Perrigo Agrees to Acquire Omega Pharma for $4.5 Billion

To build its over-the-counter (OTC) business in Europe, Perrigo has agreed to acquire Omega Pharma NV, an OTC healthcare company, headquartered in Nazareth, Belgium, for EUR 3.6 billion ($4.5 billion), comprised of the purchase of Omega’s equity for EUR 2.48 billion ($3.10 billion) and the assumption of EUR 1.1 billion ($1.4 billion) in debt. The transaction will be funded through a combination of cash, debt, and equity. Of the equity purchase price, 25% will be funded by Perrigo stock (approximately 5 million shares) placed directly to Omega founder Marc Coucke, and 75% funded through a combination of cash and debt.

“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,” said Perrigo Chairman, President and CEO Joseph C. Papa, in a company release. “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. 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.”

Perrigo, headquartered in Dublin, Ireland, develops, manufactures, and distributes over-the-counter (OTC) and generic prescription pharmaceuticals,nutritional products,and active pharmaceutical ingredients. Omega generated approximately $1.6 billion of revenue during the twelve months ended September 30, 2014, making it the fifth largest player within the European OTC market and the largest or second largest player in four individual European markets, according to information from Perrigo. Omega owns cough and cold, skincare, pain relief, weight-management, and  gastrointestinal treatment brands, among its portfolio of roughly 2,000 products. The company has delivered compound annual revenue growth of approximately 10% over the last five years and has a commercial presence in 35 countries. 

The deal has been unanimously approved by the respective boards of directors of Perrigo and Omega. The deal, subject to customary closings, is expected to close in the first quarter of 2015.

Source: Perrigo


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