Aspen Global Incorporated (Aspen Global), a wholly owned subsidiary of Aspen Holdings, has reached an agreement with GlaxoSmithKline plc (GSK) for the acquisition of a portfolio of 25 established pharmaceutical products which are distributed in Australia for approximately £172 million in cash.
The products comprise long established pharmaceutical brands of proven performance. The main areas of therapeutic treatment of the products are analgesic, antibiotics, anti-virals and the central nervous system. Other areas covered include anti-nauseant, anti-inflammatory and muscle relaxants. The leading products are well recognised brands including Amoxil, Augmentin, Imigran, Kapanol, Lamactil, Mesasal, Timentin, Valtrex, Zantac and Zofran.
The products which are the subject of the Transaction recorded revenue of AUD 127.4 million during the year ended 31 December 2011. During that period Valtrex came off patent and faced generic competition which has subsequently intensified. Some of the products have also been subject to the Australian Government’s mandatory annual price cuts based on competitive discounting to pharmacy. These price reductions are likely to continue resulting in the revenue expected to be generated by the products declining over time. The impact of these factors is illustrated by the products generating revenue in the six months to 30 June 2012 of AUD 47.4 million (six months to 30 June 2011: AUD 70.2 million).
The transaction is subject to the approval of the Australian competition authorities; and the approval of the Australian Foreign Investment Review Board.
The effective date of the transaction will be the last business day of the calendar month in which the last of the applicable conditions precedent is fulfilled.
Existing manufacturing arrangements for the products will be assumed by Aspen Global. Aspen Global intends to appoint Aspen Australia to distribute the products.
The transaction will be funded from new offshore debt facilities. Arrangements for the raising of the new debt have been settled, but remain subject to documentation being completed.
According to a Aspen press release, the products acquired through the transaction represent an excellent fit with the company’s existing portfolio and the added revenue will strengthen Aspen’s position as one of the leading pharmaceutical companies in Australia. Whilst the products received little promotional focus from GSK, Aspen is confident that it will be able to leverage its proven ability to reinvigorate older brands and the products’ considerable brand equity in order to enhance the value of the portfolio.
Aspen Global Incorporated is a subsidiary of Aspen Pharmacare Holdings Limited, a supplier of branded and generic pharmaceuticals in approximately 100 countries across the globe and of consumer and nutritional products in selected territories.