Clydesdale refinances IS Pharma

IS Pharma, which is planning to merge with Surrey-based Sinclair Pharma, has agreed a £16m credit facility with the Clydesdale Bank.

The Chester-based company said the facility will support the enlarged group’s acquisition growth strategy as well as refinancing IS Pharma’s existing bank borrowings of £4.5m.

Clydesdale is offering a £15m revolving term loan and a £1m revolving credit facility if the merger completes, as expected, on May 20.

AIM-listed IS Pharma, which develops and markets hospital medicines, said last week it had agreed to merge with Sinclair to create Sinclair IS Pharma, a group headquartered in Surrey with a focus on drugs for oncology, critical care and wound care.

Under the terms of the deal IS Pharma shareholders will receive 2.68 new Sinclair shares for each of theirs. Sinclair said this valued IS shares at 99.1p. Sinclair has a market value of £90m, twice the size of IS. The new group will have a value of £134m.

Chief executive Matthew Hall said: “We are clear about the financial synergies brought about by the merger and the strategy for Sinclair IS Pharma to acquire and licence late-stage products. We are very pleased to announce this new facility with Clydesdale Bank and, in particular, to be working with the Clydesdale team who have quickly built a strong understanding of our business and strategic goals. 

“IS Pharma continues to evaluate a number of exciting opportunities with Sinclair. The appropriate use of debt is seen by both boards as an important driver for enhancing shareholder return.”
 
The deal was handled by Clydesdale’s London-based director of corporate and structured finance Stuart Trussler.