Sun Pharmaceutical to acquire Taro Pharma for $454 million

Sun Pharmaceutical Industries Ltd, together with its subsidiaries, has signed definitive agreements to acquire Taro Pharmaceutical Industries Ltd, a Pink Sheets multinational generic manufacturer.

The all-cash deal is subject to shareholder approval and requisite regulatory clearances.

Sun Pharma will fund the $454-million acquisition through internal accruals and proceeds from its earlier $350-million FCCB. The acquisition includes refinancing of $224 million of Taro''s net debt along with acquiring Taro''s equity for $230 million or $7.75 per share, which is at a 27 per cent premium to its 18 May, 2007, closing price of $6.10.

In addition, to providing immediate liquidity for Taro, sun will provide interim financing to the extent of $45 million.

Dilip Shanghvi, chairman and managing director, Sun Pharmaceuticals, stated, "We look forward to working with Taro and its employees going forward. This is a good opportunity for Sun and Taro to work together to create increasing value and add a complimentary multinational organization to Sun''s business. We intend to build on Taro''s expertise in dermatology and paediatrics, along with specialty and generic pharmaceuticals, and over-the-counter products. With the addition of 170 talented scientists to our team we look forward to increasing number of product filings of higher complexity."

Taro has established subsidiaries, manufacturing and products across the US, Israel, Canada. Its North American operations account for over 90 per cent of the company''s sales.