Merck KGaA has announced a definitive agreement to acquire SpringWorks Therapeutics (SWTX, Financial) for $47 per share in cash, valuing the company at approximately $3.9 billion. This acquisition price translates to a premium of 26% based on SpringWorks' 20-day volume-weighted average price of $37.38 as of February 7, 2024, before any market speculation surfaced.
The deal, expected to close in the second half of 2025, is anticipated to instantly enhance Merck KGaA's revenue streams and contribute positively to its earnings per share by 2027. The transaction will be financed through a combination of available cash and newly acquired debt, leaving Merck KGaA open to further large acquisitions, particularly within its Life Science segment. The company remains committed to maintaining a strong investment-grade credit rating.
Board members from both Merck KGaA and SpringWorks have unanimously approved the deal, which awaits the customary closing requirements, including shareholder consent from SpringWorks and necessary regulatory clearances.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 8 analysts, the average target price for SpringWorks Therapeutics Inc (SWTX, Financial) is $72.50 with a high estimate of $84.00 and a low estimate of $63.00. The average target implies an upside of 62.12% from the current price of $44.72. More detailed estimate data can be found on the SpringWorks Therapeutics Inc (SWTX) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, SpringWorks Therapeutics Inc's (SWTX, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
