Merus Labs International Inc. announces the closing of its previously announced bought deal financing of subscription receipts with a syndicate of investment dealers. The company issued a total of 14,250,000 subscription receipts at a price of $1.90 per subscription receipt for gross proceeds of $27,075,000.
The proceeds of the subscription receipts will, together with an advance under the company’s amended and restated credit facility announced on February 1, 2016, be used to fund the acquisition from Sanofi S.A. of the rights to the Surgestone®, Provames®, Speciafoldine®, and Tredemine® pharmaceutical products in France for a purchase price of €22.5 million. Each subscription receipt will convert into one special warrant of the company upon release of the proceeds from escrow, with each special warrant being convertible into one common share of the company.
The company will use its best efforts to file a prospectus supplement further to its base shelf prospectus dated October 30, 2015 in order to qualify the issuance of the underlying shares upon conversion of the special warrants in Canada. The prospectus supplement will be filed following the filing of a business acquisition report by the company in connection with the acquisition of products from UCB Pharma on February 4, 2016. The special warrants will automatically convert into common shares upon the earlier of (i) the third business day following the filing of the prospectus supplement, and (ii) the date that is four months and one day from the date of the closing of the offering.
The subscription receipts have been issued pursuant to private placement exemptions in applicable provinces of Canada. All securities issued will be subject to a statutory four-month hold period from the date of closing of the offering in accordance with Canadian securities legislation, subject to the prospectus qualification referred to above. Neither the subscription receipts, the special warrants, nor the underlying shares have been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons absent U.S. registration or an applicable exemption from the U.S. registration requirements.
This news release does not constitute an offer to sell or the solicitation of an offer to buy any securities.