Pfizer agreed to pay $90 per share for the Lake Forest, IL-based injectable drugs maker, a 39% premium on the stock's previous closing price of $64.80.
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Pfizer said that it plans to expand Hospira's international footprint with this deal. The purchase is the largest for the Viagra manufacturer since its $119 billion bid for AstraZeneca (AZN) was rejected last year.
The company said that it expects the purchase to add between 10 cents and 12 cents per share to its earnings in the first full year after the purchase closes.
Pfizer shares are up 3.06% to $33.05 in pre-market trading today.
TheStreet has further coverage of the deal here.
TheStreet Ratings team rates HOSPIRA INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate HOSPIRA INC (HSP) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, expanding profit margins and good cash flow from operations. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 13.3%. Since the same quarter one year prior, revenues rose by 14.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.10, which illustrates the ability to avoid short-term cash problems.
- Powered by its strong earnings growth of 9100.00% and other important driving factors, this stock has surged by 47.39% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HSP should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- 46.03% is the gross profit margin for HOSPIRA INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 13.78% is above that of the industry average.
- Net operating cash flow has significantly increased by 1356.88% to $158.80 million when compared to the same quarter last year. In addition, HOSPIRA INC has also vastly surpassed the industry average cash flow growth rate of -42.07%.
- You can view the full analysis from the report here: HSP Ratings Report