Impax Laboratories Inc (NASDAQ:IPXL) is splashing out $586mln on a portfolio of generic drugs from Israel’s Teva Pharmaceutical and Ireland’s Allergan PLC (NYSE:AGN).
Impax’s shares slipped almost 8% after the company said it would be taking out loans of up to $400mln to help pay for the cash purchase.
The acquisition will give it 15 currently marketed generic products, plus one product that has been approved for commercial launch and two more yet-to-be launched approved strengths of a currently marketed product.
Impax said the acquisition would provide it with a profitable and growing commercialised portfolio of products.
The acquired marketed generic products generated around $150mln in net sales and some $100 million in gross profit in 2015.
The aggregate purchase price of $586 million for the portfolio of products will be funded with existing cash and $400 million in new fully committed term loans.
“Following the completion of this acquisition, we will continue to have an efficient capital structure with our net debt to trailing 12 months adjusted pro-forma EBITDA [underlying earnings] ratio of approximately 2.1 times," said Fred Wilkinson, who is president and chief executive officer of Impax.
"We will be well positioned to continue to invest in organic growth as well as judiciously pursue strategic business development and merger and acquisition opportunities that can strengthen our portfolio and create long-term stockholder value," Wilkinson added.
Teva is in the process of acquiring Allegan, and the two companies have been ordered by the Federal Trade Commission to get shot of some the US generics businesses of Allergan in order not to fall foul of monopoly concerns.