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Oaktree II (OACB) Shareholders Approve Alvotech Deal

Oaktree II (OACB) Shareholders Approve Alvotech Deal

Oaktree II (NYSE:OACB) announced that its shareholders have voted to approve its combination with biopharma company Alvotech in a special meeting held earlier today.

Today’s press release did not disclose redemption amounts, but OACB closed today at $9.86.

The SPAC recently added up to $250 million to its combination with Alvotech in April through two facilities to replace potential redemptions. The backstops are made up of an $150 million standby equity purchase agreement (SEPA) from YA II PN, an affiliate of Oaktree II’s sponsor, and a binding term sheet providing $75 million to $125 million in debt from Sculptor Capital Management. Each of these may be pulled upon at Alvotech’s discretion with the exact amount to be determined by redemptions at close, but together they effectively backstop Oaktree II’s entire $250 million trust.

Furthermore, Oaktree II announced in January that it had secured an additional $21 million in funding for a total PIPE size of approximately $175 million to finance its combination with biopharma company Alvotech. At $10.00 per share, this additional funding was driven by increased interest from Icelandic investors, including Arctica Finance, Arion Bank, and Landsbankinn as well as other top-tier investors including Suvretta Capital, Athos (the Strüngmann Family Office), CVC Capital Partners, Temasek Holdings, Farallon Capital Management, and Sculptor Capital Management, among others.

The parties originally expected to generate gross proceeds to Alvotech in excess of $475 million, including cash proceeds of approximately $250 million from Oaktree II’s trust account; in excess of $175 million from the upsized PIPE investors; and a $50 million equity commitment from existing shareholders which funded before year-end 2021.

Nonetheless, Oaktree II expects to close the deals on Wednesday, June 15, 2022, subject to the satisfaction of all other applicable closing conditions. The ordinary shares of Alvotech are expected to trade under the new ticker symbol “ALVO” on The Nasdaq Stock Market in New York and The Nasdaq First North Growth Market in Reykjavik and the warrants of Alvotech are expected to trade on The Nasdaq Stock Market in New York under the new ticker symbol “ALVOW”.

The parties initially announced the $2.25 billion combination on December 7, 2021. Reykjavik, Iceland-based Alvotech is developing medicines that are biosimilar to branded pharmaceuticals on the market, potentially providing them to the market at lower prices.


ADVISORS

  • Morgan Stanley & Co. LLC and Credit Suisse served as financial advisors to Alvotech.
  • Deutsche Bank Securities served as financial advisor and capital markets advisor to Oaktree Acquisition Corp. II.
  • Deutsche Bank Securities and Morgan Stanley & Co. LLC served as lead private placement agents, and Citigroup Global Markets Inc. and Credit Suisse also served as private placement agents, for Oaktree Acquisition Corp. II in connection with the PIPE Transaction.
  • Cooley (UK) LLP served as lead legal counsel to Alvotech.
  • Kirkland and Ellis LLP and King & Spalding served as legal counsel to Oaktree Acquisition Corp. II.
  • Shearman & Sterling LLP served as legal counsel to the placement agents.