Why Indivior Pharmaceuticals Stock Topped the Market Today
Key Points
The peer is Supernus Pharmaceuticals.
The combined business will bear the Supernus name and stock ticker under the terms of a deal announced in August.
On Monday, Indivior Pharmaceuticals (NASDAQ:INDV) went out on a positive note, in a manner of speaking. That's because the first trading session of November marked its last day as a stand-alone company and stock. On news of its successful merger with a partner, investors bid it farewell, sending its shares up more than 3% that day.
Two become one
That morning, Indivior announced that its merger with peer Supernus Pharmaceuticals (NASDAQ:SUPN) had closed. This creates, in Indivior's words, "a leading diversified, central nervous system (CNS) biopharmaceutical company."
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The deal was announced in early August. Under its terms, Supernus investors were to receive just over 1.5 shares of Indivior's common stock for each Supernus share they owned. In return, Indivior investors were to be paid a collective, one-time special cash dividend of $1 billion just before the close of the merger.
At the time, the two companies estimated that Indivior's shareholders would hold around 56.5% of the combined healthcare business, which will bear the Supernus name and ticker symbol, with Supernus investors owning the remainder.
The $125 million question
Indivior and Supernus aim to reach $125 million in annual cost synergies by combining, which, to me, feels like a sensible fusion of compatible businesses, if not exactly the "merger of equals" it's hyped to be. Investors in the new, bulked-up Supernus should track how its costs evolve to see whether management is effectively working toward that goal.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.