Royalty Pharma plc announced on January 10, 2025, two major initiatives aimed at enhancing shareholder value: the planned acquisition of its external manager, RP Management, LLC, and the approval of a new $3 billion share repurchase program. The internalization transaction is valued at approximately $1.1 billion, based on the closing stock price of $26.20 on January 8, 2025.
The acquisition consideration includes approximately 24.5 million shares of Royalty Pharma equity, which will vest over five to nine years, approximately $100 million in cash, and the assumption of $380 million of existing Manager debt. This move is projected to generate substantial financial benefits, with cumulative cash savings expected to exceed $1.6 billion over the next ten years, and annual cash savings of over $100 million in 2026, growing to more than $175 million by 2030.
The new $3 billion share repurchase program replaces the unused $465 million from the company's original $1.0 billion program. Royalty Pharma intends to repurchase $2 billion of shares in 2025, subject to market conditions, reflecting confidence in its intrinsic value. The internalization is expected to simplify the corporate structure, enhance shareholder alignment, improve governance, and ensure management continuity, with the transaction anticipated to close in the second quarter of 2025, pending shareholder and regulatory approvals.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.