FRLN - Syncona to Acquire Freeline Therapeutics | Benzinga
Freeline shareholders to receive $6.50 per American Depositary Share, a 51% premium over closing price prior to announcement of Syncona's initial proposal on October 18, in an all-cash transaction
Based on extensive evaluation of available strategic and financing options, Freeline's independent directors unanimously recommend transaction as best value for shareholders
Syncona to provide $15 million in convertible debt financing to cover Freeline's near-term capital needs and support ongoing advancement of its programs
LONDON, Nov. 22, 2023 (GLOBE NEWSWIRE) -- Freeline Therapeutics Holdings plc (NASDAQ:FRLN) today announced that it has entered into a definitive agreement with a newly established portfolio company of Syncona Ltd (LON: SYNC), a leading life science investor focused on creating, building and scaling global leaders in life science, to acquire Freeline in an all-cash transaction. Under the agreement, the newly established portfolio company will acquire all shares of Freeline not currently owned by Syncona for $6.50 per American Depositary Share (ADS). This price values Freeline's entire issued share capital at approximately $28.3 million and represents a 51% premium over the closing price prior to the announcement of Syncona's initial proposal on October 18. The acquisition is subject to the approval of Freeline's minority shareholders and is expected to close in the first quarter of 2024.
In conjunction with the agreement, Syncona is committing to provide Freeline with up to $15 million in secured convertible debt financing to support operations and continued advancement of FLT201, its gene therapy candidate in Gaucher disease, through completion of the transaction.
Independent Directors Recommend Minority Shareholders Vote to Approve Transaction
A special committee of the board of directors of Freeline (the "Special Committee"), comprised entirely of independent directors, has unanimously recommended that the minority shareholders vote in favor of the acquisition. The Special Committee and management team explored a range of strategic options, including potential financing and M&A transactions, engaging with multiple potential investors and third parties, before negotiating and entering into a definitive agreement with Syncona.
"We conducted a thorough exploration and review of our financing and strategic alternatives, taking into account our need for further funding to enable operations to continue beyond the near term. We are confident this negotiated transaction for Syncona to acquire Freeline and support it as a private entity is in the best interest of the company, as well as shareholders, employees and ultimately patients," said Julia P. Gregory, an independent director and Chair of the Special Committee.
"Our goal at Freeline is to bring life-changing gene therapies to people with chronic debilitating diseases, starting with FLT201, our highly differentiated AAV gene therapy candidate for Gaucher disease," said Michael Parini, Freeline's Chief Executive Officer. "Given the compelling data that we have seen from the first two patients treated with FLT201, we are committed to advancing FLT201 as expeditiously as possible, and we believe we will be better positioned to do that as a privately held, Syncona-backed company than we could by continuing as a publicly traded company in the current environment."
"We are encouraged by the data from the FLT201 program and are pleased with how Freeline is executing, but the company needs further funding to continue to drive FLT201 through clinical development," said Chris Hollowood, CEO of Syncona Investment Management Limited. "The challenging market conditions impacting the biotech sector have presented a differentiated opportunity to support the company as a private entity. We look forward to working with the team to deliver on its next milestones."
Terms of the Going-Private Transaction
It is intended that the acquisition will be implemented by means of a scheme of arrangement under Part 26 of the UK Companies Act 2006, whereby the entire issued and to be issued share capital of Freeline will be acquired by a newly established Syncona portfolio company. The acquisition is conditional on, among other things: (i) the approval by not less than 75 percent in value of the Freeline shareholders present, entitled to vote and voting, either in person or by proxy, at each of the Court Meeting and the General Meeting; and (ii) the sanction of the Scheme by the U.K. Court. Syncona will not be entitled to vote at the Court Meeting. The acquisition does not require the approval of Syncona's shareholders.
If completed, the acquisition will result in the company becoming a wholly owned Syncona portfolio company, and its ADSs will no longer be listed on Nasdaq.
Further details of the acquisition will be contained in the Scheme Document, which is intended to be made available to Freeline shareholders along with notices of the Court Meeting and General Meeting and the Forms of Proxy as promptly as reasonably practicable following the date Freeline has cleared comments received from the U.S. Securities and Exchange Committee ("SEC"), if any, on such document.
Leerink Partners is acting as exclusive financial advisor to the Special Committee, and Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to the Special Committee. Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. is acting ...