Synergy, Bausch asset purchase agreement amended to resolve objections

By Caroline Salls

Pittsburgh, Jan. 10 – Synergy Pharmaceuticals Inc.’s court-approved asset sale procedures are based on an agreement reached with its official committee of unsecured creditors and an informal committee of equityholders that amends the asset purchase agreement with stalking horse bidder Bausch Health Cos., Inc., according to an 8-K filed Thursday with the Securities and Exchange Commission.

The company said the Jan. 4 agreement resolves objections raised by the committees to the bid procedures, which were approved on Jan. 7 by the U.S. Bankruptcy Court for the Southern District of New York.

Specifically, if the amended purchase agreement is terminated because Bausch Health and wholly owned subsidiary Bausch Health Ireland Ltd. are not deemed the winning bidder at the auction, the break-up fee will be payable upon the earlier of the closing of the sale to the winning bidder and the 30th day following the conclusion of the auction.

If purchase agreement termination events occur and Synergy closes on or enters into an agreement for an alternate sale within nine months of the resulting termination, the break-up fee will be payable upon the earlier of the closing of the alternative transaction and the 30th day following entry into a definitive agreement for that transaction.

As previously reported, the sale includes all rights to Synergy’s Trulance and dolcanatide products and related intellectual property.

Bids competing with Bausch’s $200 million stalking horse bid are due by 4 p.m. ET on Feb. 23 and must at least equal the amount of the stalking horse bid, plus a $7 million break-up fee and $1.95 million expense reimbursement to be paid to Bausch if it is not the high bidder and a $2 million minimum overbid amount.

An auction will be held on Feb. 26, if necessary. Bids at auction must be made in minimum increments of $1 million.

The sale hearing is scheduled for March 1.

Synergy is a New York-based biopharmaceutical company focused on the development and commercialization of novel gastrointestinal therapies. The company filed bankruptcy on Dec. 12 under Chapter 11 case number 18-14010.

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