Pharmaceutical manufacturer Perrigo will buy Minneapolis-based generic drugs maker Paddock Laboratories for $540 million in cash. It is funding the acquisition using $80 million of its own cash, plus $310 million from its existing bank debt agreements and $150 million from a new term loan agreement with Morgan Stanley, JPMorgan, and Bank of America. The new loan agreement allows for a syndication of another $100 million, which would allow Perrigo to reduce the amount funded under its existing debt agreements. The firm says it also expects to receive about $95 million net in tax benefits over the next 15 years if the acquisition is finalized.
Perrigo hopes the transaction will add more than $200 million to its annual sales during its first fiscal year. The acquired firm includes over 35 marketed products and a pipeline including more than 25 ANDAs pending approval by FDA. “This acquisition is an important next step forward in executing on our strategy to expand our specialty portfolio of generic Rx products,” states Joseph C. Papa, Perrigo chairman and CEO. “It adds incremental scale, as well as excellent development and manufacturing capabilities across a spectrum of niche dosage forms. It solidifies Perrigo’s leading position in the extended topical space and strengthens our ability to offer new products into the market.”
Paddock operates a cGMP compliant facility on a 7.5 acre campus in Minneapolis. The 200,000 sq.ft. headquarters houses R&D, manufacturing, and all administration functions. Manufacturing expertise encompasses a wide variety of dosage forms, including all types of semi-solids, liquids, powders, tablets, and capsules.
Perrigo develops, manufactures, and distributes OTC and prescription pharmaceuticals, nutritional products, active pharmaceutical ingredients, and consumer products. It recorded net sales of $2.7 billion in 2010, up 13.1% on 2009.