Generic drug maker Actavis has agreed to acquire Dublin headquartered Warner Chilcott for about $5bn (€3.9bn) excluding net debt in a deal to expand in women’s health and urology.
Warner Chilcott investors will receive 0.16 shares of new Actavis stock for each Warner Chilcott share they own, Actavis said in a statement yesterday.
The agreement values each Warner Chilcott share at $20.08, a 4.5% premium over the stock’s closing price last Friday. Including Warner Chilcott’s more than $3bn in net debt, the total value of the acquisition is about $8.5bn.
The combined company will have $11bn in annual revenue as US firm Actavis also adds gastroenterology and dermatology businesses, according to the statement. Over a year ago, Warner Chilcott disclosed that it was in discussions with potential bidders and conducting a strategic review.
“The combination of Actavis and Warner Chilcott creates a strong specialty brand portfolio focused on therapeutic categories with strong growth potential and is supported by a deep pipeline of development programmes,” Actavis chief executive Paul Bisaro said.
Actavis is paying about 5.8 times earnings before interest, taxes, depreciation and amortisation, according to data compiled by Bloomberg. That compares with the median of about 13 times ebitda in a survey of almost 40 similar deals, the data show.
Actavis makes generic versions of birth-control pill Seasonique and pain medication Percocet. Warner Chilcott’s products include oral contraceptives such as Ovcon 35 and Estrostep FE, as well as the acne treatment Doryx.
Bank of America and Greenhill & Co served as financial advisers for Actavis, according to the statement, while Deutsche Bank provided counsel to Warner Chilcott.
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