CARGO Therapeutics to be acquired by Concentra Biosciences for $4.379 in cash per share.

CARGO Therapeutics has entered into a merger agreement with Concentra Biosciences for $4.379 per share of common stock plus a contingent value right. The CVR will grant shareholders the right to receive excess net cash in excess of $217.5 million and 80% of any net proceeds within two years following closing. The acquisition is expected to close in the third quarter of 2025.

CARGO Therapeutics (NASDAQ: CRGX), a biotechnology company focused on CAR T-cell therapies, has entered into a definitive merger agreement with Concentra Biosciences. Under the agreement, Concentra will acquire CARGO for $4.379 in cash per share plus a contingent value right (CVR). The CVR includes 100% of CARGO's closing net cash exceeding $217.5 million and 80% of net proceeds from any disposition of certain product candidates within two years post-closing. The tender offer will commence by July 21, 2025, requiring at least a majority of shares and minimum cash of $217.5 million at closing. Approximately 17.4% of stockholders have already agreed to tender their shares, with the transaction expected to close in August 2025 [1].

The acquisition offers shareholders fixed value with potential upside through excess cash and asset sales. The CVR structure provides shareholders with immediate guaranteed value while preserving upside potential through two CVR components: 100% of CARGO's closing net cash exceeding $217.5 million and 80% of proceeds from selling certain CARGO product candidates within two years post-closing. The transaction structure indicates CARGO was likely unable to independently realize the full value of its CAR T-cell therapy pipeline, making this deal a strategic exit for shareholders [1].

The relatively modest cash payment suggests Concentra is primarily acquiring CARGO's cash reserves and pipeline assets rather than an established commercial business with predictable revenue streams. The deal includes a minimum cash threshold of $217.5 million, highlighting Concentra's focus on securing CARGO's cash position. Concentra has structured the transaction to give CARGO shareholders participation in any cash above this threshold, effectively pricing the biotech assets separately through the CVR mechanism [1].

Notably, 17.4% of CARGO's shareholders have already committed to tendering their shares, providing strong initial support for the transaction. The board's unanimous approval after a strategic review process suggests this outcome represents the best available option for CARGO shareholders after exploring alternatives. The expected August 2025 closing indicates limited regulatory hurdles are anticipated [1].

The CVR structure is particularly relevant for biotechnology acquisitions where pipeline assets have uncertain future value—providing a mechanism for shareholders to participate in potential upside while giving the acquirer protection against overpaying for unproven assets. However, shareholders should note that CVRs depend entirely on Concentra's execution post-acquisition, with no guarantees of additional payments beyond the base cash consideration [1].

The merger transaction is expected to close in the third quarter of 2025. Advisors TD Cowen is acting as exclusive financial advisor to CARGO, and Latham & Watkins LLP is acting as legal counsel to CARGO. Gibson, Dunn & Crutcher LLP is acting as legal counsel to Concentra [1].

References:
[1] https://www.stocktitan.net/news/CRGX/cargo-therapeutics-enters-into-agreement-to-be-acquired-by-concentra-7tk2ji3qjl2v.html