Denmark-based Novo Holdings and pharmaceutical company Catalent, headquartered in Somerset, announced Feb. 5 they entered into a merger agreement for the former company to acquire the latter in an all-cash transaction worth $16.5 billion. 

The move follows several months of Catalent‘s efforts to “right-size” its business after struggling with productivity issues and higher-than-expected costs at three of its facilities. 

“Following an evaluation of possible value-maximizing alternatives, the Catalent Board unanimously determined that the transaction with Novo Holdings, which delivers a premium and certain cash value, is in the best interest of Catalent,” according to the recent announcement. 

The merger is expected to close toward the end of 2024, subject to customary closing conditions, including approval by Catalent stockholders. At that time, Catalent will become a private company, and its shares will no longer trade on the New York Stock Exchange. 

According to the announcement, Novo Holdings will acquire all outstanding shares of Catalent for $63.50 per share in cash, with the purchase price representing a premium of 16.5% to the closing price of Catalent’s common stock as of Feb. 2, the last trading day before the announcement, and a 47.5% premium to the 60-day volume-weighted average price as of that same day.  

“Over the past several years, Catalent has built a comprehensive end-to-end offering of services and capabilities to drive innovation in the health care system and improve patient outcomes. This transaction is a testament to our team’s hard work and dedication to this mission, and I am incredibly excited for this next step in our journey,” Catalent President and CEO Alessandro Maselli said in a statement. 

Novo Holdings CEO Kasim Kutay said, “We are excited to partner with Catalent as it enters a new phase of growth and accelerates its mission to develop, manufacture and supply products that help people live better and healthier lives. With our expertise and track record of investing in high quality life sciences businesses, we believe Catalent is a very good strategic fit. We are excited to support the Company’s stakeholders in the years ahead, especially employees and customers as they work to develop new products to benefit patients.”

Additionally, Novo Holdings intends to sell Catalent’s fill-finish sites in Anagni, Italy; Bloomington, Ind.; and Brussels, Belgium. In a separate Feb. 5 announcement, Novo Nordisk – which has its U.S. headquarters in Plainsboro – said it will acquire these sites from Novo Holdings for $11 billion. Novo Holdings is the controlling shareholder of Novo Nordisk A/S. The site acquisition will allow Novo Nordisk – the maker of weight loss drug Wegovy and diabetes medication Ozempic – to expand its manufacturing capacity.

According to the companies, Catalent operates more than 50 sites globally.

Citi and J.P. Morgan are acting as financial advisors to Catalent; Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to Catalent; and Jones Day is serving as legal advisor to the Catalent board. Morgan Stanley is acting as financial advisor to Novo Holdings, and Goodwin Procter LLP is serving as its legal advisor. 

Novo Holdings is the holding and investment company of the Novo Nordisk Foundation, whose goals is “to improve people’s health and the sustainability of society and the planet by generating attractive long-term returns on the assets of the Novo Nordisk Foundation.” 

Kutay added, “Importantly, our acquisition of Catalent is aligned with our mandate to invest in high quality life sciences companies for the benefit of the Novo Nordisk Foundation’s mission and philanthropic causes.”

Editor’s note: This story was updated at 10:02 a.m. ET Feb. 6 to include plans for three of Novo Holdings’ fill-finish sites.