Royalty Pharma Advances Integration with RP Management Acquisition
Deal News | Jan 10, 2025 | Globenewswire
Royalty Pharma plc, a leading buyer of biopharmaceutical royalties, announced its plan to acquire its external manager, RP Management, LLC, in a move to streamline its operations and enhance shareholder value. The acquisition is anticipated to yield significant annual cash savings, enhancing investment returns and improving governance. The transaction, valued at approximately $1.1 billion, will primarily be settled in equity that vests over several years, alongside the assumption of $380 million in existing debt. Concurrently, Royalty Pharma's Board has approved a $3 billion share repurchase plan, with intentions of repurchasing $2 billion worth of shares in 2025, subject to market conditions. The integration promises to bring savings exceeding $1.6 billion over a decade while ensuring long-term management continuity and simplified corporate governance. Financial advisors and legal counsel have been appointed to assist in the transaction, which is expected to close by the second quarter of 2025, pending shareholder approval.
Sectors
- Biopharmaceuticals
- Financial Services
Geography
- United States – Royalty Pharma is based in New York, a key market and operational hub for the company.
Industry
- Biopharmaceuticals – Royalty Pharma operates in the biopharmaceutical industry, focusing on acquiring and managing medical royalties.
- Financial Services – With activities involving investments and share repurchase programs, Royalty Pharma also functions within the financial services sector.
Financials
- $1.1 billion – Total transaction value for the acquisition of RP Management, LLC.
- $3 billion – Total value of the share repurchase program authorized by Royalty Pharma plc.
- $2 billion – Intended value of shares to be repurchased in 2025, subject to market conditions.
- Greater than $1.6 billion – Cumulative cash savings expected over the next ten years post-acquisition.
- Greater than $100 million – Projected annual cash savings by 2026 from the acquisition.
- Greater than $175 million – Projected annual cash savings by 2030 from the acquisition.
- $380 million – Assumption of existing RP Management debt by Royalty Pharma.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Royalty Pharma plc | Acquirer | Company | A leading buyer of biopharmaceutical royalties emphasizing investment in innovation. |
| RP Management, LLC | Target Company | Company | The external manager currently conducting Royalty Pharma's business operations. |
| Henry Fernandez | Lead Independent Director and Chairman/CEO of MSCI Inc. | Person | Key influencer in the transaction announcement and shareholder alignment strategy. |
| Pablo Legorreta | Founder and CEO of Royalty Pharma | Person | Driving force behind internalization strategy and governance restructuring. |
| Morgan Stanley & Co. LLC | Financial Advisor | Company | Advising Royalty Pharma plc’s Board on financial aspects of the transaction. |
| Davis Polk & Wardwell LLP | Legal Advisor | Company | Providing legal counsel to Royalty Pharma plc in the acquisition. |
| Evercore | Financial Advisor | Company | Advising RP Management, LLC in the transaction. |
| Akin Gump LLP | Legal Advisor | Company | Legal counsel to RP Management, LLC. |
| BofA Securities, Inc. | Financial Advisor | Company | Advisor to Royalty Pharma plc on financial matters. |