This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Deal: Actavis Extends Gains Following Warner Deal

NEW YORK ( TheDeal) -- Actavis Inc.'s $8.5 billion deal for specialty pharmaceutical company Warner Chilcott plc will serve to enhance the New Jersey drugmaker's revenue mix and balance sheet, and heighten its profile for future dealmaking, executives said on a conference call Monday.

Actavis added 2.3% on Tuesday to $130.08 while Warner jumped 3.8% to $20.34.

"It augments our specialty brand business in our core therapeutic market categories of women's health and urology, as well as expanding into the gastrointestinal sectors, new therapeutic qualities for us," Actavis CEO and president Paul Bisaro said on a conference call on Monday. "The combined company is going to be in the top 20 of global pharmaceutical companies in terms of sales with a substantial presence in both generics and brand products."

Before the deal, about 7% of Actavis' revenue came from branded specialty products; it mostly focused on generic drugs. Post-deal, about 25% of revenue will come from specialty products, according to comments on the call.

Higher revenue means increased cash flow and more access to financing for deals, Bisaro noted. "[The deal] creates a platform for further growth, and allows for substantial deleveraging of the new entity, so it enhances our borrowing capacity. The branded and generic mix allows us to become a more balanced revenue generator. Opportunities will be presented to us because of our size and scale."

After the purchase closes, Warner Chilcott holders would own about 23% of Actavis, which will take Warner Chilcott's Dublin headquarters and tax rate and rename itself Actavis plc.

Terms of the deal call for Parsippany, N.J.-based Actavis to pay 0.160 shares of its stock for each share of Warner Chilcott, valuing the target's shares at $20.08 apiece based on Actavis' May 17 close of $125.50. The deal offers a premium of 34% to Warner Chilcott's closing price on May 9, the day before the companies first disclosed they were in deal talks.

The target was partially held by private equity firms Thomas H. Lee Partners LP, Bain Capital LLC and CCMP Capital Advisors LLC. Warner Chilcott employs about 2,100 people, 1,500 of which are based in the U.S., Puerto Rico and Canada. The business also operates manufacturing facilities in Northern Ireland and Germany.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
WCRX $0.00 0.00%
ACT $0.00 0.00%
AAPL $93.74 0.00%
FB $117.58 0.00%
GOOG $693.01 0.00%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs