Transaction Case Studies

FAIR MARKET VALUATION SUPPORTS A SUCCESSFUL MERGER AND DOWNSTREAM $4B ACQUISITION

Situation Assessment

  • Asklepios Biopharmaceutical (AskBio) is a privately held, clinical stage biopharmaceutical company focused on the development of novel AAV gene-therapies
  • In addition to assets developed in-house, AskBio maintains equity stakes in multiple external therapeutic and manufacturing subsidiaries, and is a minority equity shareholder in Brain Neurotherapy Bio (BNB), who is developing an AAV gene therapy for Parkinson’s
  • Ahead of a planned IPO transaction in 2020, AskBio was seeking to simplify their corporate structure and engaged Locust Walk to represent both companies in determining a fair market value to support a proposed all stock merger
  • Locust Walk developed detailed valuation materials for both companies that not only supported negotiations between AskBio and BNB, but also a subsequent $4B M&A transaction by Bayer

Key Activities

  • Worked with AskBio’s corporate strategy and BNB’s core executive team to define deal goals to ensure deal success
  • Developed valuation ranges for each company by conducting thorough diligence and analyzing all relevant therapeutic, manufacturing and other material assets via:
  • Discounted cash flow/sum-of-the-parts analysis supported by secondary market research and internal cost assumptions
  • Comparable corporate, therapeutic and manufacturing deals
  • Comparable public gene therapy companies and IPOs
  • Informed and provided guidance to AskBio and BNB management teams on relative value ranges that constituted a fair transaction based on Locust Walk’s view

Successful Outcome

  • Locust Walk aided initial deal discussions and developed standalone company valuations that directly supported primary negotiations of a merger that closed January 2021
  • Transaction materials informed subsequent negotiations with Bayer and enabled AskBio to progress rapidly towards execution
  • Deal terms in BNB and Bayer transactions were in line with Locust Walk’s implied valuation ranges

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