Updated on 18 September 2015
Tokyo: A subsidiary of Sun Pharmaceutical Industries Ltd. has vested a merger agreement with California-based InSite Vision Inc. The agreement defines that an indirect wholly-owned subsidiary of Sun Pharma will acquire InSite in an all-cash transaction for $0.35 per share, or approximately $48 million in aggregate equity value, on a fully diluted basis.
The transaction has been approved by the boards of directors of both InSite and the Sun Pharma subsidiary, and will be completed by means of a tender offer.
InSite also announced that it has terminated its previously announced second amended and restated merger agreement with QLT Inc. Following discussion with both Sun Pharma and QLT, and in consultation with its outside legal and financial advisors, the InSite Board of Directors determined that the Sun Pharma transaction represented a Company Superior Proposal under the QLT merger agreement. In connection with InSite's termination of the QLT merger agreement, InSite was required to pay a $2,667,000termination fee to QLT. The Sun Pharma subsidiary has paid this fee to QLT on InSite's behalf.
Under the merger agreement, InSite and the Sun Pharma subsidiary have entered into a secured loan transaction pursuant to which InSite borrowed funds sufficient to repay the amounts outstanding under InSite's secured note in favor of QLT. The loan also provides InSite with the ability to make monthly borrowings to fund its operations until closing.
"The merger agreement with Sun Pharma provides a significant improvement in value for our stockholders," said Timothy Ruane, InSite Vision's Chief Executive Officer. "We are excited about the opportunity to be part of Sun Pharma."
Under the terms of the merger agreement, an indirect wholly owned subsidiary of Sun Pharma will commence a tender offer for all outstanding shares of InSite at $0.35 per share in cash. The completion of the tender offer will be conditioned on InSite's stockholders tendering at least a majority of InSite's outstanding shares, determined on a fully diluted basis, and other customary closing conditions. Following completion of the tender offer, both companies will complete a merger in which InSite shares that were not tendered in the tender offer will be cancelled and converted into the right to receive $0.35 per share.