Strategically complementary combination to
enhance and diversify Fresenius Kabi’s business and portfolio
At $34.00 a share, transaction valued at
approximately $4.3 billion, plus the assumption of debt
Transaction expected to close by early 2018
Fresenius Kabi has agreed to acquire Akorn (NASDAQ: AKRX), a
U.S.-based manufacturer and marketer of prescription and
over-the-counter pharmaceutical products, for approximately $4.3
billion, or $34.00 a share, plus the assumption of approximately
$450 million of debt1. The transaction is expected to close by
early 2018 and to be accretive in 2018 to Fresenius Group net
income and EPS, excluding integration costs.
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The agreement and transaction have been approved by the boards
of both companies and will be recommended by Akorn’s board to its
shareholders. Akorn’s largest shareholder has committed to
supporting the transaction. The transaction is subject to approval
by Akorn shareholders and other customary closing conditions,
including regulatory review under the Hart-Scott-Rodino Antitrust
Improvements Act.
“Joining our two companies and product portfolios will
strengthen and diversify both businesses,” said John Ducker,
president and CEO of Fresenius Kabi USA. “Akorn brings to Fresenius
Kabi specialized expertise in development, manufacturing and
marketing of alternate dosage forms, as well as access to new
customer segments like retail, ophthalmology and veterinary
practices. Its pipeline is also impressive, with approximately 85
ANDAs filed and pending with the FDA and dozens more in
development.”
“Fresenius Kabi is an excellent fit for Akorn, strategically and
culturally,” said Raj Rai, Akorn’s Chief Executive Officer.
“Fresenius brings to Akorn the strength and resources of a global
leader with an experienced U.S. team and an outstanding record of
growth and award-winning service in the United States. We look
forward to working with Fresenius Kabi on this next phase of our
growth. When the transaction closes, we will strive to ensure a
smooth transition for our employees and customers.”
Akorn also announced today that based on a preliminary review of
Q1 results, it is reaffirming its previously announced 2017
guidance, excluding any one-time costs related to the transaction
with Fresenius Kabi.
Fresenius Kabi specializes in sterile injectable medicines.
Akorn produces a diverse portfolio comprising sterile ophthalmics,
topical creams, ointments and gels, oral liquids, otic solutions
(for the ear), nasal sprays and respiratory drugs in addition to
sterile injectables, which made up just 35% of Akorn sales last
year.
Akorn products are sold in retail pharmacies (prescription and
over-the-counter) and directly to physician and veterinary
distributors, in addition to hospitals and clinics – virtually all
in North America. Fresenius Kabi is a global health care company
with a worldwide network for pharmaceutical and medical devices
R&D, manufacturing, sourcing, sales and supply chain that will
be a valuable resource to grow Akorn’s portfolio in the U.S. and
abroad.
The U.S. headquarters for Akorn and Fresenius Kabi are both in
Northern Illinois, located in close proximity. Akorn employs more
than 2,000 people worldwide. Fresenius Kabi employs more than
30,000 worldwide.
Fresenius Kabi has a successful track record of growing
pharmaceutical acquisitions in the United States. Fresenius Kabi
acquired APP Pharmaceuticals in 2008 and has more than tripled its
sales to nearly $2 billion. The company acquired the Simplist™ line
of prefilled syringes from BD last year and has already doubled the
sales of this portfolio.
Fresenius Kabi’s financial advisers for the transaction were
Credit Suisse and Moelis, with Allen & Overy acting as its
primary legal adviser. J.P. Morgan Securities LLC served as Akorn’s
financial adviser, and Cravath, Swaine & Moore LLP and
Polsinelli PC served as its legal advisers.
About Fresenius Kabi and the Fresenius Group
Fresenius Kabi (www.fresenius-kabi.us) is a global health care
company that specializes in medicines and technologies for
infusion, transfusion and clinical nutrition. The company’s
products and services are used to help care for critically and
chronically ill patients. The company’s U.S. headquarters is in
Lake Zurich, Illinois. The company’s global headquarters is in Bad
Homburg, Germany. Fresenius Kabi is part of Fresenius SE & Co.
KGaA.
Fresenius SE & Co. KGaA is a global health care group,
providing products and services for dialysis, hospital and
outpatient medical care. In 2016, Groups sales were €29.1 billion.
On December 31, 2016, the Fresenius Group had nearly 233,000
employees worldwide. For more information, visit the company’s
website at www.fresenius.com.
About Akorn Inc.
Akorn Inc. is a specialty generic pharmaceutical company engaged
in the development, manufacture and marketing of multisource and
branded pharmaceuticals. It has a diversified portfolio of
more than 180 generic, branded, OTC and animal health products.
Akorn manufactures ophthalmic, injectable and niche sterile and
non-sterile pharmaceuticals. In 2016, Akorn grew revenues 13% to
$1.1 billion and net income increased 22% to $184 million. The
company employs more than 2,000 people and has three R&D
centers and five manufacturing facilities in the United States,
Switzerland and India. Additional information is available on
Akorn’s website at www.akorn.com.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed acquisition of Akorn, Inc. (“Akorn”) by
Fresenius Kabi AG (“Fresenius Kabi”). In connection with the
proposed acquisition, Akorn intends to file relevant materials with
the United States Securities and Exchange Commission (the “SEC”),
including Akorn’s proxy statement in preliminary and definitive
form. Shareholders of Akorn are urged to read all relevant
documents filed with the SEC, including Akorn’s proxy statement
when it becomes available, because they will contain important
information about the proposed transaction and the parties to the
proposed transaction. Investors and security holders are able to
obtain the documents (once available) free of charge at the SEC’s
website at www.sec.gov, or free of charge from Akorn at
http://investors.akorn.com/phoenix.zhtml?c=78132&p=irol-sec or
by directing a request to Stephanie Carrington, Senior Vice
President, ICR at 847-279-6162 or
Stephanie.Carrington@icrinc.com.
Participants in the Solicitation
Akorn and its directors, executive officers and other members of
management and employees, under SEC rules, may be deemed to be
“participants” in the solicitation of proxies from shareholders of
Akorn in favor of the proposed transaction. Information about
Akorn’s directors and executive officers is set forth in Akorn’s
Proxy Statement on Schedule 14A for its 2017 Annual Meeting of
Shareholders, which was filed with the SEC on March 20, 2017, and
its Annual Report on Form 10-K for the fiscal year ended December
31, 2016, which was filed with the SEC on March 1, 2017. These
documents may be obtained free of charge from the sources indicated
above. Additional information regarding the interests of these
participants which may, in some cases, be different than those of
Akorn’s shareholders generally, will also be included in Akorn’s
proxy statement relating to the proposed transaction, when it
becomes available.
Cautionary Statement Regarding Forward-Looking
Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Readers can identify these statements by forward-looking
words such as “may,” “could,” “should,” “would,” “intend,” “will,”
“expect,” “anticipate,” “believe,” “estimate,” “continue” or
similar words. A number of important factors could cause actual
results of Akorn, Fresenius Kabi, Fresenius SE & Co. KGaA
(“Fresenius Parent”) and their respective subsidiaries to differ
materially from those indicated by such forward-looking statements.
These factors include, but are not limited to, (i) the risk that
the proposed merger with Fresenius Kabi may not be completed in a
timely manner or at all; (ii) the failure to receive, on a timely
basis or otherwise, the required approval of the proposed merger
with Fresenius Kabi by Akorn’s shareholders; (iii) the possibility
that competing offers or acquisition proposals for Akorn will be
made; (iv) the possibility that any or all of the various
conditions to the consummation of the merger may not be satisfied
or waived, including the failure to receive any required regulatory
approvals from any applicable governmental entities (or any
conditions, limitations or restrictions placed on such approvals);
(v) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement dated
April 24, 2017, among Akorn, Fresenius Kabi, Quercus Acquisition,
Inc. and, solely for purposes of Article VIII thereof, Fresenius
Parent (the “Merger Agreement”), including in circumstances which
would require Akorn to pay a termination fee or other expenses;
(vi) the effect of the announcement or pendency of the transactions
contemplated by the Merger Agreement on Akorn’s ability to retain
and hire key personnel, its ability to maintain relationships with
its customers, suppliers and others with whom it does business, or
its operating results and business generally; (vii) risks related
to diverting management’s attention from Akorn’s ongoing business
operations; (viii) the risk that shareholder litigation in
connection with the transactions contemplated by the Merger
Agreement may result in significant costs of defense,
indemnification and liability and (ix) the risk factors detailed in
Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K
for the fiscal year ended December 31, 2016 (as filed with the
Securities and Exchange Commission on March 1, 2017) and other risk
factors identified herein or from time to time in our periodic
filings with the Securities and Exchange Commission. Readers should
carefully review these risk factors, and should not place undue
reliance on these forward-looking statements. These forward-looking
statements are based on information, plans and estimates at the
date of this report. None of Akorn, Fresenius Kabi or Fresenius
Parent undertakes any obligation to update any forward-looking
statements to reflect changes in underlying assumptions or factors,
new information, future events or other changes.
1 Assumes transaction closes on December 31, 2017. Based on
projected debt (excluding deferred financing costs) of
approximately $832 million less projected cash and cash equivalents
of approximately $382 million, each as of December 31, 2017.
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version on businesswire.com: http://www.businesswire.com/news/home/20170424006607/en/
Media:Matt KuhnFresenius Kabi(847)
550-5751matt.kuhn@fresenius-kabi.comorAkornInvestors/Media:Stephanie
CarringtonICR, Inc.(646)
277-1282Stephanie.carrington@icrinc.com
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