Avista Public Acquisition Corp. II (NASDAQ:AHPA) announced this afternoon that its shareholders have approved its combination with Ligand Pharmaceuticals Incorporated (NASDAQ: LGND) to spin-off its antibody discovery business OmniAb, Inc. at a special meeting held earlier today.
The business combination was overwhelmingly approved with 96% of the shares represented at the meeting voting in favor of the deal. Holders of 21,713,864 APAC Class A Ordinary Shares sold in APAC’s IPO redeemed their shares for a pro rata portion of the trust, or approximately $10.32 per share and $224,048,746.95 in the aggregate. Based on AHPA’s redemptions of 94.41% and estimated expenses, OmniAb expects to have approximately $95 million of net cash upon closing.
Avista II originally financed the deal with $236 million from its trust while Avista’s sponsor, Avista Capital Partners, provided at least $15 million of gross cash to the combined company through a PIPE at $10 per share. The deal also featured a facility of up to $100 million to backstop redemptions. Pursuant to that forward purchase agreement, new OmniAb will now issue the sponsor an additional 8,672,934 shares of new OmniAb common stock and an additional 1,445,489 warrants of new OmniAb, for an aggregate additional purchase price of $86,729,340.00. Ligand also contributed $15 million to OmniAb irrespective of the number of redemptions or the Avista contributions.
Shareholders of Ligand will receive shares of OmniAb common stock on a pro rata basis representing 100% of Ligand’s interest in OmniAb. Pursuant to the merger, all shares of OmniAb common stock will be automatically exchanged for shares of new OmniAb on a pro rata basis according to a base exchange ratio. This will be based on the number of shares of OmniAb common stock outstanding immediately prior to closing calculated using the treasury stock method with the number of equity awards being allocated to OmniAb in the distribution calculated based on the relative trading values of Ligand common stock in the “regular way” and “ex-distribution” markets during the five-trading-day period prior to closing.
Additionally, Ligand shareholders will receive earnout shares of new OmniAb common stock on a pro rata basis according to an earnout exchange ratio. The earnout shares will vest based upon the achievement of certain VWAP for shares of new OmniAb for any 20 trading days over a consecutive 30 trading-day period during the five-year period following the closing.
The shares will vest with respect to 50% of such earnout shares, upon achievement of a VWAP of $12.50 per share of new OmniAb common stock or upon the occurrence of a change of control transaction that will result in the holders of new OmniAb common stock receiving a price per share in excess of $12.50, and with respect to the remaining 50%, upon achievement of a VWAP of $15.00 per share of new OmniAb common stock or upon the occurrence of a change of control transaction that will result in the holders of new common stock receiving a price per share in excess of $15.00.
The spin-off of OmniAb from Ligand remains on track with an expected closing next week on November 1. The record date for the dividend of shares of common stock of OmniAb is to be distributed to Ligand shareholders on October 26, and the distribution is expected to be made on November 1, immediately prior to the business combination.
The parties initially announced the $850 million combination on March 23. The San-Diego based biopharmaceutical company is focused on developing technologies that help pharmaceutical companies discover medicine. Ligand’s OmniAb platform provides industry partners with access to a range of antibodies and screening technologies to enable discovery of next-generation therapeutics.
- Credit Suisse is acting as lead capital markets and financial advisor to OmniAb.
- Cowen, Stifel, SVB Leerink and Truist Securities are also acting as capital markets and financial advisors to OmniAb.
- CJS Securities, Craig-Hallum Capital Group LLC, H.C. Wainwright & Co. and Roth Capital Partners are acting as advisors to OmniAb.
- Weil, Gotshal & Manges LLP is legal advisor to APAC.
- Latham & Watkins LLP is legal advisor to Ligand.
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