Alvotech and Oaktree Acquisition Corp II establish financing facilities to enhance the company’s capital position and to replace any redeemed capital as part of their proposed merger.
The two parties agree to reduce the minimum cash condition outlined in the merger agreement, thereby enhancing deal certainty in their proposed business combination.
In late 2021, Alvotech and Oaktree Acquisition Corp II, a special purpose acquisition company sponsored by an affiliate of Oaktree Capital Management, announced a definitive merger agreement. Upon completion of the transaction, the combined company’s securities are expected to be traded on NASDAQ under the symbol “ALVO.”
“We believe this transaction will accelerate our ability to achieve our vision, and we could not be more excited about what the future holds for Alvotech.”
“Alvotech is in a unique position to impact the global healthcare ecosystem in a positive way and transform patient’s lives. Biosimilar medicines can increase access for patients whilst lowering cost for healthcare systems, and that helps to align our mission with all of our stakeholders. We believe this transaction will accelerate our ability to achieve our vision, and we could not be more excited about what the future holds for Alvotech,” said Mark Levick, CEO of Alvotech at the time of the announcement.
Now, Alvotech Holdings has announced that, subject to the completion of the announced business combination between Alvotech, Alvotech Lux Holdings S.A.S. and Oaktree Acquisition Corp. II, the company has secured a Standby Equity Purchase Agreement (SEPA) facility from YA II PN, Ltd and signed a binding term sheet for a debt facility from Sculptor Capital Management.
Provide access of up to 250 million USD
The two facilities are intended to provide access of up to 250 million USD and are expected to be used to replace potential redemptions by OACB shareholders that may occur as part of the Business Combination. The Yorkville SEPA facility provides for up to 150 million USD of equity financing at the Company’s option (subject to certain limitations). Additionally, the binding term sheet with Sculptor provides for 75 million USD – 125 million USD in debt, with the exact amount to be finalized based on the level of net proceeds generated as a result of the closure of the Business Combination.
Alvotech and OACB have also agreed to reduce the minimum cash condition set forth in the merger agreement between the two companies such that, subject to certain conditions, the minimum cash condition would be satisfied through the existing private placement commitments of approximately 175 million USD and the new loan facility from Sculptor (subject to final agreement), thereby providing enhanced deal certainty for the Business Combination.
“We believe the added facilities will strengthen Alvotech’s capitalization profile when the merger with OACB is finalized.”
“We believe the added facilities will strengthen Alvotech’s capitalization profile when the merger with OACB is finalized. Specifically for the equity line, we intend to utilize the facility in amounts that are equal to or less than what we may experience in redemptions from the trust. This facility may also provide additional free float of our ordinary shares, should we experience higher than expected redemptions,” says Róbert Wessman, Founder and Chairman of Alvotech.
Photo of Alvotech facility