NEW YORK—Forest Laboratories, Inc. has announced the establishment of a definitive agreement with Aptalis Pharma, under which it will acquire the privately held company from shareholders for $2.9 billion in cash. Aptalis, which is based in Bridgewater, N.J., specializes in therapies for diseases with high unmet need such as cystic fibrosis and gastrointestinal disorders.
“Aptalis has built a strong position in the North American and European gastroenterology and cystic fibrosis markets through internal product development and acquisitions of products and companies over the last few years,” Frank Verwiel, M.D., CEO of Aptalis, said in a press release. “I’m proud of all that our team has accomplished, and Forest’s acquisition of our company is a testament to the value we have created and the strength of the business we have built. There is a strong business fit between Aptalis and Forest, our strategies are closely aligned, and I am confident that Forest will maximize the opportunity for our products and patients.”
Aptalis has roughly 1,000 employees worldwide, with facilities in the United States, Canada and Europe, and saw sales of $688 million in fiscal year 2013. It was acquired by global private investment firm TPG in 2008—when it was known as Axcan Pharma—for $1.3 billion. Forest expects the transaction to be accretive to its fiscal year 2015 non-GAAP earnings per share.
“Over the course of our partnership, Frank and his world-class team have built a strong, diversified business with an exciting pipeline,” said Todd Sisitsky, partner at TPG Capital. “The company has grown throughout our ownership period, and we are enthusiastic to see a dynamic specialty pharmaceutical company like Forest partner with Aptalis on the next leg of the company’s growth.”
The company’s most advanced pipeline product is a proprietary inhaled formulation of levofloxacin for the treatment of cystic fibrosis, which recently completed a Phase 3 clinical trial in Europe. The company also formulates and develops enhanced pharmaceutical and biopharmaceutical products for itself and other organizations, including bioavailability enhancement of drugs with poor solubility, custom release profiles and taste-masking/orally disintegrating tablet formulations.
“Aptalis is an excellent strategic and financial fit for Forest because of its strong product offerings in two therapeutic franchises that are complementary to Forest—GI in the U.S. and Canada, and cystic fibrosis in Europe. The acquisition of Aptalis helps diversify Forest while advancing our strategy to create blockbuster therapeutic areas,” said Brent Saunders, CEO and president of Forest Laboratories, commented in a statement. “Because there is such a strong fit, we expect to grow the sales of products from both Forest and Aptalis while realizing $125 million in cost synergies from combining the two companies. As a result, the acquisition is expected to add nearly $700 million in revenue and approximately 78 cents to our non-GAAP EPS in FY2015.”
The transaction is expected to close in the first half of this year and is subject to regulatory review and customary closing conditions. Forest engaged Debevoise & Plimpton LLP and Cleary Gottlieb Steen & Hamilton LLP as its legal counsel for this transaction, with Morgan Stanley acting as its financial advisor. Aptalis brought on Ropes & Gray for its legal counsel, with J.P. Morgan Securities LLC serving as its financial advisor.