SCOTTSDALE, Ariz. (AP) -- Matrixx Initiatives Inc. said Tuesday it will pay $15.5 million to settle lawsuits over its Zicam Cold Remedy, and it has reached an agreement to be acquired for about $75.2 million by funds managed by the investment firm H.I.G. Capital LLC.
Shares of the Scottsdale, Ariz., company jumped $2.86, or 56 percent, to $7.98 in morning trading.
Matrixx said about 1,014 plaintiffs and 1,127 claimants who allege loss of smell or taste from using the cold remedy and other products will be eligible to participate in the program. Matrixx withdrew Zicam cold remedy nasal products from the market in June 2009 after the Food and Drug Administration told consumers they should stop using the nasal gel and related products because they can permanently damage the sense of smell.
Matrixx also said Tuesday its board unanimously approved an agreement under which H.I.G. affiliates will pay $8 each for its shares in a tender offer that starts Dec. 22. That per-share price represents a 56 percent premium to the company's Dec. 13 closing price, the last full trading day before the deal was announced.
If the tender offer is completed, remaining Matrixx shares will be converted into the right to receive the same per-share price paid in the tender offer. Matrixx also will seek acquisition proposals from third parties.