Horizon Pharma said today it will buy Vidara Therapeutics International for about $660 million, in a deal the acquiring company said would speed up its repositioning into a specialty drug developer.
The boards of both companies have approved the acquisition, which is expected to close mid-year—but is still subject to approval by Horizon shareholders, as well as customary closing conditions and regulatory approvals, including antitrust approval in the U.S. Horizon said entities holding some 20% of its outstanding shares have agreed to vote for the deal.
The acquisition creates a combined company that marries three U.S.-marketed Horizon products—arthritis drugs Duexis® (famotidine and ibuprofen) and Vimovo® (naproxen and esomeprazole magnesium), as well as anti-inflammatory drug Rayos® (prednisone; marketed outside the U.S. as Lodotra®)—with Vidara's U.S.-marketed Actimmune (interferon gamma-1b), indicated for children and adults with chronic granulomatous disease (CGD) and severe, malignant osteopetrosis (SMO). Actimmune generated $58.9 million in net sales in 2013.
“The addition of Actimmune complements our commercial business model focused on targeted promotion to primary care physicians and specialists,” Timothy P. Walbert, Horizon’s chairman, president and CEO, said in a statement. “We look forward to working with the Vidara team to bring our companies together to accelerate the creation of shareholder value.”
Walbert would retain all his leadership positions with the combined company, while current officers of Horizon would be officers of the new Horizon Pharma. Vidara executives would hold “important leadership and management roles” within the combined company, Horizon said.
The combined company anticipates full-year 2014 revenues of between $250 million and $265 million, and earnings before interest, taxes, depreciation and amortization ranging from $65 million to $75 million, excluding one-time deal-related expenses.
While the combined company’s four marketed products are sold primarily in the U.S., the new Horizon Pharma plc will be domiciled in Ireland, whose corporate tax rate of just 12.5% has prompted several American firms to take advantage by moving their headquarters there following deals with Dublin-based companies—including Actavis, which acquired Warner Chilcott, in a deal completed in October; and Perrigo, which acquired Elan in December.
Vidara will combine with Horizon through a reverse merger in which about 74% of the new company’s ordinary shares will be exchanged for common shares of the former Horizon Pharma, Inc., with the new entity surviving the merger. Vidara shareholders will keep the remaining 26% of shares in the new company and receive $200 million cash, subject to certain adjustments.
Horizon said it secured a $250 million bridge loan commitment from Deerfield Management Company L.P. pending execution of final financing plans.