Date: 2014-02-18
Type of information: Company acquisition
Acquired company: Forest Laboratories (USA - NJ)
Acquiring company: Actavis (Ireland)
Amount: $25 billion
Terms: * On February 18, 2014, Actavis and Forest Laboratories announced that they have entered into a definitive agreement under which Actavis will acquire Forest for a combination of cash and equity valued at approximately $25 billion or $89.48 per Forest share ($26.04 in cash and 0.3306 Actavis shares for each share of Forest common stock). The per share consideration represents a premium of approximately 25 percent per share over Forest\'s stock price, and a premium of approximately 31 percent over Forest\'s 10-day volume weighted average stock price, as of the close of trading on February 14, 2014. If successfully completed, the transaction will combine two of the world\'s fastest-growing specialty pharmaceutical companies, with combined annual revenues of over $15 billion anticipated for 2015. On a pro forma combined basis for full year 2014, the combined company will have an approximately $2 billion CNS franchise; Gastroenterology (GI) and Women\'s Health franchises valued at approximately $1 billion each; a Cardiovascular franchise that generates approximately $500 million; and Urology and Dermatology/Established Brand franchises approaching $500 million a year in sales each. The combined company will be led by Paul Bisaro, Chairman and CEO of Actavis plc. The integration of the two companies will be led by the Actavis and Forest senior management teams, with integration planning expected to begin immediately in order to assure a rapid transition to a single company following close. Actavis has agreed that three members of the Forest Board of Directors will be named to the Actavis Board of Directors following the close. In the proposed transaction, shareholders of Forest will receive 0.3306 shares of ACT common stock and $26.04 in cash for each share of Forest. The transaction will include an election mechanism for Forest shareholders to elect all-stock or all-cash consideration, subject to proration in accordance with the terms of the merger agreement. The stock component of the consideration is expected to represent a tax-free exchange. The aggregate purchase consideration represents a premium of approximately 25 percent above the closing price of Forest shares on February 14, 2014. Forest shareholders are expected to own approximately 35% of the combined company on a pro forma basis. Greenhill & Co. is serving as financial advisor to Actavis, and Latham & Watkins LLP is serving as Actavis\' legal advisor. J.P. Morgan is serving as financial advisor to Forest, and Wachtell, Lipton, Rosen & Katz is serving as Forest\'s legal advisor. The proposed transaction has been unanimously approved by the Boards of Directors of Actavis and Forest, and is enthusiastically supported by the management teams of both companies. The transaction is subject to the approval of the shareholders of both companies, as well as customary regulatory approvals, including a Hart-Scott-Rodino review in the United States.
Details: The combined company will have investment in new product development in excess of $1 billion on an annual basis. The combination of Actavis and Forest will add more than a half dozen near- and mid-term R&D products to Actavis\' robust development portfolio. Five Forest products are at the NDA stage of development, including treatments for Alzheimer\'s disease, cardiovascular disease, infectious disease, as well as schizophrenia and bipolar disorders and treatments for COPD.
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