Japanese generic drug maker Sawai Pharmaceutical Co Ltd is making its first overseas acquisition by offering to buy its US peer Upsher-Smith Laboratories Inc from its parent, Acova Inc., for $1.05 billion.
Sawai plans to fund the deal through bank loans and cash on hand.
Post closing, Upsher-Smith's non-generic pharmaceuticals businesses will remain with Acova.
Upsher-Smith is a privately-held company, owned by the Evenstad family through their company Acova and is run by CEO, Mark Evenstad and his father, chairman Ken Evenstad .
Founded in 1919 by pharmacist, Frederick Alfred Upsher Smith, has a diversified product portfolio of over 30 pharmaceutical products, mainly oral solid preparations, and a strong pipeline of over 30 products.
Upsher-Smith is based in Minneapolis, Minnesota, and also has offices in Denver, Colorado, and Morristown, New Jersey, and a research facility in Cambridge, UK.
Sawai plans to build a US business that leverages its intellectual property and combines R&D capabilities with Upsher-Smith's manufacturing base, strong distribution network, established commercial relationships and highly respected brand.
For Upsher-Smith, the acquisition brings access to Sawai's state-of-the art manufacturing technology and opportunities to bring its medicines to new markets like Japan.
In 2015 the Japanese government set a target of raising the share of generic prescriptions to 80 per cent by fiscal 2020 to cater to an ageing Japanese population and the increasing focus on bringing down the cost of medicines.
''Upsher-Smith has developed and delivered crucial therapies to patients, from infants to the elderly, with a broad array of on-market generic pharmaceuticals. We have also built a pipeline that will enable even more patients to get life-changing therapies over the next several years,'' said Mark Evenstad, CEO.
''We are delighted to sign this agreement today with ACOVA to acquire Upsher-Smith, which is our first overseas investment. Upsher-Smith, like Sawai, has a long history as a private family-owned generic pharmaceuticals company that is also focused on patient needs, centered on our philosophy of ''Patients First'', said Sawai president, Mitsuo Sawai.
Founded in 1929 and based in Osaka, Sawai is a privately-owned generic drug maker with around 680 ethical pharmaceutical drugs for the treatment in cardiovascular, antihyperlipidemic agents, diabetes, as well as OTC drugs.