Download Actavis-Forest Laboratories Transaction Overview

Actavis-Forest Laboratories Transaction Overview
Actavis entered into a definitive agreement to acquire Forest Laboratories,
Inc. for $25 billion. Shareholders of Forest will receive .3306 shares of
Actavis common stock and $26.04 in cash for each share of Forest
including an election mechanism for Forest shareholders to elect an allstock or all-cash consideration. The ratio will be 70/30 equity and cash split,
the cash portion will be funded through existing cash and new debt. This is
Actavis’ biggest deal ever and is expected to close on or before December
17, 2014.
Deal Highlights
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Forest Laboratories, Inc.
A branded specialty pharmaceutical company that develops, manufactures, and
sells branded forms of ethical drug products in the US and Europe. Forest
Laboratories’ 14 main drugs in its portfolio treat diseases and ailments ranging
from depressive disorders to Irritable Bowel Syndrome, sever dementia,
fibromyalgia, schizophrenia, and urinary tract infections to name a few. The
company was founded in 1954 and is based in New York, New York.
Financial Highlights:
 Total Revenue: $3.4 bn
EBITDA: $418.3 mm
 Cash & ST Investments: $3024.1 mm Total Debt: $1.2 bn
Transaction Value: $25.0 bn
LTM EBITDA Multiple: 59.8x
LTM Revenue Multiple: 7.4x
Increase to Actavis preannouncement
equity value: 7%
Transaction Overview:
This $25 billion deal will transform Actavis from
the second largest generic drug-maker by market
value to a developer of brand name drugs as well.
Forest investors will receive cash and stock
valued at $89.48 per share.
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This acquisition will change Actavis’s mix of sales,
provide the combined drug maker with more than
$1 billion in cost savings, and bring Forest’s
brand-name products to more markets.
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Strategic Rationale:
The addition of Forest Laboratories will create a
balance between branded and generic drugs for
Actavis.
Actavis plc (ACT)
An integrated yet primarily generic specialty pharmaceutical company engaged in
the development, manufacture, sale and distribution of pharmaceutical products in
most of the world. It operates in three segments: the Actavis Pharma segment, the
Actavis Specialty Brands segment, and the Anda Distribution segment.
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Forest’s Alzheimer’s drug Namenda and the
blood-pressure pill Bystolic is expected to boost
Actavis’ earnings immediately. These two drugs
are only two out of Forest Laboratories’ portfolio of
fourteen different drugs.
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Actavis uses mergers and acquisitions to
sustain earnings growth and to limit research
and development costs.
Source:
Bourne Partners Internal Research; CapitalIQ February 2014
Bourne Partners Information
Direct Investing
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Select Strategic Advisory Clients
Enterprise values of $10 – $250 million
Direct portfolio companies
Co-invests with other sponsors
Buyout and venture fund commitments
Senior Deal / Operations-focused Resources
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Senior level attention and involvement in every
project
Mix of investment professionals and healthcare
executives
Over $5 billion in transactions completed globally
Operations members provide enhanced support
across investment life cycle and can fill
management roles on transitional or permanent
basis
Select Financial Advisory Clients
Representative Active Role Investments
Global Perspective
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Active tracking of over 500 healthcare
companies worldwide
 United States
 Europe
 Canada
 Latin America
 Asia
 MENA
Representative Passive, Fund, & Co-Investments
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Senior Team
Bourne Partners is comprised of experienced investment professionals, healthcare executives, and operating partners
Banks Bourne
Chief Executive Officer
Minor Hinson
Chief Investment Officer
Jeremy Johnson
Managing Director
Bill Taylor
Director of Legal Affairs
Molly Bourne
Director
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Over 50 years of combined pharmaceutical, medical device, biotechnology, and life sciences healthcare experience
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Over 60 years of combined investment banking and private equity transaction experience
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Transactions completed in more than 35 countries
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Mergers & Acquisitions
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Distribution Agreements
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Strategy Consulting
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Licensing Agreements
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Corporate Spin-offs
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Fund Management
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Product Divestitures
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Capital Raising
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Direct Investing
Office Information
Contact Details
1111 Metropolitan Avenue, Suite 325
Jeremy Johnson
Charlotte, North Carolina 28204
Managing Director
www.bourne-partners.com
704-714-8351
Tel: 704-552-8407
[email protected]
Fax: 704-714-8363
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