XML 22 R10.htm IDEA: XBRL DOCUMENT v3.25.2
Business Combinations, Asset Acquisitions, and Joint Venture Formation
 6 Months Ended
Jun. 27, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Mergers, Acquisitions and Dispositions Disclosures
3.Business Combination and Divestiture
Business Combination with Endo
On March 13, 2025, the Company entered into a Transaction Agreement (as amended on April 23, 2025) (“Transaction Agreement”), with Endo, a Delaware corporation, which has been converted into Endo LP, a Delaware limited partnership, and Salvare Merger Sub LLC, a Delaware limited liability company and the Company’s wholly owned subsidiary (“Merger Sub”). On July 31, 2025, the Company completed the Business Combination, whereby the Company acquired all of the issued and outstanding shares of common stock of Endo from Endo in exchange for a combination of cash and the Company’s ordinary shares in accordance with the Transaction Agreement. Outstanding shares of common stock of Endo were cancelled and converted into the right to receive approximately $1.31 in cash (“Per Share Cash Consideration”) and 0.2575 of a Mallinckrodt ordinary share (“Per Share Stock Consideration,”), without interest and subject to applicable withholding.
The Company acquired Endo by means of the merger of Merger Sub with and into Endo, with Endo continuing as the surviving entity in the merger and a wholly-owned subsidiary of Mallinckrodt (“Business Combination”). On July 31, 2025, prior to the completion of the Business Combination, the memorandum and articles of association of the Company were amended by means of a scheme of arrangement (“Scheme”) under the Companies Act 2014 of Ireland (as amended) and certain other amendments that had been previously approved by the Company’s shareholders (the “constitution amendment,” and, together with the Scheme and the Business Combination, the “Transactions”).
Refer to Note 16 for further information on the Business Combination.
Mallinckrodt is the acquiring entity for accounting purposes. In identifying the Company as the acquiring entity for accounting purposes, management took into account the voting rights of all equity instruments, the composition of the corporate governing body and senior management, the size of each of the companies, and the terms of the exchange of equity interests.
The preliminary consideration is calculated as follows (dollar amounts in millions except exchange ratio and share price):
Endo common shares outstanding as of July 31, 2025
76,313,462
Per Share Stock Consideration0.2575
Mallinckrodt ordinary shares issued in exchange19,650,663 
Mallinckrodt closing stock price (1)
$92.30 
Preliminary estimated fair value of Mallinckrodt ordinary shares issued$1,813.8 
Other cash consideration (2)
0.0
Payment to Endo stockholders100.0 
Other merger consideration attributable to Endo stock-based awards7.1 
Obligation to cash settle shares underlying certain Endo stock-based awards2.4 
Total preliminary consideration
$1,923.3 
(1)Mallinckrodt is not listed on a national securities exchange or quoted on the automated quotation system of a national securities association, and as such, used a preliminary fair value per ordinary share as of July 31, 2025 in accordance with U.S. Internal Revenue Service Section 409A to determine preliminary fair value of consideration transferred. Due to the timing of the acquisition, the preliminary 409A is subject to change.
(2)Other cash consideration represents less than $0.1 million of aggregate cash payments to Endo stockholders in lieu of any fractional shares.
The Business Combination will result in increased product diversity in the Company’s branded business and enhanced capabilities to develop, manufacture, market and distribute pharmaceutical products and therapies. As a result of the Business Combination, the Company consists of multiple wholly owned subsidiaries that operate in two businesses. The brands business is focused on autoimmune and rare diseases in areas including endocrinology, gastroenterology, hepatology, neonatal respiratory critical care, nephrology, neurology, pulmonology, ophthalmology, orthopedics, rheumatology, and urology. The other businesses are focused generic drugs, sterile injectables, and active pharmaceutical ingredients. Because the closing of the Business Combination occurred on July 31, 2025, subsequent to the periods presented in this Quarterly Report, the results of operations of Endo are not included in the unaudited condensed consolidated statements of operations for the three and six months ended June 27, 2025. Due to the timing of the Business Combination, the initial accounting for the Business Combination is not yet complete. As such, the Company is not able to disclose certain information relating to the acquisition, including the preliminary fair value of assets acquired and liabilities assumed and pro forma results of operations.
Transaction expenses associated with the Business Combination are included in combination, integration, and other related expenses in the unaudited condensed consolidated statements of operations. During the three and six months ended June 27, 2025, the Company recorded $22.6 million and $43.1 million, respectively, of legal, financial, and other advisory and consulting expenses, which primarily relate to shareholder matters, integration planning, and regulatory costs associated with the Business Combination.

Planned Separation
The Company intends to separate the historical “Specialty Generics” reporting segment of Mallinckrodt and the historical “Generic Pharmaceuticals” and “Sterile Injectables” reporting segments of Endo (“Separation”). The Company currently anticipates consummating the Separation in the fourth quarter of 2025; however, no assurance can be given as to the timing of the Separation, or that the Separation will occur at all, as the Separation is subject to approval by the Mallinckrodt Board of Directors (“Board”) and other conditions.
During the three and six months ended June 27, 2025, the Company recorded $2.2 million and $3.6 million, respectively, related to the Separation within liabilities management and separation costs on the unaudited condensed consolidated statements of operations. During the three and six months ended June 28, 2024, the Company recorded $10.3 million and $17.0 million, respectively, related to the potential sales of non-core assets within liabilities management and separation costs on the unaudited condensed consolidated statements of operations.
Therakos Divestiture
On November 29, 2024, the Company completed the sale of the Therakos business to affiliates of CVC Capital Partners IX (“Therakos Divestiture”) for total cash consideration of $887.6 million, which was net of preliminary purchase price adjustments, including an adjustment based on estimated net working capital at close. The Company paid $6.2 million for the final working capital settlement during the six months ended June 27, 2025. As a result, the total cash consideration was $881.4 million, net of the final working capital settlement.
On December 6, 2024, the Company used the proceeds from the Therakos Divestiture to mandatorily prepay the First-Out Takeback Term Loan in full, partially prepay the Second-Out Takeback Term Loan, and partially redeem the Takeback Notes, which are each defined and further described in Note 11.
The Therakos business did not qualify as discontinued operations as it did not represent a strategic shift that would have a major effect on the Company’s operations and financial results. The financial results of the Therakos business reported within the Specialty Brands segment, are included in three and six months ended June 28, 2024.
Transition Services Agreement
In connection with the Therakos Divestiture, the Company entered into a transition services agreement (“TSA”) effective upon closing to provide certain business support services generally for up to 18 months after the closing date or a longer period for certain services. These services include, but are not limited to, information technology, procurement, distribution, logistics and order to delivery, compliance, accounting, finance, and administrative activities. Revenue associated with the TSA is recorded within other income (expense), net, and expenses associated with servicing the TSA are recorded within their natural expense classification, respectively, on the unaudited condensed consolidated statement of operations. During the three and six months ended June 27, 2025 net revenue under the TSA were $2.2 million and $5.2 million, respectively. There was no comparable TSA net revenue during the three and six months ended June 28, 2024.
Transaction Incentive Plan
On February 2, 2024, the Board adopted a Transaction Incentive Plan (as amended on August 4, 2024 and December 2, 2024, the “A&R TrIP”), which is intended to compensate designated Mallinckrodt executive officers and directors with bonus payments to be made upon the consummation of qualifying strategic transactions and dispositions (each, a “Qualifying Transaction”). Each bonus payment earned under the A&R TrIP will be generally delivered 50% in connection with closing of the applicable Qualifying Transaction and 50% on the earlier of (a) December 31, 2026 or a qualifying significant event, as defined in the A&R TrIP, and (b) a significant asset transaction, as defined in the A&R TrIP (“Final Payment Date”); provided, however that in the event that a Qualifying Transaction closes following a qualifying significant event or significant asset transaction, 100% of the applicable bonus payment earned with respect to such Qualifying Transaction generally will be paid in connection with closing of such Qualifying Transaction or, if later, when the associated proceeds are received. The Therakos Divestiture qualified as a Qualifying Transaction and the Business Combination qualified as a Qualifying Transaction and a qualifying significant event under the A&R TrIP. The Final Payment Date was accelerated upon closing of the Business Combination from December 31, 2026 to within 30 days of the closing of the Business Combination, which occurred on July 31, 2025.
Business Combination A&R TrIP
The Company expects to make payments related to the Business Combination of $93.9 million to participants in the A&R TrIP within 30 days of July 31, 2025. As the Business Combination was not considered probable until it closed, the Company did not record any expense related to the A&R TrIP payments associated with the Business Combination during the three and six months ended June 27, 2025.
Therakos A&R TrIP
During the three and six months ended June 27, 2025, the Company recognized $1.7 million and $3.4 million in expense related to the A&R TrIP payments associated with the Therakos Divestiture, respectively, which were recorded within selling, general and administrative (“SG&A”) expenses on the unaudited condensed consolidated statement of operations. There was no comparable expense accrued related to the A&R TrIP during the three and six months ended June 28, 2024. The Company accrued $6.1 million and $2.7 million within accrued payroll and payroll-related costs in the unaudited condensed consolidated balance sheet as of June 27, 2025 and December 27, 2024, respectively.
The Company expects to make payments for the second 50% installment of the A&R TrIP related to the Therakos Divestiture of approximately $14.6 million to participants in the A&R TrIP within 30 days of July 31, 2025. Prior to the closing of the Business Combination, the Company expected to make payments to participants of approximately $16.4 million, which assumed the Final Payment Date would be December 31, 2026.