Aralez Pharmaceuticals and its subsidiary Aralez Pharmaceuticals Canada began voluntary restructuring proceedings under Canada’s Companies’ Creditor Arrangement Act in the Ontario Superior Court of Justice. Conurrently, the company’s U.S. and Ireland-based subsidiaries, as well as its Canadian debtors, filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York.

The company intends to enter into agreements with two separate stalking-horse purchasers to sell its main operating businesses: an agreement to sell its VIMOVO royalties and Canadian operations to Nuvo Pharmaceuticals in a transaction valued at $110 million and an agreement to sell its TOPROL-XL Franchise to its secured lender, certain funds managed by Deerfield Management, in a transaction valued at$140 million. The company is also engaged in ongoing efforts to sell its remaining assets and intends to wind down its operations following the consummation of the sales.

“Following a thorough financial and strategic review, we believe that these sales, together with an auction process under court supervision are in the best interests of the company and its stakeholders,” said Adrian Adams, CEO of Aralez.

Aralez has obtained commitments for approximately $15 million in DIP financing from Deerfield Management, which is subject to approval of the courts. The company intends to use the proceeds from the financing, in addition to cash flow from operations, to pay for all goods and services from vendors provided after the CCAA and Chapter 11 filing dates in accordance with their current terms. The company and its subsidiaries have filed a number of customary pleadings seeking authorization from the courts to pay certain pre-petition obligations, support their business operations and transition them through the restructuring proceedings and the sale process. These include the payment of employee wages, salaries and benefits and certain obligations to vendors.

The sales and restructuring proceedings are the culmination of a previously announced financial and strategic review undertaken by the board of directors of the company.

Aralez is being advised by Moelis & Company and Alvarez & Marsal as its financial advisors and Willkie Farr & Gallagher and Stikeman Elliott as its U.S. and Canadian legal counsels, respectively.