Oaktree II (NYSE:OACB) announced this afternoon it has 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 is 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 expect 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.
While it has become increasingly popular for SPACs to de-risk their completion votes by backstopping shares and expanding PIPEs to ensure minimum cash provisions are reached in a climate of high redemptions, today’s announcement does not appear to be the case with Oaktree and Alvotech. This combination was only just announced a little more than one month ago on December 7, 2021. So rather than a PIPE done immediately ahead of a vote, this was upsized before the parties have even had a chance to file their preliminary proxy statement.
Nonetheless, this deal does have a minimum closing condition of $300 million and after today’s PIPE increase that only covers a little more than half the trust size. The transaction is expected to close in the first half of 2022, and the combined company’s securities are expected to be traded on the NASDAQ under the symbol “ALVO”.
Oaktree II announced its $2.25 billion combination with Alvotech on December 7. 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.


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