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NGM Biopharmaceuticals agrees to $135 million buyout

EditorIsmeta Mujdragic
Published 02/26/2024, 09:49 AM
Updated 02/26/2024, 09:49 AM
© Reuters.

SAN FRANCISCO - NGM Biopharmaceuticals , Inc. (NASDAQ:NGM), a biotech firm engaged in developing transformative therapeutics, is set to be acquired by Atlas (NYSE:ATCO) Neon Parent, Inc. and its affiliate Atlas Neon Merger Sub, Inc., both entities affiliated with The Column Group, LP, NGM Bio's largest shareholder. The all-cash tender offer of $1.55 per share represents an 80% premium over NGM Bio's last closing price before the acquisition interest was disclosed, valuing the company at $135 million on a fully diluted basis.

This strategic decision follows a comprehensive review of financial and strategic alternatives by a Special Committee of independent NGM Bio directors. The committee, advised by legal and financial experts, concluded that the acquisition serves the best interests of NGM Bio's unaffiliated stockholders. The offer is contingent upon the tender of a majority of shares held by unaffiliated stockholders, with no financing conditions attached.

The Column Group, along with certain other stockholders, will not receive the cash offer but will instead contribute their shares to the purchasing entity as part of the transaction. NGM Bio reported having cash and marketable securities worth approximately $144.2 million as of December 31, 2023.

The transaction is expected to close in the second quarter of 2024, after which NGM Bio will become a privately held company, and its shares will cease trading on the Nasdaq. Guggenheim Securities, LLC is the exclusive financial advisor, and Hogan Lovells US LLP serves as legal counsel to the Special Committee, while Paul, Weiss, Rifkind, Wharton & Garrison LLP is the legal counsel to the purchaser.

The information provided is based on a press release statement from NGM Biopharmaceuticals, Inc.

InvestingPro Insights

In light of the recent acquisition announcement by Atlas Neon Parent, Inc., NGM Biopharmaceuticals (NASDAQ:NGM) has shown some notable financial metrics and analyst sentiments. According to InvestingPro data, NGM currently holds a market cap of $157.99 million USD, which is higher than the acquisition valuation, suggesting potential investor optimism around the company's value. Despite a challenging financial year with a significant revenue decline of -61.4% over the last twelve months as of Q1 2023, NGM's stock has experienced a strong return over the last three months, with a price total return of 150.03%.

InvestingPro Tips have highlighted that NGM holds more cash than debt on its balance sheet, which is a positive sign for financial stability, especially during the acquisition process. Additionally, two analysts have revised their earnings upwards for the upcoming period, indicating potential future growth prospects. On the flip side, the company is quickly burning through cash and analysts do not anticipate profitability this year, which could be a concern for long-term investors.

For those considering deepening their research on NGM Biopharmaceuticals, InvestingPro offers a wealth of additional insights. There are currently 13 more InvestingPro Tips available, which could provide further depth to your analysis. To explore these tips and gain a comprehensive understanding of NGM's financial health and future prospects, visit Don't forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking even more valuable investment information.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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