Perrigo Snatches Up Omega Pharma NV For $4.5 Billion

Perrigo Company Snatches Up Omega Pharma NV For $4.5 Billion

November 6, 2014

By Mark Terry, Breaking News Staff

Irish firm Perrigo Company plc announced today that it will acquire Belgium-based Omega Pharma NV for $4.5 billion.

Perrigo develops, manufactures and distributes over-the-counter and generic prescription drugs, nutritional products and active pharmaceutical ingredients. Omega is an over-the-counter healthcare company that operates in 35 countries across Europe and certain emerging markets.

Over the last 12 months Omega has reported about $1.6 billion in revenue. One of its lead products is Tysabri, a treatment for multiple sclerosis. It has a portfolio of approximately 2,000 products for colds and coughs, skin care, pain management, weight management and gastrointestinal problems.

“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 Joseph Papa, chairman, president and CEO of Perrigo in a statement. “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.”

The transaction is expected to accelerate Dublin-based Perrigo’s international growth strategy, strengthen its product portfolio while also improving scale and distribution, and expand the company’s international management capabilities. It also improves and diversifies Perrigo’s financial profile.

“Since our founding in 1987, we have been relentlessly executing our pharmacist-focused growth strategy across Europe,” said Omega Founder and CEO Marc Coucke in a statement. “We have successfully developed a top OTC product portfolio and a leading European commercial infrastructure. This is an exciting time in the history of our company. My continued ownership investment demonstrates my confidence in the potential for the combined company. Together, we will have a substantially broader product portfolio with established global platforms and commercial channels to better serve our customers and patients.”

The deal is a mix of cash and equity valued at $4.5 billion. Perrigo will purchase Omega’s equity for €2.48 billion and take on €1.1 billion in debt. Twenty-five percent of the equity purchase price will be funded by Perrigo stock, about 5 million shares, going directly to Coucke, and 75 percent will be funded via a combination of cash and debt. J.P. Morgan Chase Bank, N.A. and Barclays have provided Perrigo with a €1.75 billion bridge. The transaction has been unanimously approved by both companies’ boards and is expected to close in the first quarter of 2015.

“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,” said Papa in a statement. “Together, our combined company will have an even larger product portfolio, broader geographic reach and enhanced scale.”

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