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THE INVESTOR
August 04, 2020
Big Reunion

Deals

HLB to inject $161m in US unit for indirect merger with Elevar

  • PUBLISHED :November 01, 2019 - 17:44
  • UPDATED :November 01, 2019 - 17:44
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Ulsan-based lifeboat maker HLB said Nov. 1 it will inject $161 million into its wholly-owned US subsidiary HLB USA by Nov. 5.

This is part of HLB USA’s planned merger with Salt Lake City-based biopharma firm Elevar Therapeutics, another HLB subsidiary formerly known as LSK BioPharma until September. 

HLB officials said the cash investment will allow HLB USA to carry out a forward triangular merger involving HLB USA and Elevar, so that HLB will be able to take full control of Elevar’s anti-cancer therapy rivoceranib.

“There were limitations in the business relationship between HLB and Elevar going forward as a parent company and a subsidiary, but with the merger, HLB’s biotechnology business will be able to gather steam,” HLB Vice President Ahn Ki-hong said in a statement.

HLB added the investment in HLB USA was the final touch for the merger deal, poised to close by Nov. 15, leaving only customary closing conditions before wrapping up.

Under the forward triangular merger scheme, Elevar will merge with HLB USA -- a special purpose company -- while Elevar’s shareholders will be given HLB’s common shares, instead of HLB USA shares, a year after the deal closes.

By Nov. 15, HLB USA will use the cash investment to buy its parent firm HLB’s common shares worth a corresponding amount for Elevar’s shareholders.

The share exchange ratio of the merger was fixed at HLB’s 18,033 shares valued at 72,012 won ($62) per share for Elevar’s 10,000 shares valued at $122 each, earlier in October.

The deal comes 14 years after HLB first bought shares in LSK BioPharma. Once the merger is complete, HLB is expected to strengthen its biopharma business portfolio, which is currently led by affiliate HLB Life Science.

By Son Ji-hyoung (consnow@heraldcorp.com)

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