Transaction Case Studies
RAPID M&A ADVISORY
Situation Assessment
- Pipeline Therapeutics is a privately held biotechnology Company focused on restoring the function of CNS disorders through remyelination. Pipeline’s lead asset is a preclinical remyelination therapy for Multiple Sclerosis
- Sirocco Therapeutics is a privately held biotechnology company developing assets to treat hearing losses and related disorders. Sirocco’s lead asset is an IND-ready therapy for hearing loss
- Both companies are portfolio companies of Versant Ventures
- Both companies expressed an interest in merging in order to build a complete portfolio centered around neuro-regeneration
- Pipeline selected Locust Walk as its exclusive valuation, deal negotiation, and strategic advisor
- Locust Walk developed a detailed valuation of both companies, which it leveraged in an arms-length negotiation with Sirocco to determine merger terms
Key Activities
- Worked with senior management team to define goalposts for deal terms that align with company goals and could ensure deal success
- Developed in-depth comparable deals analysis and binomial option analysis to fairly value both companies and guide term negotiations
- Conducted thorough diligence, built DCF valuation model and negotiated model inputs with Sirocco’s advisor to come to agreement on relative value of both companies
- Locust Walk provided guidance on the fairness of the transaction and the relative value to Pipeline’s Board of Directors
- Assisted the management team during negotiations with Sirocco’s advisor
Successful Outcome
- Pipeline and Sirocco successfully completed the merger on friendly terms with an agreed upon deal split
- Locust Walk successfully negotiated the terms of the merger within four weeks
