Date: 2014-07-31
Type of information: Company acquisition
Acquired company: Rottapharm (Italy)
Acquiring company: Meda (Sweden)
Amount: SEK 21.2 billion (€2.275 billion)
Terms: * On November 6, 2014, Meda announced the final terms regarding the rights issue of approximately SEK 2 billion, in order to finance part of the acquisition of Rottapharm. Shareholders in Meda has preferential right to subscribe for one (1) new share of series A for each ten (10) shares held. The subscription price amounts to SEK 61 per share, corresponding to a maximum issue amount of approximately SEK 2,027 million. Record date for participation in the rights issue with preferential rights is 13 November 2014. The subscription period will run from 19 November 2014 up to and including 4 December 2014. Meda’s two largest shareholders, together representing approximately 30 percent of the votes and the capital in Meda, have severally agreed to subscribe for their respective pro rata shares of the offering. The rights issue is subject to approval by the Extraordinary General Meeting to be held today, 6 November 2014. The rights issue will increase Meda’s share capital by a maximum of SEK 33,224,306 from SEK 332,243,065 to no more than SEK 365,467,371 by an issue of no more than 33,224,306 new shares of series A in Meda. After the rights issue, the number of shares in Meda will be no more than 365,467,371 shares. * On October 10, 2014, Meda announced that the acquisition of the Italian specialty pharma company Rottapharm has been completed. The total purchase price amounts to SEK 21.2 billion. As part of the financing of the acquisition, the Board of Directors has resolved to, subject to the approval by an Extraordinary General Meeting, launch a rights issue of approximately SEK 2.0 billion with preferential rights for Meda’s shareholders. The Extraordinary General Meeting will be held on 6 November 2014. Complete terms and conditions of the rights issue, including subscription price, are expected to be announced no later than 6 November 2014. Subject to the approval of the rights issue by the Extraordinary General Meeting, the subscription period will run from 19 November up to and including 4 December 2014. * On July 31, 2014, Meda announced that it has entered into a definitive agreement to acquire Rottapharm, an Italian company owned by the Rovati family, for a consideration of SEK 21.2 billion (€2.275 billion) on a cash and debt free basis. The consideration will comprise SEK 15.3 billion (€1.643 billion) in cash, 30 million Meda shares corresponding to a value of SEK 3.3 billion (€357 million) and a non-contingent deferred payment in January 2017 of SEK 2.6 billion (€275 million). Following completion of the transaction, the Rovati family will own 9% of Meda. The transaction creates a preeminent branded specialty pharma business with pro-forma revenues of over SEK 18 billion in 2013 and good growth prospects. The transaction will comprise SEK 15.3 billion (€1.643 billion) in cash, 30 million Meda shares corresponding to a value of SEK 3.3 billion (€357 million) and a SEK 2.6 billion (€275 million) of non-contingent, deferred payment in January 2017, which totals SEK 21.2 billion (€2.275 billion) on a cash and debt free basis. The acquisition will be funded through a combination of new debt facilities, an equity issue with preferential rights to existing shareholders and payment in Meda shares. SEK 28 billion in bridge financing has been secured, which includes refinancing of Meda’s existing credit facilities. Take out financing is expected to be a combination of syndicated bank debt (SEK 26 billion) and an equity rights issue (SEK 2 billion). The payment in Meda shares, as mentioned above, corresponds to SEK 3.3 billion. The acquisition of Rottapharm must be reported to the competition authorities of multiple jurisdictions. Filings for gaining approvals will be initiated within days and the transaction is expected to complete in Q4 2014 following such clearances. Closing of the transaction is not subject to any other material conditions. The acquisition is expected to yield approximately SEK 900 million per annum of cost synergies, with full effect in 2016. Synergies are anticipated to be driven by efficiencies in sales and marketing, administration and research and development. There is an additional upside, outside of these areas, from selling Meda products in new geographic markets as well as repatriating certain licenses to Meda The acquisition is expected to be both EPS and Cash EPS accretive, in exce
Details: Rottapharm, headquartered in Monza, Italy, was founded by Professor Luigi Rovati in 1961 and has grown into a leading consumer healthcare focused branded specialty pharma company. The company combines Rx-reimbursed medications with more traditional consumer healthcare products, characterized by high scientific credibility (clinically-proven consumer healthcare products or Cx); these are high-margin, non-reimbursed, by doctors prescribed or recommended products with nearly no generic competition. Rottapharm has a global footprint with a presence in 90 countries worldwide and generated revenues of €536 million, of which 75% from Cx, with a gross margin of 67% and an adjusted EBITDA of €149 million implying a margin of 28% in 2013. Year-to-date trading as at June 30 showed sales growth excluding acquisitions of around 5%. Rottapharm's portfolio include brands, such as: Dona® (Cx), the original and global market leading glucosamine sulfate for osteoarthritis with strong sales in emerging markets such as Russia, China and Thailand ; Saugella® (Cx), a market leader in Italy, Germany and Taiwan for intimate feminine hygiene, to be launched in several other countries ; ArmoLIPID® (Cx), the leading nutraceutical in Italy for dyslipidemia management with a 60% market share, which was recently launched in a number of other countries, including Spain, Portugal, Belgium, Austria and Thailand ; Legalon® (Rx), used in the treatment of liver degenerative, inflammatory and fibrotic diseases. Legalon SIL is an injectable version of the medication indicated for mushroom intoxication and under study for prevention of recurrent hepatitis C in liver transplant patients. Meda’s global reach will be further supported by an enlarged business in Emerging Markets with sales of over SEK 3 billion (17% of pro-forma 2013 sales). This corresponds to an increase of around 50%Rottapharm’s presence, with its own sales forces, in Southeast Asia is particularly complementary to Meda, providing additional opportunities to sell Meda’s products in new geographic markets
Related: Specialty pharmaceuticals OTC
