Notable Mergers and Acquisitions of the Day 05/03: (NVS) (KNSY) (ABT)
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- After the market closed Wednesday, Novartis (NYSE: NVS) signed a definitive agreement to acquire specialty dermatology generics company Fougera Pharmaceuticals. Under the terms of the agreement, Novartis will acquire the business, which is based in Melville, New York, for $1.525 billion in an all-cash transaction.
The sellers are comprised of a consortium of private equity funds led by Nordic Capital, Avista Capital Partners and DLJ Merchant Banking Partners (a Credit Suisse affiliate).
The transaction requires regulatory approvals and is expected to be completed in the second half of 2012. Based on Fougera Pharmaceuticals’ 2011 earnings before interest, taxes, depreciation, and amortization (EBITDA) of USD 173 million, the acquisition represents a multiple of 8.8 times. The transaction is expected to be accretive to core earnings per share (EPS) and will be financed from the Group’s existing cash resources and cash flow. The transaction meets Novartis’ strict financial criteria for acquisitions relative to targeted cash flow return on investment (CFROI) metrics.
- Kensey Nash Corporation (Nasdaq: KNSY) agrees to be acquired by Royal DSM (DSM) (NYSE Euronext: DSM KON) for $38.50 per share in cash, or a 33% over yesterday's close.
he tender offer is currently expected to be completed by the end of June 2012. Following the completion of the tender offer, DSM will acquire the remaining outstanding shares of Kensey Nash common stock through a second step merger, subject to customary conditions.
"We are very pleased to have entered into the merger agreement with DSM, as the transaction will deliver significant value to our stockholders. The price to be paid to our stockholders represents a premium of 33% over our closing price on May 2, 2012," said Joe Kaufmann, President and Chief Executive Officer. "When completed, the transaction will also be a great event for our strategic partners, customers and employees. DSM is a global Life Sciences and Materials Sciences company with sales around euro 9 billion and 22,000 employees worldwide. Their presence in biomedical materials markets comes from a unique convergence between their expertise in Life Sciences and Materials Sciences. Our employees will benefit from the growth and expansion that DSM envisions will occur from this combination of capabilities and resources," Mr. Kaufmann added.
- Abbott (NYSE: ABT) and Action Pharma A/S, a privately owned company, entered into an agreement in which Abbott will acquire AP214 from Action Pharma.
AP214 is in development to prevent acute kidney injury (AKI) associated with major cardiac surgery in patients at increased risk and has further potential in adjacent indications. AP214 is a hormone analogue that targets both systemic inflammation and cellular death (apoptosis) caused by hypoxia (lack of blood flow) that can occur during surgery. In September 2011, Action Pharma announced positive Phase 2b top-line results evaluating the efficacy, safety and tolerability of AP214. Abbott plans to conduct another Phase 2b study, which is expected to begin later this year.
Under the terms of the agreement, Abbott will acquire all global rights to develop and commercialize AP214 for the prevention of AKI and other relevant indications. Abbott will provide a cash payment of $110 million to Action Pharma and will be responsible for funding all future development and commercialization activities regarding AP214. No later milestone payments or royalties will be paid to Action Pharma. Abbott expects to incur a one-time specified item in the second quarter of 2012, related to this payment.
In 2003, Action Pharma in-licensed Zealand Pharma A/S' SIP technology for use with pro-opiomelanocortin derivatives. As part of the agreement between Abbott and Action Pharma, Action Pharma's original licensing agreement with Zealand Pharma regarding the SIP® technology is cancelled, and superseded with a new agreement between Abbott and Zealand Pharma (see separate announcement from Zealand Pharma) regarding the SIP® technology. Upon the closing of the Abbott and Action Pharma transaction, Action Pharma will make a one-time payment to Zealand Pharma of $11 million. Zealand Pharma will also be entitled to a low single-digit royalty on Abbott's future global sales of AP214 (referred to as ZP1480 by Zealand Pharma). Since 2003, Action Pharma has solely developed AP214 to its current clinical status.
Back Bay Life Science Advisors provided strategic advisory services for Action Pharma prior to and throughout the transaction.
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