Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 11, 2022, Innoviva, Inc., a Delaware corporation ("Innoviva"), completed
its acquisition of Entasis Therapeutics Holdings Inc., a Delaware corporation
("Entasis"), pursuant to that certain Agreement and Plan of Merger, dated as of
May 23, 2022 (as amended, restated, supplemented or otherwise modified from time
to time, the "Merger Agreement"), by and among Innoviva, Entasis, and Innoviva
Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Innoviva
("Purchaser"). Pursuant to the Merger Agreement, Purchaser conducted a tender
offer (the "Offer") for all of the issued and outstanding shares of Entasis'
common stock, par value $0.001 per share (the "Shares"), other than any
Innoviva-Owned Shares and Entasis-Owned Shares (each as defined below), at a
purchase price of $2.20 per Share in cash (the "Offer Price"), without interest
and subject to any applicable withholding taxes (the "Merger Consideration"), on
the terms and conditions set forth in the Merger Agreement.
The Offer expired at 5:00 P.M., New York City time, on July 7, 2022 as scheduled
and was not extended. According to Computershare Trust Company, N.A., the
depositary for the Offer, 11,671,662 Shares were validly tendered and not
withdrawn pursuant to the Offer, which Shares, upon excluding the 56,072 Shares
tendered by Manoussos Perros (the "Entasis CEO"), represented approximately
60.45% of the outstanding Shares not beneficially owned by Purchaser, Parent or
the Entasis CEO, satisfying the minimum tender condition to the Offer. Each
other condition to the Offer was satisfied or waived, and Purchaser irrevocably
accepted for payment all Shares that were validly tendered and not validly
withdrawn. On July 8, 2022, Innoviva issued a press release announcing the
expiration and results of the Offer, a copy of which is attached as Exhibit
(a)(5)(F) to Amendment No. 2 to the Schedule TO filed by Innoviva with the
Securities and Exchange Commission (the "SEC") on July 8, 2022 and is filed as
Exhibit 99.1 hereto and incorporated herein by reference.
On July 11, 2022, following consummation of the Offer, Purchaser merged with and
into Entasis (the "Merger"), with Entasis surviving as a wholly-owned subsidiary
of Innoviva. The Merger was completed pursuant to Section 251(h) of the General
Corporation Law of the State of Delaware (the "DGCL"), with no vote of the
Entasis stockholders required to consummate the Merger. At the effective time of
the Merger (the "Effective Time"), each issued and outstanding Share (other than
(i) Shares owned at the commencement of the Offer and immediately prior to the
Effective Time by Innoviva, Purchaser or any other direct or indirect
wholly-owned subsidiary of Innoviva (the "Innoviva-Owned Shares"), (ii) Shares
owned immediately prior to the Effective Time by Entasis (or held in Entasis'
treasury) (the "Entasis-Owned Shares") and (iii) Shares held by stockholders who
are entitled to, and who have properly exercised and perfected their respective
demands for, appraisal of such Shares in the time and manner provided in Section
262 of the DGCL and, as of the Effective Time, have neither effectively
withdrawn their respective demand nor otherwise lost their respective rights to
appraisal pursuant to Section 262 of the DGCL), was converted into the right to
receive an amount in cash equal to the Merger Consideration, without interest
and subject to any applicable withholding of taxes.
The aggregate consideration paid by Innoviva in the Offer and Merger to purchase
all outstanding Shares (other than the Shares held by Innoviva or Purchaser or
by stockholders of Entasis who have properly exercised and perfected their
demands for appraisal under the DGCL), was approximately $42,395,047.20.
Innoviva provided Purchaser with the funds necessary to complete the Offer and
the Merger and to pay related transaction fees and expenses at the closing of
the Merger.
As a result of the Merger, (i) each option to purchase Shares (an "Entasis
Option") with an exercise price that was less than the Offer Price that was
outstanding immediately prior to the Effective Time was terminated and cancelled
immediately prior to the Effective Time and converted into the right to receive
a lump sum cash payment equal in amount to (a) the number of Shares underlying
such Entasis Option as of immediately prior to the Effective Time, multiplied by
(b) an amount equal to (x) the Merger Consideration, minus (y) the exercise
price of such Entasis Option, net of any taxes withheld pursuant to the Merger
Agreement; (ii) each Entasis Option with an exercise price greater than or equal
to the Offer Price that was outstanding immediately prior to the Effective Time
was terminated and cancelled immediately prior to the Effective Time in exchange
for no consideration? (iii) each restricted stock unit with respect to the
Shares (an "Entasis RSU") that was outstanding (other than Entasis RSUs held by
directors that vested due to the effects of the Merger, which were converted
into the right to receive the Merger Consideration) was terminated and cancelled
immediately prior to the Effective Time and converted into the right to receive
a number of restricted stock units under Innoviva's 2012 Equity Incentive Plan
(rounded up to the nearest whole share) equal to (x) the number of Shares
subject to such Entasis RSU immediately prior to the Effective Time, multiplied
by (y) the Merger Consideration, divided by (z) the volume weighted average
price for a share of common stock of Innoviva on the Nasdaq Global Select Market
for the ten Business Days prior to the Closing Date as displayed on Bloomberg
(the "10-day Parent Stock VWAP") with terms and conditions that are similar to
the Entasis RSUs for which they were exchanged, except for certain changes to
the vesting schedule and conditions and changes to such terms and conditions as
do not adversely impact the rights of the holder thereof? and (iv) each third
party warrant to purchase Shares that was issued and outstanding immediately
prior to the Effective Time was replaced by a replacement warrant issued by
Innoviva at the Effective Time (each, a "Replacement Warrant").
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The foregoing description of the Merger Agreement (including the description of
the consideration payable in connection with the Merger) is not complete and is
qualified in its entirety by reference to the Merger Agreement, a copy of which
was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by Innoviva
with the SEC on May 23, 2022, and is incorporated herein by reference.
Item 8.01. Other Events.
On July 11, 2022, Innoviva issued a press release announcing the completion of
the Merger. A copy of the press release is attached hereto as Exhibit 99.2 and
is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
EXHIBIT
NO. DESCRIPTION
2.1 Agreement and Plan of Merger, dated as of May 23, 2022, by and among
Innoviva, Inc., Innoviva Merger Sub, Inc., and Entasis Therapeutics
Holdings Inc.† (incorporated herein by reference to Exhibit 2.1 to
Innoviva's Current Report filed on May 23, 2022)
99.1 Press Release, dated July 8, 2022, issued by Innoviva, Inc. announcing
the expiration and results of the Offer (incorporated herein by
reference to Exhibit (a)(5)(F) to Innoviva's Amendment No. 2 to the
Schedule TO filed on July 8, 2022)
99.2 Press Release, dated July 11, 2022, issued by Innoviva, Inc. announcing
the completion of the acquisition of Entasis Therapeutics Holdings Inc.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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† Schedules and exhibits omitted pursuant to item 601(b)(2) of
Regulation S-K. Innoviva agrees to furnish supplementally a copy of any
omitted schedule or exhibit to the Securities and Exchange Commission upon its
request.
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