Amphastar Medication Co., LLC entered into an asset purchase agreement to acquire BAQSIMI worldwide and related assets of Eli Lilly and Company (NYSE:LLY) for $1.2 billion on April 21, 2023. Pursuant to the terms of the agreement, Amphastar will pay Lilly $500 million in cash at closing and an additional $125 million in cash upon the one-year anniversary of closing. Lilly is also eligible to receive sales-based milestone payments of up to $450 million in aggregate. In addition, the Assumed Liabilities will include an assumption of certain earnout obligations of Lilly, which would require Amphastar to pay up to an aggregate of $125 million based on the achievement of annual net sales milestones of $350 million, $400 million and $600 million. Amphastar plans to finance the Acquisition with approximately $500 million of new debt. In connection with the Purchase Agreement, Amphastar entered into a debt commitment letter (the “Commitment Letter”), dated as of April 21, 2023, with Wells Fargo Bank, National Association; Capital One, National Association; JPMorgan Chase Bank, N.A.; East West Bank; Cathay Bank; Fifth Third Bank, National Association and CIBC Bank USA, pursuant to which the Commitment Parties have committed to provide a senior secured term loan facility in an aggregate principal amount of $500 million and a senior secured revolving credit facility in an aggregate principal amount of $150 million (collectively, the “Debt Financing”). Proceeds of Amphastar’s senior credit facilities will be used together with cash on hand to fund a portion of the purchase price payable at closing. If the Purchase Agreement is terminated under certain circumstances involving a failure to obtain certain regulatory approvals for the Acquisition, Amphastar will be obligated to pay Lilly a termination fee equal to $5 million in cash. Worldwide sales for BAQSIMI totaled $139.3 million in 2022.

The transaction has been approved by the boards of directors of both companies. The transaction is not subject to any financing conditions and is expected to close in the second or third quarter of 2023, subject to the satisfaction of customary closing conditions including obtaining required regulatory approvals for the Closing, the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Michael P. Brueck, Steven Y. Li, Amber Harezlak, Andrea Agathoklis Murino, Samantha R. Morelli, Dean S. Shulman, Adam Kool, Sharon Freiman and Ashley S. Gregory of Kirkland & Ellis LLP and Covington & Burling LLP are acting as legal counsels and J.P. Morgan Securities LLC is acting as financial advisor to Lilly. Wilson, Sonsini, Goodrich & Rosati, P.C. is acting as legal counsel and Jefferies LLC is acting as financial advisor to Amphastar.

Amphastar Medication Co., LLC completed the acquisition of BAQSIMI worldwide and related assets of Eli Lilly and Company (NYSE:LLY) on June 30, 2023.