Date: 2014-11-17
Type of information: Company acquisition
Acquired company: Allergan (USA - CA)
Acquiring company: Actavis (Ireland)
Amount: $ 66 billion (€ 52.7 billion)
Terms: * On June 15, 2015, Actavis announced that the company has adopted Allergan as its new global name and will begin trading under a new symbol — AGN — after ringing The Opening Bell at the New York Stock Exchange. The company name change follows the acquisition of Allergan in March 2015 and the approval of the name change by Actavis shareholders on June 5. The combination of Allergan and Actavis created one of the world's top 10 pharmaceutical companies by revenue and a leader in a new industry model – Growth Pharma. * On March 17, 2015, Actavis announced that it has completed the acquisition of Allergan in a cash and equity transaction valued at approximately $70.5 billion. The combination creates one of the world's top 10 pharmaceutical companies by sales revenue, with combined annual pro forma revenues of more than $23 billion anticipated in 2015. Actavis continues to expect the transaction to generate double-digit accretion to non-GAAP earnings within the first 12 months, including approximately $1.8 billion in operating and financial synergies to be realized within one year following the close. These synergies exclude any additional revenue or manufacturing synergies, and are in addition to the $475 million of annual savings previously announced by Allergan in connection with Project Endurance. Actavis further expects to generate strong operating cash flow in excess of $8 billion in 2016, which would enable the Company to rapidly de-lever the balance sheet. * On March 16, 2015, Actavis and Allergan announced that the companies received clearance from the European Commission for Actavis' pending acquisition of Allergan. Clearance by the European Commission satisfies the final regulatory condition to the closing of the pending acquisition, which remains subject to certain customary closing conditions and is expected to be effective on or around March 17, 2015. * On January 12, 2015, Actavis and Allergan announced that the U.S. Federal Trade Commission (FTC) has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act) with respect to Actavis' pending acquisition of Allergan. On December 1, 2014, Actavis and Allergan filed Pre-Merger Notification and Report Forms required under the HSR Act with the FTC. On December 29, 2014, Actavis voluntarily withdrew and subsequently re-filed these forms. The early termination of the waiting period under the HSR Act satisfies one of the conditions to the closing of the pending acquisition, which remains subject to other customary closing conditions, including receipt of shareholder and other regulatory approvals. Actavis and Allergan also announced that they have set the close of business on January 22, 2015 as the record date for determining the shareholders that will be entitled to vote at their respective special meetings of shareholders to be held in connection with the pending acquisition. The date, time and location of each company's special meeting will be set and announced at a later time. * On November 17, 2014, Actavis and Allergan announced that they have entered into a definitive agreement under which Actavis will acquire Allergan for a combination of $129.22 in cash and 0.3683 Actavis shares for each share of Allergan common stock. Based on the closing price of Actavis shares on November 14, 2014, the transaction is valued at approximately $66 billion, or $219 per Allergan share. The combination will create one of the top 10 global pharmaceutical companies by sales revenue, with combined annual pro forma revenues of more than $23 billion anticipated in 2015. The transaction has been unanimously approved by the Boards of Directors of Actavis and Allergan, and is supported by the management teams of both companies. Actavis anticipates that the expected permanent financing structure, consisting of a combination of new equity and debt, will support an investment grade rating and provide long-term financing flexibility. The combined company will be led by Brent Saunders, CEO and President of Actavis, and Paul Bisaro will remain Executive Chairman of the Board. The integration of the two companies will be led by the senior management teams of both companies, with integration planning to begin immediately in order to transition rapidly to a single company. Additionally, two members of the Allergan Board of Directors will be invited to join the Actavis Board of Directors following the completion of the transaction. Actavis projects that the transaction will generate at least $1.8 billion in annual synergies commencing in 2016, in addition to the $475 million of annual savings previously announced by Allergan in connection with Project Endurance. Actavis also plans to maintain annual R&D investment of approximately $1.7 billion, ensuring the appropriate resource allocation to continue driving exceptional organic growth. The company will have approximately $5 billion in pro forma 2015 international revenue. Together Actavis and Allergan will have a commercial presence across 100 markets, including an enhanced presence across Canada, Europe, Southeast Asia and Latin America and a strong footprint in China and India. Actavis anticipates that the permanent financing structure, expected to include a combination of equity and debt, will support an investment grade rating and provide long-term financing flexibility. Actavis expects to finance the cash portion of the consideration with a combination of new senior unsecured notes, term loans and equity securities. The company has committed bridge facilities from JP Morgan Chase Bank, N.A., Mizuho Bank and Wells Fargo and commitments to replace its existing facilities to the extent they are not amended to permit the acquisition and the related financing. The transaction is not subject to a financing condition. The transaction is subject to the approval of the shareholders of both companies, as well as customary antitrust clearance in the U.S., the EU and certain other jurisdictions, and is anticipated to close in the second quarter of 2015. J.P. Morgan is serving as exclusive financial advisor to Actavis and Cleary Gottlieb Steen & Hamilton LLP is serving as Actavis' lead legal advisor. Goldman, Sachs & Co. and BofA Merrill Lynch are serving as financial advisors to Allergan. Latham & Watkins, Richards, Layton & Finger, P.A. and Wachtell, Lipton, Rosen & Katz are serving as legal counsel to Allergan.
Details: The addition of Allergan's portfolio, including multiple blockbuster therapeutic franchises, doubles the revenues of Actavis' North American Specialty Brands business. On a pro forma basis for full year 2015, the combined company will have three blockbuster franchises each with annual revenues in excess of $3 billion in Ophthalmology, Neurosciences/CNS and Medical Aesthetics/Dermatology/Plastic Surgery. The specialty product franchises in Gastroenterology, Cardiovascular, Women's Health, Urology and Infectious Disease treatments will have combined revenues of approximately $4 billion. Allergan's blockbuster franchises in Ophthalmology, Neurosciences, and Medical Aesthetics/Dermatology/Plastic Surgery will complement Actavis' existing blockbuster CNS, Gastroenterology and Women's Health franchises to create a leading portfolio across a broad range of therapeutic areas.
The companies' combined U.S. sales force will have extraordinary marketing reach and increased relevance with more than a dozen medical specialists, including primary care physicians, ophthalmologists, optometrists, dermatologists, aesthetic physicians, plastic surgeons, neurologists, psychiatrists, infectious disease specialists, cardiologists, pulmonologists, gastroenterologists, OB-GYNs and urologists.
The combined company will provide a strong commitment to R&D, with an exceptional level of annual investment of approximately $1.7 billion, focused on the strategic development of innovative and durable value-enhancing products within brands, generics, biologics and OTC portfolios.
The combination is expected to add approximately 15 projects in near- and mid-term development to Actavis' robust development portfolio.
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