Danish pharmaceutical company Novo Nordisk has made a bold move by announcing the acquisition of global contract development and manufacturing company Catalent for a staggering $16.5 billion. This acquisition includes three Catalent fill-finish sites in Italy, Belgium, and Indiana, U.S., which Novo Nordisk will acquire from its controlling shareholder, Novo Holdings, after the merger closes for an upfront payment of $11 billion. Shares of Catalent surged in pre-market trading following the news, signaling investor enthusiasm for the acquisition.
The purchase price of $63.50 per share represents a 16.5% premium to the closing price of Catalent’s common stock as of February 2, 2024. Despite the excitement surrounding this acquisition, Novo Nordisk is expecting a “low single-digit negative impact” on its growth in operating profit for FY24 and FY25. However, the company’s management expressed excitement about partnering with Catalent, stating that the acquisition aligns with its life sciences investment strategy. The acquisition is anticipated to close by the end of this year, further solidifying the Danish company’s position in the pharmaceutical industry.
However, some analysts remain cautious about the investment potential of Catalent, as the company’s stock has dropped by more than 15% over the past year. This has led to a Hold consensus rating based on two Buys, four Holds, and one Sell. The average price target of $47.57 implies a downside potential of 20.4% from the current levels if the acquisition doesn’t close, indicating a level of uncertainty in the market regarding the deal’s ultimate impact.
