Concordia Healthcare Corp. on Tuesday said it would buy U.K.-based Amdipharm Mercury Ltd. from European private-equity firm Cinven for about $1.2 billion in cash and around $700 million in stock, a deal the Canadian pharmaceutical company calls transformational.
Concordia said the acquisition, valued at about $3.5 billion including debt, gives it a platform to expand globally and adds more than 190 niche pharmaceutical products to its current portfolio.
“This acquisition is a key milestone and pivotal turning point in Concordia’s strategy, which gives us the platform to take our business to the next level,” Concordia Chief Executive Mark Thompson said in a statement. “The combination of our highly complementary yet geographically diverse businesses is truly transformational.”
The deal further bolsters Oakville, Ontario-based Concordia’s operations after its $1.2 billion purchase earlier this year of certain assets of Covis Pharma Holdings S.a.r.l. Covis helped the Canadian firm nearly triple its revenue in the first half of this year to $114 million. In late June, Concordia listed on Nasdaq to help increase its exposure.
Amdipharm, or AMCo, was created by Cinven in 2012 through the merger of two niche pharmaceutical companies, Amdipharm and Mercury Pharma Group. It acquired both companies in 2012, paying £465 million ($716 million) for Mercury and £367 million for Amdipharm. The group has grown further through a series of smaller deals.
AMCo sells off-patent drugs in therapy areas for which treatment regimens are well-established and less likely to face competition from innovative new drugs. It had revenue in 2014 of £293 million in 2014, up 21.5% from a year earlier.
Concordia said the combined company, on a pro forma basis, is expected to have revenue of between $870 million and $920 million for 2015. It also expects the deal to boost its adjusted share earnings by more than 35% in the first full year.
The Canadian company will issue 8.49 million shares under the deal, which will give Cinven a 19.9% stake in Concordia. Closing is expected in the fourth quarter.
By Judy McKinnon
Source: Wall Street Journal
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