Mallinckrodt PLC (NYSE:MNK) announced plans to acquire Questcor Pharmaceuticals Inc (NASDAQ:QCOR) for approximately $5.2 billion in cash and stock. Today’s soaring share price is likely putting the hurt on Whitney Tilson, who revealed his short of Questcor in December.

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Shares of Mallinckrodt also rose in premarket trading this morning, climbing more than 7%.

Mallinckrodt looks to expand with Questor buy

By purchasing Questcor Pharmaceuticals Inc (NASDAQ:QCOR), Mallinckrodt PLC (NYSE:MNK) will gain Questor’s injectable drug Acthar, a gel which the Food and Drug Administration has approved for 19 different conditions. Many of those conditions are related to inflammatory and autoimmune diseases.

Acthar sales increased 50% in 2013 to $861.3 million. The drug is Questcor Pharmaceuticals Inc (NASDAQ:QCOR)’s biggest product.

Details of the deal

Under the terms of the agreement, Questcor Pharmaceuticals Inc (NASDAQ:QCOR) shareholders will receive $30 per share in cash plus .897 shares of Mallinckrodt PLC (NYSE:MNK) for every Questcor share they hold. This values the deal at about $86.10 a share, which is a 27% premium to Questcor’s closing price on Friday.

The two companies expect the deal to close in the third quarter of the year. After the closure, shareholders of Mallinckrodt PLC (NYSE:MNK) will hold a 50.5% stake in the merged company, with the rest being owned by current Questcor Pharmaceuticals Inc (NASDAQ:QCOR) shareholders.

Tilson loses big on Questcor

Because of today’s soaring share price on Questcor Pharmaceuticals Inc (NASDAQ:QCOR), well-known short-seller Whitney Tilson is probably losing big on his short position, if it is still open, which is likely. In the second half of December, he disclosed a new short in Questcore via an email he sent to ValueWalk.

At that time, Tilson said he believed Questcor Pharmaceuticals Inc (NASDAQ:QCOR) was “a scam of epic proptions.” He questioned how shares of Questcore rose 158 times in six years. Tilson said it was all because Questcore raised the price of Acthar, a drug that he said is more than 60 years old and that Questcor acquired for $100,000. The company reportedly raised the price of the drug from $40 a vial up to over $28,000 a vial—an increase of 700 times.

Questcore to operate separately

According to MarketWatch, Questcor Pharmaceuticals Inc (NASDAQ:QCOR) will be under Mallinckrodt PLC (NYSE:MNK)’s specialty drugs division and will operate separately. Mark Trudeau, President and CEO of Mallinckrodt, will head up the merged company. Mallinckrodt said it will had some of Questcor’s executives to its leadership team.