Announcement • Sep 13
Dianthus Therapeutics, Inc. completed the acquisition of Magenta Therapeutics, Inc. (NasdaqGM:MGTA) from a group of shareholders in a reverse merger transaction.
Dianthus Therapeutics, Inc. signed a term sheet to acquire Magenta Therapeutics, Inc. (NasdaqGM:MGTA) from a group of shareholders in a reverse merger transaction on March 24, 2023. Dianthus Therapeutics, Inc. entered into a definitive merger agreement to acquire Magenta Therapeutics, Inc. for approximately $170 million in a reverse merger transaction on May 2, 2023. As reported, 223,995,090 shares of Magenta common stock will be issued to Dianthus shareholders as consideration upon closing of the merger. As of July 31, 2023, the exchange ratio is currently estimated to be equal to approximately 3.64x shares of Magenta common stock for each share of Dianthus capital stock. Upon completion of the merger, the combined company is expected to operate under the name Dianthus Therapeutics, Inc. and trade on the Nasdaq under the ticker symbol “DNTH”. In support of the merger, Dianthus has secured commitments for a $70 million private investment in its common stock and pre-funded warrants from a syndicate of healthcare investors led by Fidelity Management & Research Company, Catalio Capital Management, 5AM Ventures, Avidity Partners, Wedbush Healthcare Partners and founding investors Fairmount, Tellus BioVentures and Venrock Healthcare Capital Partners, that is expected to close immediately prior to completion of the merger. With the cash expected from both companies at closing and the proceeds of the concurrent private financing, the combined company is expected to have approximately $180 million of cash or cash equivalents immediately post-closing. The cash resources are intended to be used to advance Dianthus’ pipeline through multiple clinical data catalysts and is expected to fund operations into mid-2026. Pre-merger Dianthus stockholders (including Dianthus stockholders issued shares of Dianthus common stock and pre-funded warrants in the concurrent private financing) are expected to own approximately 77.6% of the combined company and pre-merger Magenta stockholders are expected to own approximately 22.4% of the combined company. The percentage of the combined company that Magenta’s stockholders will own as of the close of the transaction is subject to adjustment based on the amount of Magenta’s net cash at the closing date. Immediately prior to the closing of the proposed merger, Magenta stockholders will be issued contingent value rights representing the right to receive certain payments from proceeds received by the combined company, if any, related to pre-transaction legacy assets.. Upon termination of the merger agreement under specified circumstances, Magenta may be required to pay Dianthus a termination fee of $13.3 million and/or reimburse Dianthus’ expenses up to a maximum of $1.5 million, and Dianthus may be required to pay Magenta a termination fee of $13.3 million and/or reimburse Magenta’s expenses up to a maximum of $1.5 million.Following the merger, the combined company will be led by Marino Garcia, the current Chief Executive Officer and President of Dianthus Therapeutics, and the current members of the Dianthus management team. The merger agreement provides that the Board of Directors of the combined company will be composed of eight board members, including all six current Dianthus board members and two from Magenta. The executive management team of the combined company is expected to consist of members of the Dianthus executive management team prior to the merger, including Ryan Savitz, Chief Financial Officer; Simrat Randhawa, Chief Medical Officer; Adam Veness, Senior Vice President, General Counsel and Secretary and Edward Carr, Chief Accounting Officer. The completion of the merger is subject to the registration statement on Form S-4 must have been declared effective by the SEC; Dianthus and Magenta stockholder approval; the approval of the listing of the additional shares of Magenta common stock on Nasdaq will have been obtained and the lock-up agreements executed by certain stockholders of Dianthus and Magenta will continue to be in full force and effect and other closing conditions. The transaction has been unanimously approved by the Board of Directors of each company. As on August 2, 2023, transfer of securities listing from The Nasdaq Global Market to The Nasdaq Capital Market was approved. Magenta board formed a transaction committee of the Magenta board of directors to review the merger. A virtual special meeting in lieu of annual meeting of stockholders will be held on September 8, 2023 at 8:00 a.m. Eastern Time, unless postponed or adjourned to a later date. The Magenta special meeting will be held entirely online. As on July 31, 2023, the U.S. Securities and Exchange Commission declared S-4/Proxy statement as effective. As on September 8, 2023, the shareholders of Magenta approved various merger proposals comprising (i) issuance of more than 20% of the shares of Magenta common stock outstanding immediately prior to the merger, to stockholders of Dianthus, (ii) reverse stock split of Magenta’s issued and outstanding common stock at a ratio in the range between 1:10 to 1:18, (iii) The Company’s stockholders elected Jeffrey W. Albers, Anne McGeorge and David T. Scadden as agenta’s board of directors, to serve until Magenta’s 2026 annual meeting of stockholders, (iv) To ratify the selection of KPMG LLP as Magenta’s independent registered public accounting firm for the fiscal year ending December 31, 2023, provided that Deloitte & Touche LLP is expected to be appointed for that fiscal year if the merger is completed. The merger is expected to close on September 11, 2023.Wedbush PacGrow is serving as lead financial advisor, Houlihan Lokey Financial Advisors is serving as co-financial adviser and William D. Collins, Michael R. Patrone, Marianne C. Sarrazin, Andrew H. Goodman, Sarah M. Bock, Brian H. Mukherjee, Tim Worden, Alexander Varond, Edward Holzwanger, Caroline H. Bullerjahn, Jacqueline Klosek and Daniel S. Karelitz of Goodwin Procter LLP is serving as legal counsels to Magenta Therapeutics. Jefferies, Evercore ISI, Guggenheim Securities and Raymond James are serving as the placement agents to Dianthus Therapeutics, and Branden C. Berns and Ryan A. Murr of Gibson, Dunn & Crutcher LLP is serving as legal counsels to Dianthus Therapeutics. Evercore Group L.L.C. acted as financial advisor to Dianthus Therapeutics, Inc. Houlihan Lokey acted as fairness opinion provider to Magenta Board. Wedbush and Goodwin Procter LLP acted as due diligence providers to Magenta. Computershare Trust Company, N.A. acted as transfer agent to Magenta. Magenta has retained Innisfree M&A Incorporated to assist in solicitation of proxies for a fee of $50,000, plus reimbursement of out-of-pocket expenses. Houlihan Lokey became entitled to an aggregate fee of $400,000 for its services, a portion of which became payable to Houlihan Lokey upon its retention by Magenta and a substantial portion of which became payable upon the delivery of its opinion. Magenta agreed to pay Wedbush a success fee of 1.0 % of the transaction value with a minimum fee of $1.5 million. KPMG LLP serving as accountant to Magenta and Deloitte & Touche LLP acting as accountant to Dianthus. Dianthus Therapeutics, Inc. completed the acquisition of Magenta Therapeutics, Inc. (NasdaqGM:MGTA) from a group of shareholders in a reverse merger transaction on September 11, 2023.