Acquisition is Immediately Accretive
- Adds Nearly $700 million to FY2015
Revenues
-Company Expects to Achieve $125 Million in
Synergies by FY2016
- Accretive to FY2015 Non-GAAP EPS by
Approximately $0.78
Diversifies Forest Offerings in Key
Therapeutic Areas & Geographies
- Expands Gastrointestinal Franchise in U.S.
and Canada
- Complements Growing Cystic Fibrosis Business
in Europe
Forest Laboratories, Inc. (NYSE:FRX) 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.
Debevoise & Plimpton LLP and Cleary Gottlieb Steen &
Hamilton LLP served as Forest’s legal counsel, and Aptalis was
advised by Ropes & Gray. Morgan Stanley acted as financial
advisor to Forest. J. P. Morgan Securities LLC acted as financial
advisors to Aptalis.
Conference call details:
Forest executives will host a conference call with investors at
8:30 AM EST today to discuss the details of today’s strategic
announcements. The conference call will be webcast live on the
Company’s website at www.frx.com. Please log on to the website at
least fifteen minutes prior to the conference call as it may be
necessary to download software to access the call. A replay of the
conference call will be available until February 8, 2014 and also
by dialing (800) 753-4652 (US or Canada) or +1 (402) 220-4235
(international), Conference ID: FRX0108.
About Forest Laboratories and Its Products
Forest Laboratories (NYSE: FRX) is a leading, fully integrated,
specialty pharmaceutical company largely focused on the United
States market. The Company markets a portfolio of branded drug
products and develops new medicines to treat patients suffering
from diseases principally in five therapeutic areas: central
nervous system, cardiovascular, gastrointestinal, respiratory, and
anti-infective. Our strategy of acquiring product rights for
development and commercialization through licensing, collaborative
partnerships and targeted mergers and acquisitions allows us to
take advantage of attractive late-stage development and commercial
opportunities, thereby managing the risks inherent in drug
development. The Company is headquartered in New York, NY.
About Aptalis
Aptalis Pharma is a privately held, leading specialty
pharmaceutical company providing innovative, effective therapies
for unmet medical needs including cystic fibrosis and
gastrointestinal disorders. Aptalis has manufacturing and
commercial operations in the United States, the European Union and
Canada, and its products include ZENPEP®, CANASA®, CARAFATE®,
PYLERA®, RECTIV®, VIOKACE™, ULTRESA® LACTEOL®, DELURSAN®,
PANZYTRAT®, and SALOFALK®. Aptalis also formulates and clinically
develops enhanced pharmaceutical and biopharmaceutical products for
itself and others using its proprietary technology platforms
including bioavailability enhancement of poorly soluble drugs,
custom release profiles, and taste-masking/orally disintegrating
tablet (ODT) formulations.
About TPG
TPG is a leading global private investment firm founded in 1992
with $55.7 billion of assets under management and offices in San
Francisco, Fort Worth, Austin, Beijing, Chongqing, Hong Kong,
London, Luxembourg, Melbourne, Moscow, Mumbai, New York, Paris, Sao
Paulo, Shanghai, Singapore and Tokyo. TPG has extensive experience
with global public and private investments executed through
leveraged buyouts, recapitalizations, spinouts, growth investments,
joint ventures and restructurings. The firm’s well-known
investments in the healthcare sector include Biomet, Fenwal,
Healthscope, IASIS Healthcare, Immucor, IMS Health, Par
Pharmaceutical, Quintiles Transnational and Surgical Care
Affiliates, among others. For more information visit
www.tpg.com.
This release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
These statements involve a number of risks and uncertainties,
including the difficulty of predicting FDA approvals, the
acceptance and demand for new pharmaceutical products, the impact
of competitive products and pricing, the timely development and
launch of new products, and the risk factors listed from time to
time in Forest Laboratories’ Annual Report on Form 10-K, Quarterly
Reports on Form 10-Q and any subsequent SEC filings. Forest assumes
no obligation to update forward-looking statements contained in
this release to reflect new information or future events or
developments.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the notes, nor shall it constitute
an offer, solicitation or sale in any jurisdiction in which, or to
any person to whom, such offer, solicitation or sale is unlawful.
Any offers of the notes will be made only by means of a private
offering memorandum.
Forest Laboratories, Inc.INVESTORS:Frank J.
Murdolo, 1-212-224-6714Vice President - Investor
Relationsmedia.relations@frx.comorMEDIA:Amanda KaufmanMedia
Relationsamanda.kaufman@frx.com
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