LONDON Reckitt Benckiser (RB.L) on Monday said it had agreed to buy U.S. drugs group Adams ARXT.O for $60 a share in cash, or $2.3 billion (1.1 billion pounds) in total, to mark its entry in the U.S. healthcare market.
Adams Respiratory Therapeutics Inc is a NASDAQ listed specialty pharmaceutical group headquartered in Chester, New Jersey, and markets two non-prescription or over the counter (OTC) cough treatments, Mucinex and Delsym, in the U.S.
"It will provide Reckitt Benckiser an entry into healthcare in the USA, the world's largest OTC market," said Reckitt's Chief Executive Officer Bart Becht said in a statement.
He expects the deal to enhance earnings immediately, excluding a $60 million one-off restructuring charge, while he see substantial cost synergies from integrating Adams.
After these cost savings, the operating margins on the Adams business are expected to be similar to Reckitt's existing consumer healthcare business, the group said.
Adams sales have grown to $332 million in the year to June 2007 from $14 million some four year before. Income before income taxes for the year ending June 2007 was $48 million.
"The growth potential of the business, the importance of gaining an entry in the USA healthcare market, and the synergies available make Adams a very attractive addition to our portfolio," Becht said.
Reckitt shares were up 1.2 percent at 29.58 pounds by 12:55 p.m., while Adams shares closed at $43.68 on Friday.
(Editing by Paul Bolding)