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TheStreet Open House

Prestige Brands Acquires Insight for $750M

Stocks in this article: PBHVRXAGNZMH

NEW YORK (The Deal) -- Prestige Brands Holdings  (PBH) on Friday joined the pharmaceuticals merger stampede, announcing plans to acquire Trevose, Pa.-based feminine care product manufacturer Insight Pharmaceuticals in a deal valued at $750 million.

Insight sells Monistat brand over-the-counter yeast infection treatments, EPT brand home pregnancy tests and other related products. The company is owned by Swander Pace Capital and co-investment partner Ontario Teachers' Pension Plan, which purchased it from Allied Capital in 2009 for an undisclosed sum.

Tarrytown, N.Y.-based Prestige, a distributor of over-the-counter drugs and household cleaning products, said the Insight deal coupled with another small pending acquisition would create a company with pro forma annual Ebitda of $300 million on about $800 million in sales. Prestige earlier this month said it has a deal to acquire Hydralyte in Australia and New Zealand from the Hydration Pharmaceuticals Trust of Victoria, Australia.

The buyer said as part of the deal it will acquire tax attributes with a present value of about $100 million, lowering the effective purchase price to about $650 million.

Prestige is best known for its Chloraseptic and Luden's brand throat treatments, Clear Eyes eye care products and Beano gas prevention pills. The company also has a line of pediatric products, antacids, dental products and earwax removal tools.

Company CEO Matthew M. Mannelly in a statement said that the purchase will bring it close to its goal of generating $1 billion in annual sales from over-the-counter pharmaceuticals.

"The acquisition of Insight Pharmaceuticals will add the attractive new feminine care platform to the Prestige portfolio," he said. "We expect that our already industry-leading free cash flow and Ebitda margins will further strengthen as a result of the acquisition of Insight."

The deal caps an active week in healthcare M&A. On Monday, Valeant Pharmaceuticals International (VRX) teamed with activist Bill Ackman on a $45 billion hostile bid for Botox maker Allergan (AGN), while Novartis said it would take a host of oncology drugs from GlaxoSmithKline for $16 billion while selling other units to the British drugmaker. Medical device maker Zimmer Holdings (ZMH) on Thursday committed $13.35 billion to acquire Biomet.

Sawaya Segalas served as financial adviser to Prestige Brands on its purchase.

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