Catalent to acquire Paragon Bioservices for $1.2 billion in cash

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Catalent Inc. said Monday it has agreed to acquire Paragon Bioservices Inc. for $1.2 billion in cash. Calent, a provider of delivery technologies for drugs, biologics and consumer health products, said it expects the deal to close in the second quarter. Privately held Paragon is a viral vector development and manufacturing partner for gene therapies. "Paragon brings specialized expertise in adeno-associated virus (AAV) vectors, the most commonly used delivery system for gene therapy, as well as unique capabilities in GMP plasmids and lentivirus vectors," Catalent said in a statement. Paragon is expected to generate more than $200 million in revenue in 2019 with nearly 90% of that sum already in signed contracts. The deal is expected to boost Catalent's adjusted net income per share in the second full fiscal year after closing. Catalent will finance the deal with the proceeds of a $650 million term loan and by issuing $650 million of convertible preferred stock to funds tied to Leonard Green and Partners LP. Shares were not yet active premarket, but have fallen 2.4% in the last 12 months, while the S&P 500 has gained 9.5%.