GSK to sell some North American OTC drugs to Prestige Brands for $661 mn
21 December 2011
Global healthcare giant GlaxoSmithKline (GSK) today agreed to sell some of its North American non-core over-the-counter (OTC) drugs to Prestige Brands Holdings, for £426 million ($661 million) in cash.
GSK, the UK's largest pharmaceutical firm and the world's fourth-largest by revenue, is selling 17 OTC pharmaceutical brands sold in the US and Canada, including pain relievers BC, Goody's and Ecotrin, gastrointestinal brands Beano, Gaviscon, Phazyme, Tagamet and Fiber Choice, and the Sominex sleep aid brand.
The London-based company said that these brands generated sales of approximately £134 million in 2010 and £98 million in the first 9 months of 2011.
GSK will return £242 million net profit from the sale to shareholders from next year.
The deal is the biggest in its history for Irvington, New York-based Prestige, following the recent acquisitions of five brands from Blacksmith brands and Dramamine from Johnson and Johnson over the past year.
It said that its over-the-counter products will account for about 85 per cent of revenue, or about $500 million, and 90 per cent of profits once the deal is completed. The purchase will give new OTC drugs to compete in two new categories, adult aspirin-based analgesics and gastrointestinal.