(Adds analyst comment)
Jan 8 Drugmaker Forest Laboratories Inc
said it would buy specialty pharmaceutical maker Aptalis from
private equity firm TPG Capital for $2.9 billion in a deal it
promised would increase next year's earnings, sending its shares
up nearly 14 percent.
Forest, which is facing patent expirations on several of its
biggest drugs, said on Wednesday that Aptalis would add 78 cents
per share to fiscal 2015 earnings before special items. The deal
will also boost revenue by $700 million, it added.
Analysts had been expecting a profit of $2.86 per share and
revenue of $2.9 billion for the year ending March 2015,
according to Thomson Reuters I/B/E/S.
Aptalis has a number of drugs to treat cystic fibrosis and
gastrointestinal disorders. Forest's portfolio includes
gastrointestinal and respiratory treatments.
The deal comes after activist investor Carl Icahn pressured
Forest for change and threatened a proxy fight. Long-time Chief
Executive Officer Howard Solomon in May said he would retire and
was replaced this fall by former Bausch & Lomb CEO Brenton
"Investors will likely see this as the new CEO executing on
his 'change agent' mandate," BMO Capital Markets analyst David
Maris said in a research note.
Saunders said in a statement that Aptalis would be
complementary to Forest because of its gastrointestinal therapy
business in the United States and Canada and cystic fibrosis
products in Europe.
He expects $125 million in cost savings from combining the
Forest expects the deal, which is subject to regulatory
review, to close in the first half of this year.
TPG Capital had been trying to sell Aptalis and last year
held talks with Forest and other companies, including Elan Corp,
which is now part of Perrigo Co, and Sun Pharmaceutical
Industries, Reuters previously reported. The talks with
Forest were put on hold with the announcement of Solomon's
retirement but resumed after Saunders took over.
TPG also made plans for an initial public offering of the
Bridgewater, New Jersey-based company in case a deal did not
Forest was advised by Morgan Stanley and by law firms
Debevoise & Plimpton LLP and Cleary Gottlieb Steen & Hamilton.
Aptalis was advised by JP Morgan Securities and law firm
Ropes & Gray.
Forest shares were up 13.6 percent at $66.78 in early
(Reporting by Caroline Humer in New York and Esha Dey in
Bangalore; Editing by Jeffrey Benkoe and Lisa Von Ahn)