Watson to Acquire Actavis Group for EUR 4.25 Billion
(Thomson Reuters ONE) -
- Creates 3(rd) largest global generics company -
- ~$8.0 billion anticipated pro forma combined revenue in 2012 -
- Significantly increases scale of Watson's ex-U.S. generic business -
- Accelerates revenue and earnings growth -
- Immediately accretive to non-GAAP earnings, before synergies -
- Greater than $300 million annual synergies anticipated within 3 years -
- Strong combined cash flow allows for rapid pay-down of debt -
- Additional earnout contingent on Actavis 2012 performance -
PARSIPPANY, NJ - April 25, 2012 - Watson Pharmaceuticals, Inc. (NYSE: WPI) and
Actavis Group today jointly announced that Watson has entered into a definitive
agreement to acquire privately held Actavis for approximately EUR4.25 billion
upfront. As a result of this acquisition, Watson will become the third largest
global generics company with 2012 anticipated pro forma revenue of approximately
$8 billion.
Actavis, which as a stand-alone company was positioned for strong growth, has a
commercial presence in more than 40 countries and markets more than 1,000
products globally. Actavis has approximately 300 projects in its development
pipeline and manufactured more than 22 billion pharmaceutical doses in 2011.
Actavis has more than 10,000 employees worldwide and had 2011 revenues of
approximately $2.5 billion.
"The acquisition of Actavis will create the 3(rd) largest global generics
company, substantially completing Watson's expansion as a leading global
generics company. Actavis dramatically enhances our commercial position on a
global basis and brings complementary products and capabilities in the United
States," said Paul M. Bisaro, President and CEO of Watson.
"In a single, commercially compelling transaction, we more than double Watson's
international access and strengthen our commercial position in key established
European markets as well as exciting emerging growth markets, including Central
and Eastern Europe and Russia," Bisaro continued. "The transaction achieves
Watson's stated strategic objective of expanding and diversifying our business
into a truly global company. Once the transaction is completed, approximately
40% of our generic revenues will come from markets outside of the U.S."
"This transaction is financially compelling, accelerating Watson's top and
bottom-line growth profile for the foreseeable future. It will be immediately
accretive to non-GAAP earnings before synergies, and we estimate that annual
synergies of greater than $300 million can be achieved within three years.
Between now and closing, we will work closely with Actavis' management to
prepare for a rapid and seamless integration so that Watson can maximize the
benefits of this acquisition and capitalize on the significant potential to
ensure long-term growth for our shareholders."
"Today marks a milestone in the history of Actavis. For two years I have had
the pleasure of working together with the newly formed Actavis management team
and our stakeholders who have led the company into a new phase," said Claudio
Albrecht, Executive Chairman and CEO of Actavis. "We have successfully placed
Actavis in a strong position to meet the future growth opportunities in the
generic pharmaceutical industry."
"Building on this strong foundation, the combination of Watson and Actavis will
result in a company of the size required to position itself as a strong player
in the generic pharmaceutical industry. The two companies are an ideal
complementary fit that will enable the combined company to enhance its position
among the industry leaders. Additionally, together Watson and Actavis will be
well placed in the fast-paced and dynamic biosimilars market," Albrecht added.
Key Benefits of the Transaction
Commercially Compelling Transaction
Dramatically Enhances Watson's International Presence
* The acquisition combines two growing, successful and profitable companies
into a stronger global player that will benefit from sustainable revenue and
earnings growth, and strong cash flow. With this transaction, Watson's
international revenues are expected to increase from approximately 16% of
total generic net revenues at the end of 2011 to approximately 40%.
Expanded Global Market Presence
* The combined company will hold a top 3 position in 11 markets and a top 5
market position in 15 markets. The combined company will have commercial
operations in more than 40 countries. Actavis' exceptional global strength,
including leading market positions in key established commercial markets and
emerging markets in Central and Eastern Europe and Russia, complements
Watson's position in established markets including the UK, France and
Australia.
Expanded Portfolio and Pipeline
* The acquisition will expand Watson's core leadership position in modified
release, solid oral dosage and transdermal products into semi-solids,
liquids and injectables. The result will be a broader and more diversified
global product portfolio, and an expanded development pipeline. When
combined the company will have 45 First-to-Files and 30 exclusive First-to-
Files in the U.S.
Financially Compelling Transaction
Significantly and Immediately Accretive
* The transaction is expected to be immediately accretive to non-GAAP
earnings, before synergies. Including synergies, Watson anticipates the
acquisition will be greater than 30% accretive to 2013 Watson non-GAAP EPS,
with accretion accelerating in 2014 through organic growth and additional
synergies.
Synergies Provide Added Benefits
* Watson expects to achieve annual synergies of $300 million within three
years following transaction close, predominantly consisting of SG&A, R&D and
corporate cost synergies.
* Watson expects additional longer-term cost synergies related to optimizing
the supply chain and additional longer-term revenue synergies derived from
product launches in new markets. Watson also expects to benefit from a lower
pro forma effective tax rate of approximately 28%.
Strong Combined Cash Flow Allows for Rapid Debt Repayment
* Cash flow of the combined business is anticipated to permit Watson to pay
down debt quickly to achieve a leverage ratio of below 3.0x debt to adjusted
EBITDA in 2013 and approximately 2.0x debt to adjusted EBITDA in 2014.
Watson expects to maintain its investment grade rating from all three rating
agencies following the close of the transaction.
Additional Capabilities, Global Management/Employee Strength
Strengthens 3(rd) Party Business
* The combination of Watson's Specifar Pharmaceuticals third-party business,
with Actavis' MEDIS third-party business will result in the creation of the
largest out-licensing company with a broader range of products.
Experienced, International Management Team
* The combination of Watson and Actavis dramatically expands the management
expertise necessary to drive international growth in established and
emerging markets. Actavis also brings considerable integration experience
to the combination, having focused extensively on integration of historical
acquisitions since going private in 2007, including consolidating corporate
functions, merging CEE and Western Europe operations and implementing
project management across the value chain.
Expanded Global Team
* Combined, Watson will have more than 17,000 employees globally. The Company
at acquisition close will have approximately 20 manufacturing facilities and
more than a dozen R&D centers. With enhanced size and scale, the combined
company will be well positioned to capitalize on its commercial, R&D,
manufacturing and customer service capabilities.
Transaction Terms
Under the terms of the agreement, Watson will acquire Actavis for approximately
EUR4.25 billion. The total consideration will include a cash payment of
approximately EUR4.15 billion, as well as the assumption of a maximum of EUR100
million in revolver debt, which is to be repaid at closing.
Actavis stakeholders could also receive additional consideration, contingent
upon the company achieving negotiated levels of 2012 results. The contingent
payment, if fully earned would result in the delivery of up to 5.5 million
shares of Watson common stock. This contingent payment was valued during the
negotiations at EUR250 million, based on a per share price of $60, using a Euro
to U.S. dollar exchange rate of $1.32. The shares granted, if any, would be
issued in 2013.
Watson intends to fund the cash portion of the transaction through a combination
of term loan borrowings and the issuance of senior unsecured notes. Watson
currently has bridge loan commitments from BofA Merrill Lynch and Wells Fargo
Bank, N.A. pending execution of its final financing plans. Watson anticipates
that the combined company will generate substantial free cash flow, enabling
Watson to pay down debt quickly to below 3.0x debt to adjusted EBITDA by 2013
and to achieve a level of approximately 2.0x debt to adjusted EBITDA in 2014.
Approvals and Timing
The acquisition will be subject to customary conditions, including review by the
U.S. Federal Trade Commission (FTC) under the provisions of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended ("HSR Act"), as well as
approvals outside of the United States. Pending approvals, Watson anticipates
closing the transaction in the fourth quarter of 2012.
BofA Merrill Lynch is acting as exclusive financial advisor and Latham & Watkins
LLP is acting as legal advisor to Watson in connection with this transaction.
Conference Call
The Company will host a conference call, with supporting slides available via
webcast, beginning at 4:30 p.m. Eastern Daylight Time on April 25, 2012 to
discuss the proposed acquisition. The dial-in number to access the call is
U.S./Canada (877) 251-7980; International +1 706 643-1573 and the Conference ID
is 67192051. To access the slides go to Watson's Investor Relations Web site at
http://ir.watson.com, or directly at
http://www.videonewswire.com/event.asp?id=85954.
A taped replay of the conference call will be available beginning approximately
two hours after the call's conclusion and will remain available through 12:00
midnight Eastern Daylight Time on May 7, 2012. The replay may be accessed by
dialing (855) 859-2056 and entering the same Conference ID above. From
international locations, the replay may be accessed by dialing +1 404 537-3406.
About Watson Pharmaceuticals, Inc.
Watson Pharmaceuticals, Inc. is a leading integrated global pharmaceutical
company. Watson is engaged in the development, manufacture and distribution of
generic pharmaceuticals and specialized branded pharmaceutical products focused
on Urology and Women's Health. The Company is also developing biosimilar
products in Women's Health and Oncology. Additionally, we distribute generic
and branded pharmaceuticals through our Anda Distribution business.
In 2011, Watson was the third largest generic pharmaceutical company in the
United States. We also have commercial operations in key international markets
including Canada, Western Europe, Asia/Pacific, South Africa and Latin America.
Watson distributes approximately 8,500 stock-keeping units in the U.S. directly
to more than 60,000 customers through our Anda Distribution Division.
For press release and other company information, visit Watson Pharmaceuticals'
Web site at http://www.watson.com.
About Actavis
Actavis is one of the world's leading generic pharmaceutical companies,
specializing in the development, manufacture and sale of generic
pharmaceuticals. The company has operations in more than 40 countries, with over
10,000 employees. At present, Actavis has a portfolio which includes more than
1,000 medicines present on the market and registered in more than 70 countries.
# # #
Forward-Looking Statement
Statements contained in this press release that refer to Watson's estimated or
anticipated future results or other non-historical facts are forward-looking
statements that reflect Watson's current perspective of existing trends and
information as of the date of this release. For instance, the statements in
this press release relating to expected or anticipated benefits of the Actavis
acquisition, the future financial performance of the combined company, cost
synergies, future tax rates, the pay down of debt obligations, and the closing
of the transaction are forward-looking statements. It is important to note that
Watson's goals and expectations are not predictions of actual performance.
Actual results may differ materially from Watson's current expectations
depending upon a number of factors affecting Watson's business, Actavis'
business and risks associated with acquisition transactions. These factors
include, among others, the inherent uncertainty associated with financial
projections; successful close and subsequent integration of the Actavis
acquisition and the ability to recognize the anticipated synergies and benefits
of the Actavis acquisition; the anticipated size of the markets and continued
demand for the Watson's and Actavis' products; the impact of competitive
products and pricing; the receipt of required regulatory approvals for the
transaction (including the approval of antitrust authorities necessary to
complete the acquisition); access to available financing (including financing
for the acquisition) on a timely basis and on reasonable terms; risks of
fluctuations in foreign currency exchange rates; the risks and uncertainties
normally incident to the pharmaceutical industry, including product liability
claims and the availability of product liability insurance; the difficulty of
predicting the timing or outcome of pending or future litigation or government
investigations; periodic dependence on a small number of products for a material
source of net revenue or income; variability of trade buying patterns; changes
in generally accepted accounting principles; risks that the carrying values of
assets may be negatively impacted by future events and circumstances; the timing
and success of product launches; the difficulty of predicting the timing or
outcome of product development efforts and regulatory agency approvals or
actions, if any; market acceptance of and continued demand for Watson's and
Actavis' products; costs and efforts to defend or enforce intellectual property
rights; difficulties or delays in manufacturing; the availability and pricing of
third party sourced products and materials; successful compliance with
governmental regulations applicable to Watson's and Actavis' facilities,
products and/or businesses; changes in the laws and regulations, affecting among
other things, pricing and reimbursement of pharmaceutical products; and such
other risks and uncertainties detailed in Watson's periodic public filings with
the Securities and Exchange Commission, including but not limited to Watson's
Annual Report on form 10-K for the year ended December 31, 2011. Except as
expressly required by law, Watson disclaims any intent or obligation to update
these forward-looking statements.
All trademarks are the property of their respective owners.
Press release English:
http://hugin.info/134004/R/1605774/508937.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Actavis via Thomson Reuters ONE
[HUG#1605774]
Unternehmensinformation / Kurzprofil:
Datum: 25.04.2012 - 22:29 Uhr
Sprache: Deutsch
News-ID 139384
Anzahl Zeichen: 17722
contact information:
Town:
Zug
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 204 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Watson to Acquire Actavis Group for EUR 4.25 Billion"
steht unter der journalistisch-redaktionellen Verantwortung von
Actavis (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
