Innoviva, Inc. (NasdaqGS:INVA) submitted a non-binding proposal to acquire remaining 40% stake in Entasis Therapeutics Holdings Inc. (NasdaqGM:ETTX) from a group of shareholders for $39 million on February 1, 2022. Innoviva, Inc. entered into a definitive agreement to acquire to acquire remaining 40% stake in Entasis Therapeutics Holdings Inc. from a group of shareholders for $47.9 million on May 23, 2022. Under the terms of the offer, Innoviva, Inc. will pay $1.8 per share. As of May 5, 2022, offer price revised to $2.00 per share. As of May 23, 2022, offer price revised to $2.20 per share. The acquisition consideration values Entasis' equity at $113 million on a fully diluted basis. The proceeds would be paid through Innoviva's cash on hand. Following completion of the merger, Entasis' common stock will cease to be traded on the Nasdaq Global Market.

The proposal is subject to confirmatory diligence including legal, clinical, regulatory, accounting and tax diligence, and is subject to negotiation and execution of a definitive merger agreement. The proposal also contemplates that the acquisition would be conditioned on the independent members of Entasis's Board of Directors (or a committee thereof), represented by independent legal and financial advisors, approving the transaction, and such transaction being approved by holders of a majority of the outstanding shares of the capital stock of Entasis owned or controlled by disinterested stockholders. Neither of these conditions is waivable. The transaction will not be subject to a financing condition. The obligation of Innoviva to purchase Shares validly tendered in the Offer and not validly withdrawn pursuant to the Offer is conditioned upon (1) there being validly tendered and not validly withdrawn Shares that, excluding the Shares beneficially owned by Innoviva, represent at least one more Share than 50% of the Shares not beneficially owned by such persons outstanding at the time of the expiration of the Offer (the “Minimum Condition”). Entasis has engaged a Special Transactions Committee. TPG GP A, LLC, David Meek, Heather Berger, Howard Mayer and David Hastings together own approximately 2.32% of the outstanding Shares of Entasis. This non-binding offer has been approved by the Board of Directors of Innoviva. As of May 23, 2022, the Board of Directors of Entasis has approved the deal. As of June 17, 2022, No Stockholder Approval Required now for the Offer. As of July 7, 2022, as of the expiration of the tender offer, a total of 11,671,662 shares of Entasis' common stock were validly tendered and not withdrawn in the tender offer. Such shares of Entasis' common stock, upon excluding those tendered by Manoussos Perros (the “Entasis CEO”), represent approximately 60.45% of the shares not beneficially owned by Innoviva and its subsidiaries or the Entasis CEO, which satisfied the minimum condition for the tender offer. The transaction is expected to close in the third quarter of 2022. As of July 8, 2022, Innoviva expects the merger to close on July 11, 2022.

Moelis & Company acted as financial advisor and Jared Fertman, Jonathan Kubek and Russell Leaf of Willkie Farr & Gallagher LLP acted as legal advisors for Innoviva, Inc. MTS Health acted as the financial advisor and MTS Securities acted as the fairness opinion provider, and Jack S. Bodner, Matthew C. Franker and Allison B. Schiffman of Covington & Burling LLP acted as the legal advisor to Entasis. As compensation for MTS, Entasis will pay a fee of $500,000 for rendering the fairness opinion and total fee of approximately $2.56 million, including the fee paid by Entasis upon delivery of the MTS Opinion. D.F. King & Co., Inc. acted as information agent to Innoviva and Innisfree M&A Inc. acted as information agent to Entasis.

Innoviva, Inc. (NasdaqGS:INVA) completed the acquisition of the remaining 40% stake in Entasis Therapeutics Holdings Inc. (NasdaqGM:ETTX) from a group of shareholders on July 11, 2022. Innoviva irrevocably accepted for payment all Shares that were validly tendered and not validly withdrawn. As a result of the acquisition, Entasis became a wholly-owned subsidiary of Innoviva. Upon closing, Pavel Raifeld and Marianne Zhen assumed the roles of directors of the Surviving Corporation. All of the conditions of the offer have been satisfied.