Matrixx Enters Merger Agreement with HIG Worth $75.2M


Zicam Cold Remedy maker Matrixx Initiatives (NASDAQ:MTXX) surged more than 56% to a 52-week high Tuesday after inking a deal to be acquired by private equity company H.I.G. Capital for $75.2 million.

The news follows the company's announcement that it will pay $15.5 million to settle lawsuits over its cold medicine, under which users alleged loss of smell or taste from taking the drugs.

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The complaints led Matrixx to pull the drug from shelves in June 2009 after the US Food and Drug Administration advised customers to stop using its nasal gel, leading to a massive sell off by traders that sent its stock plummeting more than 250% in one day.

Under the terms of the deal, affiliates of H.I.G. will commence a tender offer to purchase all of Matrixx’s outstanding shares of $8 each, representing a 56.3% premium to its closing price on Monday.

The transaction’s close is subject to successful completion of the tender offer in January and other regulatory and customary closing conditions.

Matrixx's board of directors has unanimously approved the merger agreement and has recommended its shareholders tender their shares in connection with the offer.

The over-the-counter health-care company may solicit acquisition proposals from third-parties until Jan. 22.

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