Fresenius Kabi has set to acquire Akorn Inc., a US-based manufacturer and marketer of prescription and OTC pharmaceuticals products, for a consideration of US $4.3 billion, plus $450 million of net debt. Further, it is also acquiring Merck's biosimilars business, for Euro 670 million.
Stephan Sturm, CEO of Fresenius, said: “From a position of strength, Fresenius Kabi enhances and complements its business with two major steps. Akorn is an excellent strategic fit for Fresenius Kabi. The company’s product portfolio is highly complementary to our well-developed generics business. The simultaneous entry into the biosimilars business is the right step into the right direction at the right time. The acquired biosimilars assets are an attractive opportunity for Fresenius Kabi to enter this strongly growing and highly profitable segment. Both acquisitions are milestones on Fresenius Kabi’s growth path for this decade and beyond.”
Akorn produces and markets a diverse product portfolio of injectales, topical creams, ointments and gels, sterile ophthalmics, as well as oral liquids, otic solutions (for the ear), nasal sprays and respiratory drugs. Akorn products are sold in retail pharmacies and directly to physicians, in addition to hospitals and clinics – almost exclusively in the US. Akorn participates in a total US market of app. $106 billion. Its current product pipeline of pending ANDAs has a total addressable IMS market value of $ 9.3 billion. The company employs more than 2,000 people and has three R&D centers and five manufacturing facilities in the US, Switzerland and India.
Mats Henriksson, CEO of Fresenius Kabi, said, “Bringing together our two companies and product portfolios will strengthen and diversify our business in the US.” The purchase price will be financed by a broad mix of Euro and Dollar denominated debt instruments.
In an another acquisition transaction of Merck's biosimilars business, which comprises the entire development pipeline and an experienced team of more than 70 employees located in Aubonne and Vevey, Switzerland, will be mainly cash flow financed. The purchase price will be up to Euro 670 million. Thereof, Euro 170 million will be paid in cash upon losing. App. Euro 500 million are milestone payments strictly tied to achievements of development targets. The total expected cash-out and self-imposed investment ceiling is estimated to be up to Euro 1.4 billion. Until projected EBITDA break-even in 2022.
Merck acquisition is subject to regulatory approvals and other customary closing conditions and is expected to in second half of 2017.
Mats Henriksson said, “Biosimilars are a fast-growing segment within the pharmaceutical market. Some of the largest biological branded products will go off patent over the next years. With this acquisition, Fresenius Kabi enhances its position as a leading player in the injectables pharmaceutical market and further diversifies its product portfolio. The acquisition creates a platform for further growth. “