September 8, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Canadian company Concordia Healthcare , headquartered in Oakville, Ontario, announced today that it is buying Amdipharm Mercury Limited (AMCo) from Cinven for $3.5 billion. Cinven is a European private equity firm. The deal will be a combination of cash, common shares of Concordia, and a performance-based earn-out payable in cash.
“This acquisition is a key milestone and pivotal turning point in Concordia’s strategy, which gives us the platform to take our business to the next level,” said Mark Thompson, Concordia’s chairman and chief executive officer in a statement. “We are not only acquiring products and commercial infrastructure, but a seasoned management team who has done a fantastic job of building a solid and successful international pharma operation. The combination of our highly complementary yet geographically diverse business is truly transformational.”
Amphidarm has a portfolio of more than 190 drugs in the areas of endocrinology, opthalmology and urology. When the deal closes in the fourth quarter of 2015, Cinven will hold 19.9 percent of Concordia’s shares. Concordia will expand its market to more than 100 countries.
Amdipharm, headquartered in London, was the result of a merger between Amdipharm and the Mercury Pharma Group. Cinven originally bought both in 2012 and merged the two companies a year later. It markets niche drugs under the brands Amdipharm, Mercury Pharma, Abcur and Focus. In 2014 it reported revenue of about $446 million.
Concordia focuses on legacy pharmaceutical products and orphan drugs. It markets Nilandron for prostate cancer, Lanoxin for mild-to-moderate heart failure, and Zonegran, for partial seizures in epilepsy. The company’s fiscal year ends in March. It reported $122.2 million in revenue for the 2015 fiscal year.
Concordia owns Concordia Pharmaceuticals Inc., U.S.-based Pinnacle Biologics Inc. and Complete Medical Homecare Inc., which focuses on home delivery of diabetic supplies, diabetic shoes and inserts, insulin pumps and diabetes drugs.
In its second quarter financial reporting on Aug. 13, Concordia Healthcare noted it had completed the acquisition of Covis Pharma and Covis Injectables for $1.2 billion. That acquisition included a portfolio of 12 branded products, 5 generic products and a product distributed by a third party in Australia.
“We are on track to achieving our targets, and have already exceeded our 2014 EBITDA levels within the first six months of this year,” said Thompson in a statement. “Our newly acquired Covis assets delivered impressive results this quarter, contributing almost $40 million to our top line with approximately ten weeks of consolidated sales. We believe these high-margin, branded pharmaceuticals and authorized generics, which address life threatening and other serious medical conditions, have room for continued growth.”
The acquisition of AMCo is being conducted with the assistance of Goldman, Sachs & Co., Credit Suisse, RBC Capital Markets and Jefferies and Co.. They have agreed to provide credit facilities and bridge commitments up to $4.3 billion (U.S.). The breakdown of the deal is $1.2 billion (U.S.) in total, with 8.49 million shares of Concordia stock worth approximately $0.7 billion (U.S.) and the assumption of about $1.4 billion (U.S.) AmCo net debt. There will be a maximum performance-based earn-out of about $220 million (U.S.) in the fourth quarter of 2016.
