Horizon Pharma plans to acquire Raptor Pharmaceutical for approximately $800 million, the companies said today, in a deal designed to create a combined developer with a stronger focus on rare disease drugs.

The combined company will expand Horizon’s nine-drug portfolio with Raptor’s Procysbi® (cysteamine bitartrate) delayed-release capsules, a treatment marketed in the U.S. and EU for nephropathic cystinosis, and Quinsair™ (aerosolized form of levofloxacin) global rights, marketed in the EU and Canada—but not approved in the U.S.—for management of chronic pulmonary infections due to Pseudomonas aeruginosa in adults with cystic fibrosis.

“The proposed acquisition of Raptor furthers our commitment to helping people with rare diseases and is a significant step in advancing our strategy to expand our rare disease business,” Timothy P. Walbert, Horizon Pharma’s chairman, president and CEO, said in a statement.

Horizon now markets its nine medicines through its orphan, rheumatology, and primary-care business units. In the first half of this year, rare disease revenue accounted for 45% of total Horizon Pharma revenue on a pro forma basis.

Raptor has previously disclosed total net sales guidance for 2016 of between $125 million and $135 million, including sales from both Procysbi and Quinsair.

The deal is Horizon’s third acquisition in the past 18 months designed to boost its rare disease portfolio. Horizon in January completed its acquisition of Crealta Holdings for approximately $510 million, and last year bought Hyperion Therapeutics for $1.1 billion.

Horizon said the deal for Raptor is expected to add to its adjusted earnings before interest taxes, depreciation, and amortization (EBITDA) in 2017—but added that details will be provided later on its guidance for full-year 2017 net sales and adjusted EBITDA in the first quarter 2017.

The acquisition would also allow expansion in Europe and other international markets, Horizon and Raptor said.

Horizon intends to finance the transaction through $675 million of external debt as well as cash on hand. The company said it has fully committed financing with Bank of America Merrill Lynch, JPMorgan Chase Bank, N.A., Jefferies Finance, and Cowen Structured Holdings, an affiliate of Cowen and Co.  As of June 30, 2016, Horizon had $424.5 million of cash and cash equivalents.

At $9 per share in cash, Horizon plans to pay a nearly 21% premium over Raptor’s closing share price Friday of $7.45.

“This transaction will deliver significant and immediate value to our shareholders through a compelling all-cash premium and provide ongoing value to our patients, their families, and the physicians who treat them,” added Julie Anne Smith, Raptor’s president and CEO.

The boards of both companies have approved the deal, which is expected to close in the fourth quarter of 2016—subject to customary closing conditions and regulatory approvals, including antitrust approval in the U.S.

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