Hospira, Inc., a leading global hospital products company, has completed the acquisition of Mayne Pharma Limited, an Australia-based specialty injectable pharmaceuticals company.
Under terms of the agreement, Mayne shareholders will receive AUD$4.10 per common share for a total transaction value of AUD$2.6 billion (~US$2.1 billion), including options, a Hospira press release stated.
"We are excited and confident about the growth opportunities this acquisition presents for all of our stakeholders," said Christopher B. Begley, chief executive officer, Hospira. "As the world leader in specialty generic injectable pharmaceuticals, Hospira's increased scale will continue to help reduce the overall costs of healthcare -- to improve both the affordability of care for patients and the financial strength of the global healthcare system."
The addition of Mayne significantly expands Hospira's global footprint and doubles its international sales to nearly 30 per cent of Hospira's total sales. In addition, the acquisition is expected to:
Expand and solidify Hospira's oncology presence. Specialty oncology products represent roughly half of Mayne's portfolio, which boasts a comprehensive range of agents across this important and fast-growing therapeutic category. Fueled by a significant stream of patent expirations over the next several years, the oncology market is expected to grow faster than the aggregate generic injectables segment.
Provide Hospira with potent/cytotoxic manufacturing and research and development capabilities. Mayne's comprehensive and differentiated expertise in formulating and manufacturing potent and cytotoxic compounds supplements Hospira's broad development and manufacturing capabilities.
Continue to help reduce the overall costs of healthcare. By increasing the number of specialty generic injectable drugs in its portfolio and associated manufacturing efficiencies, Hospira will be better positioned to provide high-quality, less costly alternatives to many proprietary pharmaceuticals.
As part of Hospira's continued transformation into a high-performing global organization, the company is implementing a new leadership structure to foster a stronger global perspective, reinforce its connection to customers and establish a solid foundation for future growth.
The new structure includes the appointments of three regional presidents responsible for developing strategy, strengthening customer relationships, delivering growth and attaining market leadership in their various regions; and two presidents focused on the long-term growth, global business strategy and attainment of product leadership in key business areas. In addition, the newly created role of corporate vice president, Global Strategy and Business Development, is responsible for ensuring the strength and execution of global growth strategies in both core and new businesses.
"As a combined organization, we have some of the best talent in the industry," said Begley. "The union of Hospira and Mayne allows us to embrace the best attributes of both companies to create a workforce that is stronger than the sum of its parts."
Hospira continues to expect to generate a minimum of $50 million of annualized synergies in 2008 through infrastructure optimization as well as improved supply chain, administrative and other operational efficiencies. After giving effect to estimated synergies, the transaction is expected to be slightly accretive to earnings per share in 2007, excluding the impact of transaction-related expenses, such as purchase accounting charges and integration costs, and the amortization of intangible assets*. The impact on earnings per share, before the effect of transaction-related expenses*, is still estimated to be neutral in 2008. Hospira expects to provide more specific information on these financial impacts when it reports 2006 year-end results on Feb. 28, 2007.
To finance the acquisition, Hospira will use approximately $200 million in available cash and incur $1.9 billion of debt, with a $500 million term loan and a $1.4 billion bridge loan. Hospira expects to refinance the bridge loan through the issuance of bonds. Using Hospira and Mayne's strong combined cash flow, the company intends to pay down the debt as quickly as feasible.
Hospira, Inc. is a global specialty pharmaceutical and medication delivery company dedicated to Advancing Wellness by developing, manufacturing and marketing products that help improve the productivity, safety and efficacy of patient care.