This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
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
TheStreet Open House

The Deal: Forest Widens Business, Pays $2.9 Billion for Aptalis

Stocks in this article: FRX

NEW YORK (TheStreet) --  Forest Laboratories Inc. (FRX)  is shoring up its gastrointestinal business in the U.S. and gaining a cystic fibrosis business in Europe with the acquisition of private specialty drug company Aptalis Holdings Inc.

Forest said Wednesday it is paying global private investment firm TPG Capital LP $2.9 billion in cash for Bridgewater, N.J.-based Aptalis.

It said that it expects the deal to add nearly $700 million in fiscal 2015 revenue and to achieve $125 million in synergies by fiscal 2016.

"Aptalis is an excellent strategic fit with Forest," Brent Saunders, CEO and president of Forest, said in a conference call with investors. "Adding Aptalis products will diversify our offerings in key therapeutic areas," such as gastrointestinal in the U.S. and cystic fibrosis therapies in Europe and Canada.

Forest's gastrointestinal franchise is anchored by Linzess (linaclotide), a drug approved in the U.S. in 2012 for irritable bowel syndrome and chronic constipation in adults. Aptalis has GI products Pylera, Carafate and Canasa.

In the respiratory space, Forest offers Daliresp and Tudorza. Aptalis has three cystic fibrosis drugs: Zenpep, Ultresa and Viokace.

Aptalis posted adjusted Ebitda of $314.6 million on revenue of $687.9 million in fiscal year 2013, which ended in September. That's up from adjusted Ebitda of $244.9 million on $615.1 million in revenue in fiscal 2012.

Aptalis was known as Axcan Pharma Inc. when TPG took the company private in 2008 for $1.3 billion.

TPG reportedly had been shopping Aptalis and was looking to get more than $3 billion. Sun Pharmaceutical Industries Ltd. and Salix Pharmaceuticals were eyeing the company.

Aptalis filed in December to raise $500 million through an initial public offering to pay down debt. Forest is not taking any Aptalis debt in the deal.

Debevoise & Plimpton LLP team consisting of Andrew BabGary FriedmanPierre MaugueAndrew LevineJudith Church, Kristin Kiehn and Carl Riehl provided legal advice to Forest, along with Cleary Gottlieb Steen & Hamilton LLP.Morgan Stanley acted as financial adviser.

Ropes & Gray LLPs erved as legal counsel to TPG and Aptalis in the transaction. The team included William Shields, Patrick O'Brien, Michael RohLoretta RichardMichael McFallsJay KimAlexander Zeltser and Christopher GreenJPMorgan Securities LLP acted as financial advisers to Aptalis.

Forest shares were trading up $9.39, or 15.98%, at $68.15 Wednesday morning in New York.

--By Pamela Taulbee in New York.

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link 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

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, 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
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,387.21 -291.49 -1.65%
S&P 500 2,029.55 -27.54 -1.34%
NASDAQ 4,681.4970 -90.2660 -1.89%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs