5.1 million, subject to change based on the assumptions detailed below, Timber expects the initial amount per share to be paid to Timber stockholders to be approximately $2.62 based on approximately 3.4 million shares of Timber common stock and restricted stock issued and outstanding as of August 20, 2023.
The current estimated value to stockholders is based on an implied value assigned to certain outstanding warrants based on Black Scholes option pricing model as of August 18, 2023. This value will not be finalized until the closing of the merger and is subject to increase or decrease based on certain variables, including the actual trading price of Timber at the time of the merger and the trading volatility of Timber common stock prior to the merger.
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