Perrigo to acquire Elan

Perrigo to acquire Elan

Buyout creates a combined entity with industry-leading revenue, adjusted EBITDA and earnings growth rates.

Perrigo Co. (NYSE: PRGO), a leading global provider of quality, affordable health care products, and Elan Corp. plc (NYSE: ELN), a leading biotechnology company headquartered in Ireland, announced that, following a formal sale process conducted by Elan, Perrigo and Elan have entered into a definitive agreement under which Elan will be acquired by a new holding company incorporated in Ireland (New Perrigo). The cash and stock transaction, which is valued at approximately US $8.6 billion based on the closing price of Perrigo shares on July 26, 2013 (US $6.7 billion excluding Elan’s cash on hand), will create a global health care company with an industry-leading growth profile and the geographic scale and scope to continue building a truly differentiated business.

“Through this transaction, Perrigo establishes a diversified platform for further international expansion,” stated Perrigo Chairman and CEO Joseph C. Papa. “We believe this transaction is compelling for Elan shareholders and fully takes into account the value of Elan’s assets, including a large cash balance and a double-digit royalty claim on Tysabri®, a blockbuster product that generated revenues of US $1.6 billion last year and has been growing at a compound annual growth rate of 19 percent. We believe the combination of Perrigo and Elan will create an industry-leading global health care company with the balance sheet liquidity and operational structure to accelerate our growth and capitalize on international market opportunities.”

Mr. Robert A. Ingram, chairman of Elan, commented, “This is an excellent transaction for Elan shareholders and provides them with cash consideration as well as the opportunity to benefit from the potential upside value of the new company. Joe Papa and his team have demonstrated exceptional capability and delivery of results in building a premier health care company over the past number of years. We have the confidence in Joe and his leadership team to continue to grow and expand its presence on a global scale.”

Additionally, Elan CEO Mr. G. Kelly Martin, said, “The Elan platform has been constructed over the years to provide a unique and compelling investment thesis for our shareholders. This transaction underscores the tremendous value of Elan's platform. The new combined company should deliver value, growth and diversification to shareholders for many years to come.”

The proposed transaction, which has been unanimously approved by the respective boards of directors of Perrigo and Elan, is expected to close by the end of calendar year 2013. At the close of the transaction, Perrigo and Elan will be combined under New Perrigo, a new company incorporated in Ireland, where Elan is incorporated today. New Perrigo, which is expected to be called Perrigo Co. plc or a variant thereof, will be led by Perrigo’s current leadership team.

Key benefits of the transaction for Perrigo and Elan:

  • Platform for international expansion
    • Operating base in Ireland to serve as a business hub and gateway for expansion into international markets
    • Scale, resources and corporate structure to drive strategic initiatives and investments
    • Differentiated business model well-positioned to continue growth in core markets and to expand to other international markets
  • Strong business and financial profile
    • Highly diversified revenue stream
    • Strong pro forma cash flows to continue to support an investment grade credit profile
    • Robust and sustainable growth outlook
  • Financially compelling
    • Enhances revenue, adjusted EBITDA and earnings growth rates and expands margins
    • Immediately accretive to Perrigo adjusted earnings per share in 2014
    • Meaningful synergy opportunities
  • Benefits to Elan shareholders
    • Upfront value unlocked via the cash consideration, while Elan Shareholders will also have the opportunity to participate in the benefits of New Perrigo
    • Perrigo management team with strong track record of successfully acquiring and integrating diverse businesses

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish