Lifecore Biomedical to be taken private in up to $663.7 million Webster Equity Partners deal

Lifecore Biomedical, a Minnesota-based maker of sterile injectable drugs and pharmaceutical-grade hyaluronic acid, has agreed to be taken private by the healthcare-focused private equity firm Webster Equity Partners in a deal valued at up to $663.7 million, the companies said Monday. The agreement caps three years of financial strain, activist pressure and on-and-off sale talks for a company that supplies contract manufacturing to some of the biopharmaceutical industry's biggest names.

Under the terms disclosed in a joint press release filed with securities regulators, Lifecore common stockholders will receive $6.28 in cash per share at closing, plus one non-tradable contingent value right entitling them to further payments if the business hits specific performance targets over the next several years. The cash price alone represents a roughly 49.5 percent premium to Lifecore's closing stock price on September 25, the last full trading day before the deal was signed.

The numbers

The headline $663.7 million figure is a ceiling, not a guarantee. It assumes Lifecore fully achieves a series of revenue and profitability milestones tied to the contingent value rights, which could pay out up to $160 million in the aggregate, or as much as $3.39 per CVR. According to the deal terms in the regulatory filing, those milestones escalate over three years: a $30 million payout tied to 2028 revenue targets of $120 million outside the company's relationship with eyecare giant Alcon plus $54 million from Alcon; a $45 million payout tied to 2029 revenue targets; and an $85 million payout in 2030 contingent on consolidated adjusted earnings of $120 million. Combined with the upfront cash, stockholders could theoretically collect up to $9.67 per share — a 130 percent premium — if every target is hit.

Holders of Lifecore's Series A convertible preferred stock, issued in a 2023 rescue financing, will be cashed out separately at their "conversion amount," equal to roughly $6.53 per common-equivalent share as of June 30, plus their own CVRs. Lifecore shares, which have traded between roughly $3.63 and $8.98 over the past year, jumped more than 50 percent Monday to trade above $6.50 — and, notably, above the $6.28 cash portion of the offer, a sign investors think the deal's 30-day "go-shop" window, which runs through October 28, could yet produce a higher bid. Webster is funding the purchase with roughly $400 million of its own equity plus about $180 million in debt financing from MidCap Financial Trust, MSD Partners and Alcon, according to a merger-agreement filing describing the deal's structure, which also sets termination fees of between roughly $7.5 million and $16.2 million depending on how the agreement is unwound.

How we got here

Lifecore's path to a sale began well before Monday's announcement. The company, formerly known as Landec Corporation before renaming itself in November 2022, first disclosed "substantial doubt" about its ability to continue as a going concern in 2023 after revenue declined and losses mounted. That warning triggered a rescue: a $38.75 million private placement of convertible preferred stock led by activist investors Legion Partners Asset Management and Wynnefield Capital, who in exchange won board seats and launched a formal review of strategic alternatives, including a possible sale, that dragged on for roughly a year before concluding in 2024 with a management shakeup rather than a deal — Paul Josephs, a 30-year pharmaceutical industry veteran, was installed as chief executive that May.

The losses did not stop immediately. Lifecore posted a net loss of $38.7 million for the fiscal year ended in late May 2025, though the company has since narrowed losses on a quarterly basis. Throughout, Lifecore continued to build out sterile fill-finish capacity for injectable drugs in syringes, vials and cartridges — a niche that has become increasingly valuable as biopharmaceutical companies outsource complex manufacturing rather than build it themselves. That capacity, and the company's four-decade-old hyaluronic acid business used in eye and joint treatments, appears to be what ultimately attracted Webster Equity Partners.

Who is affected

Lifecore employs roughly 450 people across facilities in Chaska and Chanhassan, Minnesota, and the company says its headquarters will remain there after the deal closes. For its roughly 450 employees and for the biopharmaceutical clients that depend on it for outsourced manufacturing — including Alcon, which is also providing debt financing for the transaction alongside MidCap Financial Trust and MSD Partners — the immediate operational impact is expected to be limited, since the business will continue operating largely as-is, only without public shareholders or Nasdaq's disclosure requirements.

For Lifecore's public shareholders, the calculus is more immediate: many longtime holders, including Legion Partners and Wynnefield Capital, have already signed voting and support agreements committing to back the deal, locking in a resolution after years of uncertainty even as some investors bet a competing bidder emerges during the go-shop period. Employees, meanwhile, were briefed the same day: Josephs told staff in an internal memo filed alongside the deal to keep operations running normally and stay focused on customers through the transition, and the memo noted that outstanding stock options, restricted stock units and performance stock units would convert into cash or CVR consideration under the merger terms.

"We believe that Webster Equity Partners shares our vision for maximizing Lifecore's business and will provide additional resources and expertise to accelerate growth," said Paul Josephs, Lifecore's president and chief executive.

Reaction and what happens next

Webster Equity Partners framed the deal as a growth bet rather than a rescue. "Our team is very excited to partner with Lifecore and pair resources with their CDMO expertise as we pursue organizational excellence," said Matthew Beer, a partner at the firm, in the same release. Lifecore's board, advised by Bourne Capital Partners as exclusive mergers-and-acquisitions adviser and Craig-Hallum Capital Group as financial adviser to its transaction committee, unanimously recommended the deal to shareholders.

• Upfront cash consideration: $6.28 per common share, a 49.5% premium
• Potential total value with contingent payments: up to $9.67 per share
• Total deal value at maximum payout: up to $663.7 million
• Go-shop period during which Lifecore can seek other bids: 30 days, through October 28

The transaction still needs approval from Lifecore stockholders and antitrust and other regulatory clearances. The companies say they expect to close by the end of the fourth quarter of 2026, though the merger agreement's outside date — the contractual deadline before either side can walk away — stretches as far as September 2027 if antitrust review is still pending. Until closing, the go-shop provision means Lifecore's board is free to solicit and consider competing offers, and deal-tracking site InsideArbitrage noted that the debt piece of the financing is being arranged in part by Alcon itself, underscoring how closely the buyout is tied to Lifecore's largest customer. Trade-press coverage of the announcement has so far focused on Lifecore's growing sterile-injectable business as the deal's core rationale. If no higher offer materializes and the deal closes as structured, Lifecore will exit public markets roughly four years after its rebrand from Landec, ending a turbulent stretch that included a going-concern warning, an activist-driven capital raise and a management overhaul before finally landing a buyer.