Perrigo snags Omega Pharma for $4.5B

Perrigo expects the transaction to be immediately accretive to adjusted EPS, with double- digit accretion in fiscal year 2016

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DUBLIN, Ireland—Perrigo Company plc and Omega Pharma NV, one of Europe's largest over-the-counter healthcare companies, have announced a definitive agreement under which Perrigo will acquire Omega for €3.6 billion ($4.5 billion). The deal price comprises the purchase of Omega's equity for €2.48 billion and the assumption of €1.1 billion in debt. Both companies' boards of directors have unanimously approved the transaction, which is subject to customary closing conditions and regulatory approvals. The deal is expected to close in the first quarter of next year, and is the largest for Perrigo since its 2013 acquisition of Elan for $8.6 billion.
"Since our founding in 1987, we have been relentlessly executing our pharmacist-focused growth strategy across Europe. We have successfully developed a top OTC product portfolio and a leading European commercial infrastructure,” Marc Coucke, Omega founder and CEO, said in a press release. “This is an exciting time in the history of our company. My continued ownership investment demonstrates my confidence in the potential for the combined company. Together, we will have a substantially broader product portfolio with established global platforms and commercial channels to better serve our customers and patients."
Omega has its headquarters in Nazareth, Belgium, with a commercial presence in 35 countries. The company saw roughly $1.6 billion in revenue for the 12 months ended September 30, 2014, and has a portfolio that consists of approximately 2,000 products. Over the last five years, Omega saw compound annual revenue growth of approximately 10 percent. Through this deal, Perrigo will gain some 2,500 employees, which includes a sales team of roughly 1,100 people.
"The combination of these two great companies accelerates Perrigo's international growth strategy, substantially diversifies our business streams and establishes a durable leadership position in the European OTC marketplace," commented Joseph C. Papa, chairman, president and CEO at Perrigo. "We believe this strategic transaction will enhance shareholder value by further strengthening our industry-leading revenue and cash flow growth profile and by expanding market opportunities. Omega brings a leading OTC product portfolio, European capabilities and a highly experienced management team to support Perrigo's continued growth.
Papa continued, "Our strong financial performance and operational structure have enabled the continued growth and globalization of our business model with Ireland as our gateway for this expansion. Together, our combined company will have an even larger product portfolio, broader geographic reach, and enhanced scale."
According to Perrigo, some of the key benefits of this transaction are that it accelerates international growth strategy, is financially compelling, expands international management capabilities and strengthens the company's product portfolio while enhancing scale and distribution. Perrigo expects the transaction to be immediately accretive to adjusted earnings per share, with double-digit accretion in fiscal year 2016. The deal is also expected to be accretive to Perrigo's standalone revenue and adjusted operating income growth rates and cash flow generation.
SOURCE: Perrigo Company press release

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