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TheStreet Open House

Watson To Acquire Actavis Group For EUR 4.25 Billion

PARSIPPANY, New Jersey, April 26, 2012 /PRNewswire/ --

 

- Creates 3 rd   largest global generics company -

- ~$8.0 billion anticipated pro forma combined revenue in 2012 -

- Significantly increases scale of Watson's ex-U.S. generic business -

- Accelerates revenue and earnings growth -

- Immediately accretive to non-GAAP earnings, before synergies -

- Greater than $300 million annual synergies anticipated within 3 years -

- Strong combined cash flow allows for rapid pay-down of debt -

- Additional earnout contingent on Actavis 2012 performance -

Watson Pharmaceuticals, Inc. (NYSE: WPI) and Actavis Group today jointly announced that Watson has entered into a definitive agreement to acquire privately held Actavis for approximately EUR4.25 billion upfront.  As a result of this acquisition, Watson will become the third largest global generics company with 2012 anticipated pro forma revenue of approximately $8 billion.

Actavis, which as a stand-alone company was positioned for strong growth, has a commercial presence in more than 40 countries and markets more than 1,000 products globally.  Actavis has approximately 300 projects in its development pipeline and manufactured more than 22 billion pharmaceutical doses in 2011.  Actavis has more than 10,000 employees worldwide and had 2011 revenues of approximately $2.5 billion.  

"The acquisition of Actavis will create the 3 rd largest global generics company, substantially completing Watson's expansion as a leading global generics company. Actavis dramatically enhances our commercial position on a global basis and brings complementary products and capabilities in the United States," said Paul M. Bisaro, President and CEO of Watson.

"In a single, commercially compelling transaction, we more than double Watson's international access and strengthen our commercial position in key established European markets as well as exciting emerging growth markets, including Central and Eastern Europe and Russia," Bisaro continued.  "The transaction achieves Watson's stated strategic objective of expanding and diversifying our business into a truly global company.  Once the transaction is completed, approximately 40% of our generic revenues will come from markets outside of the U.S."

"This transaction is financially compelling, accelerating Watson's top and bottom-line growth profile for the foreseeable future.  It will be immediately accretive to non-GAAP earnings before synergies, and we estimate that annual synergies of greater than $300 million can be achieved within three years.  Between now and closing, we will work closely with Actavis' management to prepare for a rapid and seamless integration so that Watson can maximize the benefits of this acquisition and capitalize on the significant potential to ensure long-term growth for our shareholders."

"Today marks a milestone in the history of Actavis.  For two years I have had the pleasure of working together with the newly formed Actavis management team and our stakeholders who have led the company into a new phase," said Claudio Albrecht, Executive Chairman and CEO of Actavis.  "We have successfully placed Actavis in a strong position to meet the future growth opportunities in the generic pharmaceutical industry."

"Building on this strong foundation, the combination of Watson and Actavis will result in a company of the size required to position itself as a strong player in the generic pharmaceutical industry.  The two companies are an ideal complementary fit that will enable the combined company to enhance its position among the industry leaders. Additionally, together Watson and Actavis will be well placed in the fast-paced and dynamic biosimilars market," Albrecht added.

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