Salick Health Care Completes Merger with Zeneca Group PLC

Strategic Insights -

Salick Health Care, a leading provider of diagnosis and treatment for patients with catastrophic illnesses, has finalized its merger with Zeneca Group PLC, a British bioscience and pharmaceutical company. The merger was approved by Salick's stockholders at its annual meeting, and the transaction was consummated immediately after. As a result, existing Salick shareholders will receive $18.875 in cash, one-half share of callable puttable common stock, and a distribution of $0.625 per share.

Key Takeaways:

  • The merger is a result of Salick's agreement with Zeneca Group PLC, where 50% of Salick's common stock will be sold to Zeneca for cash and other considerations.
  • Each share of Salick common stock will be converted into the right to receive $18.875 in cash, one-half share of callable puttable common stock, and a distribution of $0.625 per share.
  • The callable puttable common stock, trading under the symbol "SHCID," carries a put option for shareholders to sell the stock to Salick at $42 per share 2.5 years after closing and a call option for Salick to buy the stock at market price, subject to a floor and ceiling price.
  • Assuming the callable puttable common stock is called or put in its entirety 2.5 years from closing, the total consideration paid to Salick stockholders in cash will be between $440 million and $480 million.
  • The Salick Board of Directors has been increased to 10 members, including five new members nominated by Zeneca.
  • Salick's current management team will remain in place, and the company's operations, including its Comprehensive Cancer Centers and outpatient dialysis centers, will continue.

Statistics:

  • The merger consideration per share is $18.875 in cash, one-half share of callable puttable common stock, and a distribution of $0.625 per share.
  • The total consideration paid to Salick stockholders in cash, assuming the callable puttable common stock is called or put in its entirety 2.5 years from closing, will be between $440 million and $480 million.
  • Salick operates 10 Comprehensive Cancer Centers across the US and nine outpatient dialysis centers in Southern California.
  • The company provides inpatient dialysis services at 21 hospitals and offers infusion, nutritional, and related services through its INFUSX subsidiary.

Sources:

  • Press Release, Salick Health Care, Inc., April 13, 1995
  • Salick Health Care, Inc., website (date of access not specified)