On Thursday, Halozyme Therapeutics, Inc. ( HALO ) submitted a non-binding proposal to Evotec SE ( EVO ) to acquire the German company for 11.00 euros per share in cash, implying a fully diluted equity value of 2.0 billion euros (around $2.11 billion).

The proposal represents a premium of 109% to Evotec’s undisturbed share price on October 15, 2024, the day before Triton Partners’ initial accumulation of Evotec shares.

Evotec offers drug discovery and development services to several biotech and pharmaceutical companies.

“The combination of Halozyme and Evotec would diversify and extend Halozyme revenue and EBITDA growth and durability well into the next decade and beyond,” said Helen Torley, president and chief executive officer of Halozyme.

Halozyme said its strong cash flow would enable ongoing investments in Evotec’s early-stage programs and new technologies.

The proposed combination is expected to significantly expand and diversify Halozyme’s revenue and EBITDA over the next decade. The combined technology offerings would open up new partnership opportunities and program expansions.

Earlier this week, a Bloomberg report highlighted that private equity firm Triton Partners was also considering acquiring Evotec. In an SEC filing, Evotec reported that Triton had acquired a 9.99% stake in the company via several open-market transactions.

During its second-quarter earnings release, Evotec disclosed it identified a headcount reduction potential of approximately 400 roles (7% of the workforce) across the global footprint and a reduction of the physical footprint by surrendering certain lease agreements.

Evotec exited gene therapy and closed a site in Orth, Austria. It also shut down chemistry activities in Lyon, France, and separated a manufacturing facility in Halle/Westphalia, Germany.

Recently, Halozyme reported third-quarter 2024 revenue of $290.1 million, compared to $216.0 million in the third quarter of 2023.

While announcing its third quarter results, Halozyme raised the fiscal year 2024 adjusted EPS guidance to $4.00-$4.20 from $3.65-$4.05 (current consensus $4.15) and revenue guidance to $970 million—$1.02 billion from $935 million—$1.015 billion (current consensus of $1.003 billion).

Evotec responded that it would thoroughly evaluate this expression of interest, determine the appropriate next steps, and communicate its decisions to the capital market in compliance with legal requirements.

Price Action: HALO stock is down 14.8% at $45.97 and EVO stock is up 8.43% at $5.53 at last check Friday.

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