Perrigo acquires Rosemont Pharmaceuticals for $283 million

Rosemont is considered to be well positioned for future growth given its 'diverse product pipeline, relevant favorable demographics and export opportunities'

Jeffrey Bouley
ALLEGAN, Mich.—Perrigo Co.has note only just recently announced the signing of a definitive merger agreement but reported that it hascompleted the acquisition of Leeds, U.K.-based Rosemont Pharmaceuticals Ltd.  in a cash deal for £180 million, or about $283 million.
 
Foundedin 1967, Rosemont is a specialty and generic prescriptionpharmaceutical company focused on the manufacturing and marketing oforal liquid formulations. Rosemont's current portfolio consists of morethan 90 products and, according to Perrigo, "is well positioned for future growth given itsdiverse product pipeline, relevant favorable demographics and exportopportunities."
 
Rosemont's net sales during 2012 wereapproximately £40 million, or more than $60 million,with gross and operating margins similar to those of Perrigo's prescriptionpharmaceuticals segment, where Rosemont's results of operations will beincluded.
 
Key benefits of the transaction, according to Perrigo include:
  • Attractive Specialty Market: Rosemont's portfolio of liquid formulations addresses a criticalmedicinal need within pediatrics, as well as for those patients withdysphagia (swallowing difficulties), a common malady in a growingelderly population.
  • Immediate Access to Oral Liquid Formulations: The transaction is aligned with Perrigo's strategic growth objective toexpand into additional liquid categories and diversified prescriptionmedicines to further broaden its customer product portfolio.
  • Leadership Position in Sizeable and Growing Market: Favorable demographic drivers have been increasing demand for easier toswallow products. Rosemont's leading position in this market today,combined with its robust pipeline portfolio and access tounder-penetrated international markets, represents an excitingopportunity for future growth and European expansion.
  • Synergy Opportunity: Theacquisition allows Perrigo to expand its U.K. portfolio whileleveraging its established distribution and administrativeinfrastructures and long standing customer relationships.
"We continue to focus on expanding our international footprintand view the acquisition of Rosemont as an opportunistic next step givenour existing presence in the U.K.," said Joseph C. Papa, the chairman, president and CEO of Perrigo. "Similar to Perrigo's position in theniche U.S. extended topical generic prescription market, Rosemont is the No. 1 player in the niche specialty U.K. oral liquid formulations market.We are excited to announce the acquisition of Rosemont and welcome itsmore than 200 employees to the Perrigo family. This transactionrepresents another step forward executing our strategy to make qualityhealthcare products more affordable for consumers around the world."
 
The acquisition of Rosemont is expected to be $0.08 accretive to adjusted EPS for the remainder of fiscal 2013, and approximately $0.04 to $0.07dilutive to GAAP EPS after the inclusion of estimates for intangibleamortization, transaction and integration related expenses.
 
Including this acquisition, Perrigo now expects fiscal 2013 reported earnings to be between $4.67 and $4.87 per diluted share as compared to $4.18 in fiscal 2012 and fiscal 2013 adjusted earnings to be between $5.53 and $5.73 per diluted share as compared to $4.99 in fiscal 2012.
 
Perrigo develops, manufacturesand distributes over-the-counter and generic prescriptionpharmaceuticals, infant formulas, nutritional products, pet health,dietary supplements and active pharmaceutical ingredients. The company's primary markets andlocations of logistics operations have evolved over the years to includethe United States, Israel, Mexico, the United Kingdom, India, China and Australia.


Jeffrey Bouley

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