Mallinckrodt Plc’s share price down, acquires Questcor Pharmaceuticals Inc. for 5.6 billion dollars to expand its reach in the specialty pharmaceutical company

Mallinckrodt Plc will purchase Questcor Pharmaceutical Inc. in a deal estimated to 5.6 billion dollars, which is also expected to help Mallinckrodt to expand its reach in the pharmaceutical market by offering diversified drugs. According to a statement by Mallinckrodt on Monday, the company will pay 86.08 dollars per share.

After the acquisition is finalized, the rights over Questcors H.P. Acthar gel, an injectable drug, will be gained by Mallinckrodt. The drug has been approved by the Food and Drug Administration in the U.S. for 19 conditions, many of which associated with autoimmune and inflammatory diseases. This increases companys presence in the rapidly-growing market of branded and generic specialty drugs.

In addition, 30 dollars per share in cash and 0.897 Mallinckrodt shares will be obtained by Questcor shareholders under the terms of the contract. The acquisition is expected to be finalized during the third quarter of 2014. According to the statement, shareholders of Mallinckrodt will own 50.5% of the combined company, while the remaining part will be held by shareholders of Questcor.

The purchase of Questcor Pharmaceuticals Inc. is the second deal of Mallinckrodt within a period shorter than two months, following the acquisition of Cadence Pharmaceuticals Inc. in a 1.3-billion-dollars deal in February 2014. The agreement is also expected to reduce Mallinckrodts focus on medical imaging.

The new company, which is to be formed after the deal is finalized, will be under the lead of current President and Chief Executive Officer of Mallinckrodt Plc – Mr. Mark Trudeau. Executives of Questcor are also expected to become part of the managing team of the new company after the merger.

According to the Financial Times, shares of Mallinckrodt Plc. fell 0.59% to 62.15 USD on the New York Stock Exchange today. According to CNN Money, the 11 analysts offering 12-month price forecasts for Mallinckrodt Plc have a median target of 70.00, with a high estimate of 87.00 and a low estimate of 39.00. The median estimate represents a +13.16% increase from the last price of 61.86 USD.