Madison Dearborn’s Ikaria to be acquired by Mallinckrodt

Hampton, New Jersey-based Ikaria is owned by a group of investors led by private equity firm Madison Dearborn Partners LLC.

Shares of Mallinckrodt, a seller of generics, specialty drugs and medical imaging agents, were up 5 percent at $122 in premarket trading.

Ikaria’s INOmax device delivers nitric oxide to children suffering from a type of respiratory failure.

The company is also testing the drug-device combination for treating breathing difficulties such as chronic obstructive pulmonary disease and a type of high blood pressure that affects arteries in the lungs and in the heart.

The deal expands Mallinckrodt’s offering to critical care respiratory therapies in intensive infant care units from its current presence in diagnostic radiology and pain management in surgical specialties, the company said on Thursday.

Mallinckrodt expects the acquisition to add at least $150 million to its sales and 25 cents to earnings per share for the year ending September. The company plans to fund the deal with a combination of cash on hand and debt.

The deal comes a year after Mallinckrodt bought Questcor Pharmaceuticals Inc for $5.2 billion nearly a year ago.

Goldman Sachs is Mallinckrodt’s financial adviser, and Wachtell Lipton Rosen & Katz and Arthur Cox in Ireland its legal advisers. Ikaria Inc’s legal adviser is Kirkland & Ellis LLP.

(Reporting by Vidya L Nathan in Bengaluru; Editing by Joyjeet Das; Additional editing by Lawrence Aragon for Buyouts)