Anatomy of a Deal: Good Things Come in Small (and Very Complicated) Packages

Abstract

Acorda is a biopharmaceutical company focused on developing therapies that restore function and improve the lives of people with neurological disorders. Acorda recently completed the acquisition of Biotie Therapies, a Finnish company with several drug development programs, including tozadenant, a Parkinson’s disease therapeutic in late stage development that fully aligns with Acorda’s neurology focus. The deal was the first-ever acquisition of a dual-listed Helsinki Stock Exchange/NASDAQ company. This was thus new territory for Acorda’s experienced in-house and external legal, business development, finance, and accounting teams, as well as other outside advisors. While this novelty initially seemed like it would be no more than an interesting footnote to the deal, it turned out to be one of the key drivers both for deal structure and for a number of business terms. Prior to the acquisition, Biotie was a small R&D-stage company without any marketed products. We agreed to purchase Biotie for almost $400 million in cash. While there is no such thing as a routine M&A deal, this all-cash acquisition might have initially appeared to be a typical M&A transaction. Step by step, however, complexity mounted as we looked closer at the company and had to navigate through transaction specifics. Factors unique to Biotie and its Finnish heritage would figure prominently, including the dual Finnish/U.S. listing, the presence of employees in both Finland and the U.S., and a corporate structure that includes subsidiaries formed in Finland, the U.S. and other countries. Deal structure and timing deviated from typical U.S. deals, and were driven largely by Finnish corporate law, the intertwining of Finnish and U.S. securities laws, and other cross-border complexities. A myriad of other cross-border legal, finance and tax considerations challenged us throughout the deal, and even today have an ongoing impact as we work through the post-closing integration process. Our experience with this unusual deal has demonstrated, yet again, that complexity is often driven by considerations unrelated to deal size.