Cooper Cos. (COO) Reports Agreement with Teva Pharamaceuticals (TEVA) to Acquire PARAGARD IUD for $1.1B
The Cooper Companies, Inc. (NYSE: COO) today announced it has entered into a definitive asset purchase agreement with Teva Pharmaceutical Industries Ltd. to acquire the global rights and business of its PARAGARD® Intrauterine Device (IUD) in a $1.1 billion cash transaction. The boards of directors of both Cooper and Teva have unanimously approved the transaction and closing is expected to occur prior to calendar year-end 2017 subject to the satisfaction of customary closing conditions including antitrust clearance.
PARAGARD is currently sold only in the U.S. and had revenues of approximately $168 million for the trailing twelve-month period ending June 30, 2017. Excluding acquisition and integration related expenses and deal-related amortization, the transaction is expected to be accretive to Cooper’s gross and operating margins, and approximately $0.70 to $0.75 accretive to earnings per share in year one. The acquired business includes Teva’s manufacturing facility in Buffalo, NY, which exclusively produces the PARAGARD IUD.
Cooper estimates the U.S. IUD market is approximately $1 billion with expected growth in the mid-single digits. Approximately 16% of the U.S. market is believed to be non-hormonal IUDs with PARAGARD being the only approved product in this space.
Commenting on the transaction, Robert S. Weiss, Cooper’s president and chief executive officer said, “We are extremely pleased to announce this acquisition which will expand CooperSurgical’s business in a large and growing segment of the contraceptive device market. CooperSurgical will now offer the only IUD on the U.S. market that is hormone-free, long-lasting, and reversible. This is also a perfect strategic fit as it leverages CooperSurgical’s long-standing, strong relationships with gynecologists.”
Cooper has arranged a commitment for a bridge loan of $1.1 billion to support funding of the acquisition. Cooper’s financial advisor for the transaction is Guggenheim Securities with Carter Ledyard & Milburn LLP acting as legal advisor.
PARAGARD is an intrauterine device (IUD) that is inserted into a woman’s uterus for long-term birth control (contraception). PARAGARD’s T-shaped plastic frame has copper wire coiled around the stem and two copper sleeves along the arms that continuously release copper into the uterus. Together the plastic T frame and copper produce a sterile inflammatory reaction in the uterus that is toxic to sperm, which helps prevent fertilization. PARAGARD is the only copper IUD available in the U.S. It is over 99% effective and is FDA approved for contraception for up to ten years after insertion. PARAGARD is regulated as a pharmaceutical device that is inserted and later removed by an in-office health care provider. The cost of the IUD is covered by insurance in most cases.