Zealand Pharma A/S (CPSE:ZEAL) entered into a stalking horse agreement to acquire substantially all assets of Valeritas Holdings, Inc. on February 9, 2020. The consideration includes cash consideration of $23 million and the assumption of certain liabilities related to the ongoing business. The transaction contemplates the retention of nearly the entirety of the Valeritas workforce.

Valeritas expects to continue operating its business as usual and has obtained a commitment for debtor-in-possession ("DIP") financing from HB Fund LLC. Subject to court approval, this DIP financing will provide sufficient liquidity to support ongoing operations during the process, including the continued production and sale of V-Go®. The proposed sale is to be conducted through a court supervised sale process under Section 363 of the Bankruptcy Code and will be subject to court approved bidding procedures and receipt of competing offers at auction.

On March 12, 2020, the United States Bankruptcy Court for the District of Delaware entered an order (the “DIP Order”) granting final approval of Valeritas's senior secured priming debtor- in- possession financing facility (the “DIP Facility”) by and among Valeritas and certain of its subsidiaries, as borrower, the lenders party thereto, and HB Fund LLC, as the “DIP Lender.” Under the terms of the DIP Order, Valeritas will have access to the full $12 million DIP Facility. If Zealand's bid is selected, the sale will be subject to approval by the Bankruptcy Court and certain other closing conditions. The transaction is subjected to execution of intellectual property assignment and assumption agreement, antitrust approval and regulatory approval.

As on March 16, 2020, the Bankruptcy Court is scheduled to hear a motion, on March 20, 2020 to, to issue an order approving the sale. Valeritas received no other bids by the bid deadline of March 12, 2020. As of March 20, 2020, U.S. Bankruptcy Court for the District of Delaware approved the sale.

Assuming approval by the Bankruptcy Court, the transaction is expected to close on or around April 3, 2020. As of March 20, 2020, the transaction is expected to be completed during the first week of April. Maris J. Kandestin and Rachel Ehrlich Albanese of DLA Piper LLP (US) is serving as legal counsel, Lincoln International LLC is serving as investment banker, and PwC Corporate Finance LLP is serving as financial advisor to Valeritas respectively.

Marc Recht of Cooley LLP is serving as legal advisor to Zealand Pharma in this transaction.