Perrigo to acquire infant formula maker PBM Holdings for $808 million

Manufacturer and distributor of over-the-counter (OTC) and prescription drugs, Perrigo Company, yesterday ehterd into a deal to acquire infant formula manufacturer PBM Holdings Inc for approximately $808 million in cash.

Gordonsville, Virginia-based privately-held PBM Holdings is the world's largest manufacturer and marketer of infant formulae. It also specialises in manufacturing, distributing, and marketing consumer food, nutritional, and pharmaceutical products.

PBM's OTC store brand infant formula and baby foods are sold by leading retailers in the US, Canada, Mexico and China.

With 2009 revenues of $2 billion, Michigan-based Perrigo is the world's largest manufacturer of OTC pharmaceutical products for the store brand market. The company's primary markets and manufacturing locations are the US, Israel, Mexico and the UK.

Under the deal, Perrigo will acquire all the shares of PBM Holdings for $808 million in cash but not assume any of PBM's debt.

Perrigo intends to fund the transaction with $175 million of cash on hand and $300 million available under the terms of its existing debt agreements. The balance is expected to be raised through one or more sources of new debt financing.