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Actavis to buy Forest Laboratories for $25 billion

Staff writer |
Actavis plc will acquire Forest Laboratories, Inc. 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)

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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.

"With this strategic combination, we create an innovative new model in specialty pharmaceuticals leadership, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development, and - most important - the ability to drive sustainable organic growth," said Paul Bisaro, chairman and CEO of Actavis.

"The combination of Actavis and Forest is expected to yield double-digit accretion to non-GAAP earnings in 2015 and 2016, with significant annual free cash flow generation of greater than $4 billion in 2015, enabling us to rapidly de-lever. The combination has the potential to realize approximately $1 billion in operating and tax synergies, before any manufacturing synergies or revenue synergies, while we anticipate continuing to invest over $1 billion per year in R&D."

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.


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