Nichi-Iko Pharmaceutical Co., Ltd., a Japan-headquartered generic drug company, and Sagent Pharmaceuticals, Inc. have entered into a definitive merger agreement under which Nichi-Iko will acquire Sagent via an all-cash tender offer followed by a second-step merger, for a total consideration of approximately $736 million.

The proposed deal enhances Nichi-Iko’s platform in the US market to commercialize its biosimilar product pipeline and increase its presence in injectables. Through the acquisition, Nichi-Iko will raise its profile in the domestic and international generics market and advance the company’s goal of becoming a pop 10 global leader in generics.

Sagent will benefit from Nichi-Iko’s portfolio of biosimilars under development and injectable products. The deal will also give Sagent access to Nichi-Iko’s manufacturing infrastructure. No changes to Sagent’s current operations are currently anticipated, and Nichi-Iko expects that Sagent’s current management team will continue to lead Sagent from its headquarters in Schaumburg, Illinois.

The merger agreement contemplates an all cash tender offer for $21.75 per share, followed by a second-step merger in which all outstanding shares of Sagent common stock not tendered in the tender offer will be converted into the right to receive the same amount, in cash equal to the tender offer price. Nichi-Iko has formed an acquisition subsidiary (the “Offeror”) in the US to make the tender offer. Following completion of the tender offer, the Offeror will merge with and into Sagent, with Sagent as the surviving company. As a result of the merger, Sagent will become a wholly owned subsidiary of Nichi-Iko. The tender offer will be subject to the US securities laws and applicable US state laws.

The acquisition is subject to the satisfaction of customary conditions, including the valid tender of a majority of the outstanding Sagent shares on a fully diluted basis and the expiration or earlier termination of the Hart-Scott-Rodino waiting period.

Headquartered in Tokyo and Toyama Prefecture, Nichi-Iko Pharmaceutical Co., Ltd. is the largest generic drug manufacturer in Japan by sales, according to the company. It had consolidated net sales in the fiscal year ended March 31, 2016 of JPY 143.5 billion ($1.35 billion). It has more than 1,000 commercialized products. Nichi-Iko’s development has been enhanced by six acquisitions and nine business alliances since the appointment of current President & CEO Yuichi Tamura in 2000.

Nichi-Iko employs 1,142 people and operates seven production sites, one R&D facility, and four distribution centers throughout Japan.

Source: Sagent Pharmaceuticals