Irish pharmaceutical firm Mallinckrodt has entered into a definitive agreement to acquire US-based biopharmaceutical company Cadence for $1.3bn to strengthen its specialty drugs portfolio.

Subject to customary terms and conditions, the deal is expected to be complete by mid or late-March.

Under the deal, Mallinckrodt’s subsidiary will start a tender offer to acquire all the outstanding shares of Cadence for $14 per share in cash.

Cadence is best known for its pain drug Ofirmev (acetaminophen injection), a proprietary intravenous formulation of acetaminophen.

Ofirmev is intended for the management of mild to moderate pain, the management of moderate to severe pain with adjunctive opioid analgesics and the reduction of fever.

"Mallinckrodt’s subsidiary will start a tender offer to acquire all the outstanding shares of Cadence for $14 per share in cash."

The drug is currently on formulary in more than 2,350 US hospitals and has been used to treat an estimated six to seven million patients since its launch in January 2011.

A new drug submission for the product has also been approved by Health Canada.

Mallinckrodt chief executive officer and president Mark Trudeau said: "Ofirmev’s growth is driven by an expanding base of physicians who are prescribing the product for an increasing number of surgical patients, and we believe the product will be an outstanding addition to the brands component of Mallinckrodt’s specialty pharmaceutical segment.

"We believe Mallinckrodt is well-positioned to further accelerate the trajectory of OFIRMEV and realise the full value of this product in the marketplace."

Mallinckrodt hopes the acquisition of Cadence, which has established a strong presence in the hospital market, will help it expand its reach in the segment.

The acquisition is expected to be immediately accretive to Mallinckrodt’s fiscal year 2014 adjusted diluted earnings per share, as well as significantly accretive to its fiscal year 2015 adjusted diluted earnings per share.

Cadence president and chief executive officer Ted Schroeder said: "We believe Mallinckrodt is a natural fit to provide the resources and expertise that can expand patient access for Ofirmev.

"Additionally, this transaction will provide Cadence shareholders with a strong return on their investment."

In order to complete the deal, Mallinckrodt has entered into debt financing commitments with affiliates of Deutsche Bank Securities and the financing will be a senior secured term loan facility.

In the transaction, Deutsche Bank Securities is the financial advisor for Mallinckrodt and its legal advisors include Wachtell, Lipton, Rosen & Katz in the US and Arthur Cox in Ireland.

Cadence’s financial advisors in the deal are Lazard and Centerview Partners and its legal advisor is Latham & Watkins.

Following the successful completion of the tender offer, Cadence Pharmaceuticals will merge with a subsidiary of Mallinckrodt and become a wholly-owned subsidiary of Mallinckrodt and its shares will be delisted from NASDAQ.