Elanco Animal Health Incorporated (NYSE:ELAN) entered into an agreement to acquire Kindred Biosciences, Inc. (NasdaqCM:KIN) for approximately $420 million on June 15, 2021. Under the terms of the agreement, Elanco will acquire all outstanding stock of Kindred at a price of $9.25 per share in cash. Elanco intends to fund the acquisition with pre-payable debt, revolving credit facility and available cash as necessary. KindredBio may be required to pay Elanco a termination fee of $15.496 million in the event the transaction is terminated. On completion, Kindred will operate as a wholly owned subsidiary of Elanco.

The completion is subject to the satisfaction or waiver of certain conditions, including approval from shareholders of Kindred, the absence of any law or order in the United States or the European Union prohibiting the Merger and the expiration or earlier termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and customary closing conditions. The transaction has been approved by the Board of Kindred and Elanco. The HSR Waiting Period expired on July 30, 2021. KindredBio's board of directors recommends that shareholders vote “FOR” the adoption of the merger agreement. As of August 25, 2021, the transaction has been approved by the stockholders of Kindred Biosciences at its special meeting of shareholders. The transaction is expected to close in the third quarter of 2021. As on August 2, 2021 the merger is expected to close in late third quarter of 2021. As on August 9, 2021 the transaction is expected to close in August 2021. The transaction and operating costs are slightly dilutive to Elanco's reported and adjusted earnings per share in 2021 and 2022. The revenue is expected to be accretive and is expected to unlock upside to Elanco's long-term growth algorithm.

Goldman Sachs & Co. LLC acted as the financial advisor and Catherine Dargan and Michael Riella of Covington & Burling LLP acted as the legal advisor to Elanco. Barclays Capital Inc. acted as the financial and fairness opinion provider, while Michael O'Bryan of Morrison & Foerster LLP acted as the legal advisor to KindredBio. Barclays Capital Inc. will receive a fee of $6.8 million for its services, of which $1 million will be paid on the delivery of its fairness opinion. MacKenzie Partners, Inc. acted as the information agent for Kindred.