Nestlé has reached a deal to buy biopharmaceutical company Aimmune Therapeutics for $34.50 per share in cash, a 174% premium to Aimmune’s closing price on August 28.

Nestlé already owns a 25.6% stake in the company.

Nestlé Health chief executive officer Greg Behar said Nestlé’s prior investment means it is making a cash payment of just under $2 billion.

The companies said the deal represents an enterprise value of $2.6 billion.

Aimmune is the maker of Palforzia, the first peanut allergy treatment approved for use in the U.S. Peanut allergies affect an estimated 1.6 million young people in the U.S. alone.

“Delivering Palforzia, the world’s first treatment for food allergy, is a game-changing proposition in the biopharmaceutical industry and is transformative for the lives of millions of people living with potentially life-threatening peanut allergy,” Aimmune CEO Jayson Dallas said in a statement.

The company has seen its share price slump this year as its rollout of Palforzia, approved by the FDA in January, was hurt by the COVID-19 crisis.

“As pandemic-related disruption recedes and Palforzia’s true demand begins to manifest, it will be deemed that Nestlé got itself a bargain here,” Piper Sandler analyst Christopher Raymond said.

Sandler said the COVID-19 crisis “essentially killed the launch of Palforzia.”

“Together, we will be able to create a world leader in food allergy prevention and treatment and offer a wide range of solutions that can transform the lives of people around the world living with food allergies,” Behar said.

Nestlé is financing the deal with cash on hand. It said the deal will be accretive to its organic growth in 2021 and add to its earnings in 2022 and 2023.

The company’s share price was up more than 170% in early afternoon trading Monday.

The transaction is expected to close in the fourth quarter of 2020.

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