Collegium Pharmaceutical, Inc SC TO-T, filed Feb 18, 2022

Collegium Pharmaceutical, Inc (COLL)

SC TO-T 2022-02-18

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Exhibit			Exhibit Name
(a)(1)(A)			Offer to Purchase dated February 18, 2022*
(a)(1)(B)			Form of Letter of Transmittal (including Internal Revenue Service Form W-9)*
(a)(1)(C)			Form of Notice of Guaranteed Delivery*
(a)(1)(D)			Form of Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees*
(a)(1)(E)			Form of Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees*
(a)(1)(F)			Summary of Newspaper Advertisement, as published in The Wall Street Journal on February 18, 2022*
(a)(5)(A)			Joint Press Release issued by Collegium Pharmaceutical, Inc. and BioDelivery Sciences International, Inc. on February 14, 2022 (incorporated herein by reference to Exhibit 99.1 of the Current Report on Form 8-K filed by Collegium Pharmaceutical, Inc. on February 14, 2022).
(a)(5)(B)			Investor Presentation of Collegium Pharmaceutical, Inc., dated February 14, 2022 (incorporated herein by reference to Exhibit 99.2 of the Current Report on Form 8-K filed by Collegium Pharmaceutical, Inc. on February 14, 2022).
(b)(1)			Debt Commitment Letter, dated February 14, 2022, by and between Collegium Pharmaceutical, Inc. and Pharmakon Advisors, L.P.*
(d)(1)			Agreement and Plan of Merger, dated as of February 14, 2022, by and among Collegium Pharmaceutical, Inc., Bristol Acquisition Company Inc., and BioDelivery Sciences International, Inc.(incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed by Collegium Pharmaceutical, Inc. on February 14, 2022).
(d)(3)			Form of Tender and Support Agreement, dated as of February 14, 2022 (incorporated by reference to Exhibit 10.1 to the Current Report Form 8-K filed by Collegium Pharmaceutical, Inc. on February 14, 2022).
(d)(4)			Confidentiality Agreement, dated as of December 29, 2021 by and between Collegium Pharmaceutical, Inc. and BioDelivery Sciences International, Inc.*
(d)(5)			Exclusivity Agreement, dated as of February 4, 2022, by and between Collegium Pharmaceutical, Inc. and BioDelivery Sciences International, Inc.*
(g)			Not applicable.
(h)			Not applicable.
107			Fee Filing Table.*

	SUMMARY TERM SHEET					1
	INTRODUCTION					10
	THE TENDER OFFER					13
	1. Terms of the Offer					13
	2. Acceptance for Payment and Payment for Shares					15
	3. Procedures for Accepting the Offer and Tendering Shares					15
	4. Withdrawal Rights					18
	5. Material United States Federal Income Tax Consequences					19
	6. Price Range of Shares; Dividends					22
	7. Certain Information Concerning BDSI					22
	8. Certain Information Concerning Collegium and Purchaser					23
	9. Source and Amount of Funds					24
	10. Background of the Offer; Past Contacts or Negotiations with BDSI					26
	11. The Transaction Agreements					30
	12. Purpose of the Offer; Plans for BDSI					49
	13. Certain Effects of the Offer					50
	14. Dividends and Distributions					51
	15. Conditions to the Offer					51
	16. Certain Legal Matters; Regulatory Approvals					53
	17. Fees and Expenses					56
	18. Miscellaneous					56
	SCHEDULE I					58

	Securities Sought			All issued and outstanding shares of common stock, par value $0.001 per share, of BDSI (the “Shares”).
	Price Offered Per Share			$5.60 per Share, in cash, subject to applicable withholding taxes and without interest (the “Offer Price”).
	Scheduled Expiration of Offer; Offer Closing			Expiration of the Offer will occur at the end of the day, one minute following 11:59 p.m., Eastern Time, on March 18, 2022, unless the Offer is extended or earlier terminated in accordance with the Merger Agreement; acceptance and payment for Shares is expected to occur on March 21, 2022, unless the Offer is extended pursuant to the terms of the Merger Agreement. See Section 1 — “Terms of the Offer.”
	Offeror			Bristol Acquisition Company Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of Collegium Pharmaceutical, Inc., a Virginia corporation (“Collegium”).
	BDSI Board Recommendation			The BDSI Board (as defined below) unanimously recommends that the holders of Shares tender their Shares pursuant to the Offer.

	High			Low
Fiscal Year Ended December 31, 2020
First Quarter		$	6.39		$	2.85
Second Quarter		$	5.39		$	3.61
Third Quarter		$	5.45		$	3.61
Fourth Quarter		$	4.60		$	3.04
Fiscal Year Ended December 31, 2021
First Quarter		$	4.99		$	3.47
Second Quarter		$	3.92		$	3.06
Third Quarter		$	4.46		$	3.41
Fourth Quarter		$	4.20		$	2.50
Fiscal Year Ending December 31, 2022
First Quarter (through February 17, 2022)		$	5.58		$	2.95

Name	Citizenship	Position
Joseph Ciaffoni	United States of America	President and Chief Executive Officer; Director
Michael Heffernan, R.Ph.	United States of America	Founder; Director; Chairman of the Board
Rita Balice-Gordon, Ph.D.	United States of America	Director; Member, Nominating and Corporate Governance Committee
Garen Bohlin	United States of America	Director; Chair, Audit Committee; Member, Compensation Committee
John A. Fallon, M.D.	United States of America	Director; Chair, Nominating and Corporate Governance Committee; Member, Audit Committee; Member, Compliance Committee
John G. Freund, M.D.	United States of America	Director; Chair, Compensation Committee; Member, Audit Committee
Gwen Melincoff	United States of America	Director; Member, Nominating and Corporate Governance Committee
Gino Santini	United States of America	Director; Chair, Compliance Committee; Member, Compensation Committee
Scott Dreyer	United States of America	Executive Vice President and Chief Commercial Officer
Shirley Kuhlmann	United States of America	Executive Vice President, General Counsel and Secretary
Richard Malamut, M.D.	United States of America	Executive Vice President, Chief Medical Officer
Colleen Tupper	United States of America	Executive Vice President and Chief Financial Officer

	If delivering by mail:			If delivering by hand, express mail, courier or any other expedited service:
	American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219 Phone: Toll-free (877) 248-6417 (718) 921-8317 Fax: 718 234-5001			American Stock Transfer & Trust Company, LLC Operations Center Attn: Reorganization Department 6201 15th Avenue Brooklyn, New York 11219

		SPECIAL PAYMENT INSTRUCTIONS (See Instructions 1, 4, 5 and 7)
		To be completed ONLY if Share Certificates not validly tendered or not accepted for payment and/or the check for the Cash Amount in consideration of Shares validly tendered and accepted for payment are to be issued in the name of someone other than the undersigned:
		Issue: ☐ Check and/or ☐ Share Certificates to:
		Name: (Please Print)
		Address: (Include Zip Code)
		(Tax Identification or Social Security Number)

		SPECIAL DELIVERY INSTRUCTIONS (See Instructions 1, 4, 5 and 7)
		To be completed ONLY if Share Certificate(s) not validly tendered or not acceptable for payment and/or the check for the Cash Amount of Shares validly tendered and accepted for payment are to be sent to someone other than the undersigned or to the undersigned at an address other than that shown in the box titled “Description of Shares Tendered” above:
		Issue: ☐ Check and/or ☐ Share Certificates to:
		Name: (Please Print)
		Address: (Include Zip Code)

		IMPORTANT - SIGN HERE (U.S. Holders Please Also Complete the Enclosed IRS Form W-9) (Non-U.S. Holders Please Obtain and Complete IRS Form W-8BEN or W-8BEN-E or Other Applicable IRS Form W-8)
		(Signature(s) of Stockholder(s)) Dated: , 22
		(Must be signed by registered owner(s) exactly as name(s) appear(s) on Share Certificate(s) or on a security position listing or by person(s) authorized to become registered owner(s) by certificates and documents transmitted herewith. If signature is by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5. For information concerning signature guarantees, see Instruction 1.)
		Name(s): (Please Print)
		Capacity (full title):
		Address: (Include Zip Code)
		Area Code and Telephone Number:
		Tax Identification or Social Security No.:

		GUARANTEE OF SIGNATURE(S) (For use by Eligible Institutions only; see Instructions 1 and 5)
		Name of Firm: (Include Zip Code)
		Authorized Signature: (Please Type or Print)
		Name:
		Area Code and Telephone Number:
		Dated: , 22 Place medallion guarantee in space below:

	Name(s) of Record Holder(s):
	Number of Shares Tendered:
	Certificate Number(s) (if available):			(please print)
	Address(es):
				(zip code)
	☐ Check if securities will be tendered by book-entry transfer
	Name of Tendering Institution:
	Area Code and Telephone No.(s):
	Signature(s):
	DTC Participant No.:
	Transaction Code No.:
	Dated:

	Name of Firm:
	Address:
				(zip code)

	Area Code and Tel. No.:			(Authorized Signature)
	Name:			(Please type or print)
	Title:
	Dated:

	Number of Shares to be Tendered:			SIGN HERE
	Shares* Account No			Signature(s) Please Print name(s) and address(es) here
	Dated , 2022
	Area Code and Phone Number
	Tax Identification Number or Social Security Number

	*
	Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

Very truly yours,


PHARMAKON ADVISORS, LP


By:	/s/ Pedro Gonzalez de Cosio
	Name:	Pedro Gonzalez de Cosio
	Title:	Chief Executive Officer

COLLEGIUM PHARMACEUTICAL, INC.


By:	/s/ Joseph Ciaffoni
	Name:	Joseph Ciaffoni
	Title:	President and Chief Executive Officer

Borrower:	Collegium Pharmaceutical, Inc., a Virginia corporation (the “*Borrower*”).

Transactions:	The Borrower, intends to acquire (the “*Acquisition”) BioDelivery Sciences International, Inc. (the “Acquired Business”) pursuant to the Acquisition Agreement. The Borrower also intends to obtain financing in the form of senior secured term loans from BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, investment funds managed by Pharmakon Advisors, LP, in an aggregate principal amount equal to up to $650 million. The Borrower intends to use the proceeds of the Term Loan Facility, together with cash on hand, (a) to fund the Acquisition and (b) to pay certain fees and expenses in connection with the Acquisition. In connection with the foregoing transactions, the Borrower intends to repay in full all indebtedness outstanding under that certain Loan Agreement by and among the Borrower, the guarantors from time to time party thereto, the Lenders and BioPharma Credit PLC, as collateral agent, dated as of February 6, 2020, as amended by that certain First Amendment to Loan Agreement, dated as of February 24, 2020, and that certain Second Amendment to Loan Agreement, dated as of May 27, 2020 (collectively, the “Existing Loan Agreement”) and pay any and all associated costs and expenses incurred under the Loan Documents (as such term is defined in the Loan Agreement), other than any amounts payable in connection with such prepayment pursuant to Section 2.2(f) of the Loan Agreement (the “Repayment”). The transactions described in this paragraph are collectively referred to herein as the “Transactions*”.

Guarantors:	All obligations of the Borrower under the Term Loan Facility will be unconditionally guaranteed (the “*Guarantees”) by each existing and subsequently acquired or organized, directly or indirect, material subsidiary of the Borrower (the “Guarantors*”), including, without limitation, each of the subsidiaries of the Borrower which are guarantors under the Existing Loan Agreement.

Collateral Agent:	BioPharma Credit, PLC (in its capacity as collateral agent, but not as a payment agent, the “*Agent*”).

Lenders:	BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, investment funds managed by Pharmakon Advisors, LP (each, a “*Lender” and, collectively, the “Lenders”). Each Lender will be responsible to fund 50.0% of the aggregate principal amount of the Loans (such percentage, the “Applicable Percentage*”).

Amount of Facility:	Senior secured term loans (the “*Loans”) in an aggregate principal amount of up to $650 million (the “Term Loan Facility*”).

Security/Ranking:	The Term Loan Facility and the Guarantees will be secured by a valid and perfected first priority lien on substantially all of the owned assets of the Borrower and each Guarantor, whether owned on the Closing Date or thereafter acquired (collectively, the “*Collateral*”), including, but not limited to: (a) all the material equity interests and debt held by the Borrower or any Guarantor, (b) substantially all owned tangible and intangible assets of the Borrower and each Guarantor (to the extent that the lien on such assets can be perfected through the filing of a financing statement or through entering into a deposit account control agreement and certain other customary exceptions) including, but not limited to, inventory, accounts receivable, equipment, general intangibles, intercompany debt, chattel paper, licenses, permits, intellectual property, documents, instruments, indemnification rights, tax refunds, commercial tort claims, letter of credit rights, hedge agreements, investment property, deposit and securities accounts, wherever located, (c) material owned real property and related fixtures, and (d) all proceeds and products of the foregoing. Notwithstanding the foregoing, the following assets will be excluded from Collateral: (i) all leasehold interests, (ii) all motor vehicles and other assets subject to certificates of title, (iii) any immaterial fee-owned real property and letter of credit rights, (iv) all contracts, licenses and permits to the extent the grant of a security interest therein is prohibited by contract or law, (v) upon the Borrower’s request, any assets with respect to which the Lender reasonably determines that the costs of obtaining are excessive in relation to the value of the security to be afforded thereby to the Lender, (vi) certain deposit accounts, including any zero balance accounts, fiduciary accounts, and any account used for payroll, and (vii) certain other assets which are encumbered by certain permitted liens or are customarily excluded.

Availability:	One drawing to be made under the Term Loan Facility on the Closing Date.

Additional Consideration /Expenses:	1.00% of the aggregate principal amount of the Loans, to be paid by the Borrower on the Closing Date. The Borrower shall pay or reimburse the Lenders and the Agent for: (a) all reasonable and documented costs and expenses incurred in connection with the preparation, negotiation, execution and delivery of the Term Loan Documentation, including the reasonable and documented fees and disbursements of legal counsel and filing and recording fees and expenses; (b) all its documented costs and expenses incurred in connection with any amendment, supplement or modification to, the Term Loan Documentation; and (c) all its documented costs and expenses incurred in connection with the enforcement or preservation of any rights under the Term Loan Documentation, including the reasonable and documented fees and disbursements of legal counsel.

Purpose/Use of Proceeds:	The proceeds of the Term Loan Facility, together with cash on hand, will be used to fund the Transactions.


Maturity Date:	The Loans shall be repaid in full on the date that is 48 months after the Closing Date (the “*Maturity Date*”).

Amortization:	The Borrower will make quarterly payments of principal of the Loans commencing on the first payment date following the Closing Date and continuing on each subsequent payment date, in an amount equal to (a) $25,000,000.01 in each of the first four quarters following the Closing Date, and (b) $45,833,333.33 in each of the remaining 12 quarters thereafter.

Interest Rate:	All amounts outstanding under the Term Loan Facility will bear interest at the LIBOR Rate LIBOR plus 7.50% per annum (the “*Interest Rate*”).

	As used herein, the term “*LIBOR Rate” means the rate per annum equal to USD LIBOR as published on the applicable Bloomberg LIBOR page administered by the ICE Benchmark Administration for Dollars for a period equal in length to three (3) months, and otherwise will have the meaning as is customary and appropriate for term loan financings subject only to a LIBOR Rate “floor” of 1.20%; provided* that the Term Loan Documentation (as defined below) will contain customary “hardwired” LIBOR replacement provisions.

	After the occurrence and during the continuance of any payment or bankruptcy event of default, upon notice from the Agent (whether or not at the direction of the Requisite Lenders (as defined below)), interest on overdue amounts will accrue at a rate equal to the rate then applicable thereto plus an additional 3.00% per annum. Such interest will be payable on demand.

Interest Payments:	Except as set forth below, interest will be payable quarterly in arrears and computed on the basis of actual days elapsed in a 360-day year.

Voluntary Prepayments:	Voluntary prepayment of the borrowings under the Term Loan Facility will be permitted at any time in an amount equal to all, but not less than all, principal amounts outstanding. Voluntary Prepayment must be accompanied by payments of accrued and unpaid interest through the repayment date and any applicable Make-whole Premium and Prepayment Premium.

Mandatory Prepayment:	The Term Loan Facility will be subject to prepayment upon the occurrence of a “Change of Control” (to be defined in a customary manner for Pharmakon facilities to include mergers or consolidations, as a result of which the stockholders of the Company cease to beneficially own a majority of voting stock of the Company, or the sale of all or substantially all consolidated assets) at 100% of the outstanding principal amount thereof, plus accrued and unpaid interest through the repayment date and any applicable Make-whole Premium and Prepayment Premium.

Prepayment Premium:	In connection with any prepayment or maturity of the Loans under the Term Loan Facility prior to the second anniversary of the Closing Date, the Borrower will pay a prepayment premium of 2.00% of the principal amount of the Term Loan Facility prepaid. In connection with any prepayment of the Loans under the Term Loan Facility after the second anniversary of the Closing Date but prior to the fourth anniversary of the Closing Date, the Borrower will pay a prepayment premium of 1.00% of the principal amount of the Term Loan Facility prepaid.

Make-whole Premium:	In connection with any prepayment or maturity of the Loans under the Term Loan Facility prior to the second year anniversary of the Closing Date, the Borrower will pay a make-whole premium in an amount equal to foregone interest through the second year anniversary of the Closing Date.

Documentation:	The definitive financing documentation for the Term Loan Facility (the “*Term Loan Documentation”) shall contain the terms set forth in the Commitment Letter and this Term Sheet and shall otherwise be negotiated in good faith within a reasonable time period to be determined based on the expected Closing Date and substantially consistent with the Existing Loan Agreement (and the other Loan Documents (as such term is defined in the Existing Loan Agreement), as applicable), as modified (i) to accommodate the structure of the Transactions, (ii) to reflect no financial covenants and no limitations on the acquisition or in-licensing of assets, (iii) to take into account the assets, properties, products and operations of the Borrower and its subsidiaries (after giving effect to the Acquisition) in the representations, warranties and covenants, (iv) to reflect changes in law, applicable regulations or accounting standards and (v) to include “hardwired” LIBOR replacement provisions. The principles, modifications and requirements of the immediately preceding sentence are referred to collectively as the “Term Loan Documentation Principles*”. Notwithstanding the foregoing, the only conditions to the availability of the Term Loan Facility on the Closing Date shall be those set forth in clauses (a) – (c) of the first paragraph of Section 4 in the Commitment Letter. Notwithstanding any of the foregoing, the Term Loan Documentation shall contain only those representations and warranties, events of default and covenants as set forth in this Term Sheet.

Representations and Warranties:	The Term Loan Documentation will contain representations and warranties consistent with the Term Loan Documentation Principles and otherwise customary for term loan financings of this kind, including with respect to exceptions and qualifications, subject to thresholds to be agreed upon and in any event that are no less favorable to the Borrower, taken as a whole, than the representations and warranties set forth in the Existing Loan Agreement, including but not limited to: organization, existence and power; authorization; execution and delivery; enforceability; no conflict with charter documents or applicable law; litigation and adverse proceedings; Federal Reserve Margin regulations; OFAC, FCPA, Patriot Act and other similar money laundering or anti-terrorism laws; compliance with health care and data protection laws, the Investment Company Act; solvency of the Borrower and its subsidiaries (on a consolidated basis); no senior indebtedness; and validity, priority and perfection of security interests in the Collateral.

Affirmative Covenants:	The Term Loan Documentation will contain affirmative covenants (but no financial covenants or limitations on the acquisition or in-licensing of assets) by the Borrower (with respect to the Borrower and its subsidiaries) as are usual and customary for term loan financings of this kind and consistent with the Term Loan Documentation Principles, including but not limited to: maintenance of corporate existence and rights; delivery of consolidated financial statements (accompanied, in the case of annual financial statements, by an audit opinion from nationally recognized auditors that is not subject to any qualification as to “going concern” or the scope of such audit) and other information of the Borrower; delivery of notices of default, material litigation, ERISA events and material adverse change; maintenance of properties in good working order; maintenance of books and records; maintenance of customary insurance; compliance with laws; inspection of books and properties; environmental; additional guarantors; additional material real estate assets; newly-formed or acquired material domestic subsidiaries; use of proceeds; and payment of taxes.

Negative Covenants	The Term Loan Documentation will contain negative covenants (but no financial covenants or limitations on the acquisition or in-licensing of assets) by the Borrower (with respect to the Borrower and its subsidiaries) as are usual and customary for term loan financings of this kind and consistent with the Term Loan Documentation Principles, subject to thresholds to be agreed upon (where applicable), including (but not limited) with respect to: limitations on restricted payments, limitations on other indebtedness, limitations on liens and limitations on the sale or other disposition of material assets.

Events of Default:	The Term Loan Documentation will include events of default as are usual and customary for term loan financings of this kind, subject to grace periods and materiality qualifiers in accordance with the Term Loan Documentation Principles, including but not limited to: nonpayment of principal, interest or other amounts; material adverse effect; violation or breach of covenants or agreements in the Term Loan Documentation; breach of or inaccuracy in, in any material respect (or in all respects where qualified by materiality) of representations or warranties in the Term Loan Documentation; cross default and cross acceleration; bankruptcy and similar events; material judgments or orders; ERISA events; actual or asserted invalidity of guarantees or security documents in each case representing a material portion of the Guarantees; material adverse effect; and change of control.

	In the event any Event of Default occurs and is continuing, the Loans under the Term Loan Facility (with accrued interest thereon) and all other amounts owing under the Term Loan Facility will become due and payable, including, without limitation, any applicable Make-whole Premium and Prepayment Premium.

Conditions to Borrowing on the Closing Date:	The availability of the initial borrowings under the Term Loan Facility on the Closing Date will be subject only to the conditions set forth in clauses (a) – (c) of the first paragraph of Section 4 in the Commitment Letter and no other conditions.

Assignments and Participations:	Each of the Lenders will be permitted to assign any or all of its rights and obligations with respect to the Loans under the Term Loan Facility to third parties (other than a competitor of the Borrower, except when an Event of Default has occurred and is continuing) and will be permitted to grant or sell participations in any such rights or obligations to third parties (other than a competitor of the Borrower except when an Event of Default has occurred and is continuing), in each case, without the consent of the Borrower.

Requisite Lenders:	Amendments and waivers will require the approval of Lenders representing more than 50% of the sum of the then-outstanding principal amount of the Loans under the Term Loan Facility (“*Requisite Lenders*”).

Indemnity:	The Term Loan Documentation will provide customary and appropriate provisions relating to indemnity and related matters.

Governing Law and Jurisdiction:	The State of New York. The Term Loan Documentation will provide that the Borrower and the Guarantors will submit to the exclusive jurisdiction and venue of the federal and state courts of the State of New York located in the Borough of Manhattan, the City of New York and will waive any right to trial by jury.

Counsel to the Lenders and Agent:	Akin Gump Strauss Hauer & Feld LLP

COLLEGIUM PHARMACEUTICAL, INC.		BIODELIVERY SCIENCES INTERNATIONAL, INC.

By:	/s/ Jim Vollins	By:	/s/ Shirley Kuhlmann
Name:	Jim Vollins	Name:	Shirley Kuhlmann
Title:	EVP, General Counsel	Title:	General Counsel