German healthcare giant Fresenius to buy US generic drugmaker Akorn for $4.75 bn

25 Apr 2017


German healthcare giant Fresenius SE & Co KGaA today struck a deal to buy US generic drugmaker Akorn Inc for $4.75 billion (€4.37 billion).

The move comes seven months after Fresenius acquired Spain's private hospital chain Quironsalud for €5.8 billion ($6.14 billion), including debt.

In a separate deal, Fresenius said that it will acquire Merck KGaA's biosimilars business, which focuses on oncology and autoimmune diseases, for €670 million.

Early this month, Fresenius said that it is in talks to buy Akorn, but cautioned that ''there can be no assurance any transaction will result from these discussions.'' (See: Fresenius in talks to buy US generic drugmaker Akorn)

Under the terms of the Akorn acquisition, Fresenius's Kabi unit will pay $34 per share and take on Akorn's net debt of about $450 million for a total of $4.75 billion

Fresenius plans to fund the transaction through a broad mix of euro-and dollar-denominated debt instruments.

For the period from 2018 to 2022, Fresenius Kabi expects integration costs of around $140 million before tax, and generate cost and growth synergies of approximately $100 million annually before tax.

''Bringing together our two companies and product portfolios will strengthen and diversify our business in the US,'' said Mats Henriksson, CEO of Fresenius Kabi.

''Akorn brings to Fresenius Kabi specialised expertise in development, manufacturing and marketing of dosage forms currently not available in our portfolio, as well as access to new customer segments and products. Akorn's pipeline is impressive, with approximately 85 ANDAs filed and pending with the FDA and dozens more in development,'' he added.

Akorn, which has a market cap of about $3.7 billion, is a niche pharmaceutical company that develops, manufactures and markets generic and branded prescription drugs as well as animal and consumer health products.

It specialises in difficult-to-manufacture sterile and non-sterile dosage forms including, ophthalmics, injectables, oral liquids, otics, topicals, inhalants, and nasal sprays.

The Illinois-based company markets its products to retail pharmacies, ophthalmologists, optometrists, physicians, veterinarians, hospitals, clinics, wholesalers, distributors, group purchasing organisations, and government agencies  – almost exclusively in the $106 billion US market.

Akorn's current product pipeline of pending ANDAs (Abbreviated New Drug Approvals) has a total addressable IMS market value of $9.3 billion.

Akorn has three R&D centers and manufacturing facilities in the US, India, and Switzerland.

Founded in 1912, Fresenius is a diversified medical equipment company that provides products and services for dialysis, hospitals as well as inpatient and outpatient medical care.

The Hamburg-based company focuses on hospital management as well as on engineering and services for medical centres and other health care facilities.

With activities spanning about 100 countries on six continents, the company employs over 230,000 people and has annual revenue of over €29 billion.

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