Acacia Research Corporation, a publicly-traded investor in absolute return assets, has entered into an agreement with Link Fund Solutions Limited (LFS) to purchase shares in up to 19 public and private life sciences companies from LF Equity Income Fund (the “Fund”) for a total consideration of up to GBP223.9 million. The acquisition of the private companies is subject to the waiver or completion of customary pre-emption processes of such companies.
Clifford Press, Chief Executive Officer, says: “This transaction is representative of the exceptional capabilities of Acacia’s transactional team with the financial and structuring support of our strategic partnership with Starboard Value LP. Despite pandemic conditions in the USA and UK, this transaction was enabled by the resources that Acacia brought to bear, including experience in complex financial structures; and highlights the flexibility and agility of our investment team – all supported by our ready access to capital.”
Al Tobia, President and Chief Investment Officer, adds: “This is a unique transaction, entered into during a period of unparalleled market turmoil and dislocated equity markets. We previously communicated our interest in life sciences assets and have been actively researching opportunities to invest in this sector. Our acquisition of the life sciences portfolio from the Fund is a product of those research activities.”
Tobia says: “We appreciate the financial and transactional support that we have received from Starboard Value throughout this process. This is an exciting step in transforming Acacia into a leading absolute return-focused platform for investing in intellectual property, technology, and other unique investment and acquisition opportunities. Acacia’s strategic committee continues to identify and research new opportunities in operating companies in parallel with this transaction. Following this transaction, we will continue to have substantial access to capital and financial flexibility to complete further acquisitions of size.
“The transaction will be financed with USD35 million in cash currently in escrow; the issuance of USD115 million in new Starboard Notes; and cash on hand. Given the unique nature of this transaction, we have amended our agreement with Starboard to allow the Company to reduce its dividend and interest expense to the extent that the full proceeds of the financing are not needed in the near term, while maintaining the ability to deploy the full USD400 million in Starboard capital into new investments.”
