Forest Labs to Acquire Aptalis for $2.9B
Forest Laboratories, Inc. today announced that it has entered into a definitive agreement to acquire Aptalis, a privately held U.S. based specialty Gastrointestinal (GI) and Cystic Fibrosis company, for $2.9 billion in cash from its shareholders, including TPG, the global private investment firm. The acquisition, which requires review by anti-trust authorities in the US and Canada, is expected to be accretive to Forest’s FY2015 non-GAAP EPS.
“Aptalis is an excellent strategic and financial fit for Forest because of its strong product offerings in two therapeutic franchises that are complementary to Forest - GI in the U.S. and Canada and Cystic Fibrosis in Europe. The acquisition of Aptalis helps diversify Forest while advancing our strategy to create blockbuster therapeutic areas,” said Brent Saunders, Chief Executive Officer and President of Forest Laboratories, Inc. “Because there is such a strong fit, we expect to grow the sales of products from both Forest and Aptalis while realizing $125 million in cost synergies from combining the two companies. As a result, the acquisition is expected to add nearly $700 million in revenue and approximately $0.78 to our non-GAAP EPS in FY2015.”
Aptalis had sales of $688 million in FY2013 which ended September 2013. Sales of the top three products in the U.S. - Canasa, Carafate, and Zenpep - accounted for more than 60% of company sales in FY2013. International sales accounted for approximately 15% of revenues. Aptalis Pharmaceutical Technologies, a third party delivery technology provider and drug manufacturer, accounted for approximately 15% of revenues.
“Aptalis has built a strong position in the North American and European gastroenterology and cystic fibrosis markets through internal product development and acquisitions of products and companies over the last few years,” said Frank Verwiel MD, Chief Executive Officer of Aptalis. “I’m proud of all that our team has accomplished, and Forest’s acquisition of our company is a testament to the value we have created and the strength of the business we have built. There is a strong business fit between Aptalis and Forest, our strategies are closely aligned, and I am confident that Forest will maximize the opportunity for our products and patients.”
Forest intends to acquire Aptalis from its shareholders for $2.9 billion in cash. Forest expects to use a combination of cash on hand and debt to fund the transaction. Forest has secured commitment for a $1.9 billion bridge facility.
As a result of the Aptalis acquisition, Forest has not yet initiated its previously announced accelerated share repurchase program. Following completion of the permanent financing for the acquisition, Forest will consider initiating the accelerated share repurchase program.
The transaction is expected to close in the first half of 2014 pending regulatory review and satisfactory completion of necessary closing conditions.