Announcement • Dec 26
Equillium, Inc. (NasdaqGM:EQ) cancelled the acquisition of Metacrine, Inc. (NasdaqCM:MTCR) from a group of shareholders.
Equillium, Inc. (NasdaqGM:EQ) entered into the letter of intent to acquire Metacrine, Inc. (NasdaqCM:MTCR) from a group of shareholders on May 12, 2022. Equillium, Inc. (NasdaqGM:EQ) entered into a definitive merger agreement to acquire Metacrine, Inc. (NasdaqCM:MTCR) from a group of shareholders on September 6, 2022. Equillium will acquire Metacrine in an all-stock transaction. In connection with the Merger, all of the issued and outstanding shares of common stock of Metacrine, par value $0.0001 per share (the “ Shares ”), will be cancelled and converted into the right to receive consideration per share consisting of (i) the exchange ratio (the “ Exchange Ratio ”) determined by dividing (x) (a) 125% of Metacrine’s net cash as of the closing of the Merger (the “ Closing ”) by (b) the price per share of common stock of Equillium, par value $0.0001 per share (the “ Equillium Common Stock ”) determined based on the 10 day trading volume weighted average price per share of Equillium Common Stock calculated 10 trading days prior to the Closing date, provided that the price per share of Equillium Common Stock shall be no less than $2.70 and no more than $4.50 by (y) the aggregate fully diluted shares of Metacrine, plus (ii) any cash payable in lieu of fractional shares of Equillium’s Common Stock. The Merger is intended to be a taxable transaction. Equillium is not planning to retain any current Metacrine employees and expects to assume minimal operating expenses while maintaining sole discretion over the timing and extent of advancing development of the Metacrine programs. The Merger Agreement contains certain termination rights for both Equillium and Metacrine and further provides that, in connection with the termination of the Merger Agreement by Metacrine under certain circumstances, including termination by Metacrine to accept and enter into a definitive agreement with respect to a superior proposal, Metacrine must pay Equillium a termination fee of $1,250,000. In connection with the termination of the Merger Agreement by Equillium under certain circumstances, including termination by Equillium to accept and enter into a definitive agreement with respect to a superior proposal, Equillium must pay Metacrine a termination fee of $1,750,000. Preston Klassen, M.D., MHS, president and chief executive officer of Metacrine, to be appointed to the Board of Directors.
The transaction is pending approval from both Equillium and Metacrine shareholders, Metacrine having minimum net cash of $23 million, the effectiveness of a registration statement on Form S-4 to be filed with the Securities and Exchange Commission, Equillium Common Stock issuable in connection with the Merger shall have been approved for listing on Nasdaq and other customary closing conditions. The transaction has been approved by the boards of directors of both companies. The board of directors of Metacrine has resolved to recommend that Metacrine’s stockholders adopt the Merger Agreement. In addition, the board of directors of Equillium has resolved to recommend that Equillium’s stockholders approve the issuance of Equillium Common Stock in the Merger. The acquisition is anticipated to close late 2022. As of November 9, 2022, the transaction is expected to close on December 23, 2022.
MTS Securities LLC is serving as Metacrine’s financial advisor for the transaction. MTS Health Partners, L.P. acted as financial advisor with a service fee of $1.55 million and fairness opinion provider with a service fee of $450,000 to Metacrine. Vantage Point Advisors, Inc., Investment Banking Arm acted as financial advisor and fairness opinion provider to Equillium. Tom Coll and Rama Padmanabhan of Cooley LLP acted as legal advisor to Equillium. Robert Ishii, Miranda Biven and Catherine Riley Tzipori of Wilson Sonsini Goodrich & Rosati, P.C. acted as legal advisor to Metacrine. American Stock Transfer & Trust Company, LLC acted as transfer agent to Equillium. Morrow & Co., LLC acted as information agent with a service fee of $25,000 to Metacrine. Equillium has agreed to pay VPA an aggregate fee of $120,000 with $48,000 payable upon the execution of the engagement letter and $72,000 payable at the time delivering its opinion.
Equillium, Inc. (NasdaqGM:EQ) cancelled the acquisition of Metacrine, Inc. (NasdaqCM:MTCR) from a group of shareholders on December 23, 2022. Metacrine and Equillium mutually agreed to release each other from all known and unknown claims related thereto, and no termination fee will be payable by Metacrine or Equillium in connection with the termination of the merger agreement.