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. A Debevoise & Plimpton LLP team consisting of Andrew Bab, Gary Friedman, Pierre Maugue, Andrew Levine, Judith 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 Roh, Loretta Richard, Michael McFalls, Jay Kim, Alexander Zeltser and Christopher Green. JPMorgan 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.