Aspen acquires API business, branded drugs from Merck

Transaction is valued at $1 billion

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OSS, Netherlands—The Aspen Group has announced the signingof an agreement with MSD (known as Merck in the United States and Canada) toacquire from Merck an active pharmaceutical ingredient (API) manufacturingbusiness as well as a portfolio of branded drugs. The manufacturing site islocated in the Netherlands, with a satellite facility and sales office in theUnited States, and the acquired portfolio includes 11 finished dose-formmolecules for a variety of indications.
The transaction is valued at approximately $1 billion, andis subject to conditions precedent. Under the agreement, Aspen Holdings willacquire the shares of a new company, Dutch Newco, containing Merck's APIbusiness for a consideration of roughly 36 million euros (approximately $46.9million). Dutch Newco will simultaneously acquire inventory worth approximately300 million euros (approximately $391.3 million).
The API business in question consists of manufacturingoperations as several Merck sites, including in Oss, the Netherlands, parts ofthe Moleneind and De Geer sites and the entire Boxtel site, as well as SiouxCity, Iowa. In addition, there are also sales offices at the Oss site and inDes Plaines, Ill. The API business manufactures biochemicals and chemicalswhere the process is fully synthetic. For the year ended December 31, 2012, thebusiness recorded pro-forma revenue of 284 million euros (approximately $370.5million).
The products being acquired include the following brands:Ovestin, Sustanon, Metrigen, Orgaran, Decadron, Oradexon, Metricorten,Meticortelone, Deca Durabolin, Thyrax, Strumazol, Gracial, Novial and Benutrex.The drugs fall into a variety of therapeutic areas, including hormonereplacement therapy, anti-coagulants, corticosteroids, anabolic steroids,hyperthyroidism, oral contraceptives and vitamin B complex. Merck reported thatthe products recorded revenue of $248 million in the financial year that endedDecember 31, 2012, with more than half of the revenue generated in LatinAmerica and Asia Pacific, with Europe as another key earning territory. For the time being, the products will initially be manufactured under Merck'spreexisting manufacturing arrangements in keeping with a medium-term supplyagreement between Aspen Global Inc. and Merck.
Aspen Global Inc., a wholly owned subsidiary of AspenHoldings, has the option to acquire the products through the exercising of acall option with a resulting asset purchase for a consideration of $600million. Both acquisitions are expected to take place this year, with the APIbusiness acquisition expected October 1 and the products acquisition expectedDecember 31.
"One of Aspen's primary strategic intents is to furtherglobalize its business, increase its representation across a number ofadditional territories and provide support to its growing global presence witha differentiated pipeline," Stephen Saad, chief executive of Aspen Group, saidin a press release. "This transaction provides a platform to contribute to theachievement of this strategic intent by enabling Aspen to access a niche rangeof APIs and finished-dosage products."
SOURCE: Aspen press release

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