Impax Laboratories Inc. has agreed to acquire Tower Holdings, Inc., including operating subsidiaries, CorePharma LLC and Amedra Pharmaceuticals LLC, and Lineage Therapeutics Inc. for $700 million in cash, subject to certain customary purchase price adjustments. The privately held companies being acquired specialize in the development, manufacture, and commercialization of generic and branded pharmaceutical products.

Impax expects that the transaction will provide Impax with a commercialized portfolio of products that are expected to generate full-year 2014 revenues of approximately $215 million to $225 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $80 million to $85 million on a standalone basis.

“This transaction is an important step forward in executing our plan to drive growth and create value through strategic acquisitions that enhance our existing strategies,” said Fred Wilkinson , president and chief executive officer of Impax, in a company statement. “The companies will add a growing, highly profitable, commercial portfolio of generics as well as a lead product in a new brand franchise, which will enhance our brand division and enable us to utilize our brand commercial infrastructure more efficiently. The acquisition also adds a branded and generic pipeline that includes a number of near-term opportunities. In addition, Impax will gain an established campus in New Jersey focused on R&D, manufacturing, packaging, and supply-chain management. Further, this accretive transaction will move Impax to a more efficient capital structure, while also preserving our ability to pursue additional external strategic growth opportunities.”

A key product from Amedra Pharmaceuticals is Albenza (albendazole), a niche product used to treat  invasive tapeworm infections. On the generics side, Impax will acquire five approved generic products not yet marketed, 11 applications pending approval, and more than 35 additional products in various stages of development.  According to IMS Health as reported by Impax, this pipeline of 50 plus products represents approximately $10.7 billion in US brand and generic sales for the last 12 months ended August 2014. The transaction will also provide Impax with a Drug Enforcement Agency and US Food and Drug Administration licensed manufacturing, packaging, and warehousing campus in Middlesex, New Jersey.

Impax expects to achieve operational synergies of more than $10 million within the first year after the transaction closes. Savings are expected to come largely from research and development efficiencies, prioritization of the combined portfolio, and reduced selling, general and administrative expenses. Impax intends to fund the acquisition through a combination of approximately $270 million of cash on hand and a new $430 million term loan pursuant to a commitment from Barclays. The transaction is expected to close within the next six months, subject to the satisfaction of customary closing conditions and regulatory approvals, including antitrust approvals in the US.

Source: Impax Laboratories