Assertio Therapeutics, Inc. (NasdaqGS:ASRT) executed non-binding indication of interest to acquire Zyla Life Sciences (OTCPK:ZCOR) on February 25, 2020. Assertio Therapeutics, Inc. (NasdaqGS:ASRT) entered into an agreement to acquire Zyla Life Sciences (OTCPK:ZCOR) for $20.9 million on March 16, 2020. Under the terms of the agreement, Zyla stockholders will be entitled to receive 2.5 shares of common stock of a newly formed holding company for each share of Zyla common stock held. In connection with the transaction, Zyla will repay its promissory note in full and the outstanding balance under its $20 million credit facility. Upon termination of the Merger Agreement under certain specified circumstances, Zyla will be obligated to pay Assertio a termination fee of $3.4 million. The Merger Agreement also provides that Assertio or Zyla will be obligated to pay the transaction expenses of the other party, up to a maximum amount of $1.75 million.

Assertio entered into a transition agreement with Arthur Higgins, the President and Chief Executive Officer of Assertio. The holding company will assume only the $95 million principal amount of Zyla's outstanding senior debt under amended terms that provide the combined company flexibility for future business development. The newly combined company will retain the Assertio name and trade on NASDAQ under the ASRT ticker. Post-completion, the combined entity will be 68% owned by Assertio shareholders and 32% by Zyla shareholders. Pursuant to the completion of the merger, Zyla and Assertio will become wholly- owned subsidiaries of Assertio Holdings, Inc.

Arthur Higgins, President and Chief Executive Officer of Assertio, will become Non-Executive Chairman of the board of the new company, and Todd Smith, the current President, Chief Executive Officer and Director of Zyla, will become President, Chief Executive Officer and Director with Daniel A. Peisert as Chief Financial Officer and Mark Strobeck as Chief Operating Officer of the new company. There will be nine Directors on the Board of Directors of the new company, six from Assertio including Arthur Higgins, Heather L. Mason, William T. McKee, Peter D. Staple, James L. Tyree, David E. Wheadon and three from Zyla, including Todd N. Smith, Andrea Heslin Smiley and Timothy P. Walbert, Chairman, President and Chief Executive Officer of Horizon Therapeutics and Chairman of Zyla's Board of Directors, who will become the Lead Independent Director of the board of the new company. The transaction is subject to approval by Assertio and Zyla shareholders, registration on From S-4 to be filed with the Securities and Exchange Commission, approval by NASDAQ of the listing of consideration shares, Assertio and its subsidiaries having minimum cash and cash equivalents equal to $25 million in the aggregate and the satisfaction of other customary closing conditions. The Boards of Directors of both companies have approved the transaction. The transaction is expected to close in the second quarter of 2020. A Special Meeting of Zyla will be held on May 19, 2020. As of March 25, 2020, the transaction is expected to close prior to June 30, 2020. As of May 11, 2020, the closing of the merger is expected to occur shortly after Assertio's shareholders meeting on May 19, 2020.

Ryan A. Murr and Todd J. Trattner of Gibson, Dunn & Crutcher LLP acted as legal advisors while Declan Quirke, Neal Karnovsky, Alex Halpern, Erin Lo, Alec Grant of Stifel, Nicolaus & Company, Incorporated acted as financial advisor and fairness opinion provider to Assertio. Sarah Gelb, Eric Rubin, Josh Milgrim, Shmuel Vasser, Thomas Rayski and David Rosenthal of Dechert LLP acted as legal advisors while MTS Securities, LLC acted as financial advisor and fairness opinion provider to Zyla. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to Zyla Life Sciences. Computershare acted as the transfer agent for Zyla. Ernst & Young LLP is acting as Assertio's independent auditor. Zyla Life Sciences paid $0.3 million to MTS Securities as fees for its fairness opinion and $2.4 million in fees for being its financial advisor. Innisfree M&A Inc. acted as transfer agent for Assertio for a fee approximately $50,000. Assertio agreed to pay Stifel a fee of $1.25 million for its services, $0.75 million of which became payable upon the delivery of the Stifel Opinion, and the remaining portion of which is contingent upon the completion of the merger.

Assertio Therapeutics, Inc. (NasdaqGS:ASRT) completed the acquisition of Zyla Life Sciences (OTCPK:ZCOR) on May 20, 2020. Morrison & Foerster acted as legal advisor to Stifel, Nicolaus & Company, Incorporated, financial advisor to Assertio Therapeutics.