Nichi-Iko to Acquire Sagent Pharmaceuticals for $736M

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Nichi-Iko Pharmaceutical agreed to acquire Sagent Pharmaceuticals for $736 million, the companies said today, in a deal that will help the buyer commercialize its biosimilar product pipeline in the U.S. while increasing its presence in generics and injectables.

Sagent said it expects the acquisition will enhance its competitiveness in the U.S. through Nichi-Iko’s portfolio of biosimilars under development and injectable products.

The deal is also designed to help Sagent bring more generic medicines to market by giving it access to Nichi-Iko’s manufacturing infrastructure and quality control systems.

Nichi-Iko’s purchase of Sagent comes less than a month after Sagent acquired five Abbreviated New Drug Applications (ANDAs) from Teva Pharmaceutical Industries for $40 million—products divested by Teva as a precondition to its $40.5 billion acquisition of Allergan’s generics business, announced last year.

The companies said no changes to Sagent’s current operations are currently anticipated and that Nichi-Iko expects Sagent’s current management team to continue leading the acquired company from its headquarters in Schaumburg, IL. Sagent will become a wholly owned subsidiary of Nichi-Iko.

“The U.S. market is a top priority for Nichi-Iko and we believe Sagent is an ideal partner to accelerate our international growth strategy,” Nichi-Iko President & CEO Yuichi Tamura said in a statement.

“The company has a highly robust sales network, significant global relationships through its unique partner network, and an attractive portfolio of 55 products primarily in oncology, anti-infective, and critical care, of which 30% have a No. 1 or No. 2 market share,” Tamura added. “The combination will give us the opportunity to strengthen our international competitiveness, leverage our production capacity over a wider range of products, and accelerate development of our biosimilars business.”

Nichi-Iko agreed to form a subsidiary that will acquire Sagent through a tender offer of $21.75 per share cash, followed by a second-step merger in which all outstanding shares of Sagent common stock not tendered in the tender offer will be converted into the right to receive the same amount in cash equal to the tender offer price.

The tender offer is expected to begin within 15 business days from the signing of the merger agreement and will remain open for a minimum of 20 business days.

Nichi-Iko said it intends to finance the acquisition through bank loans and available cash. The acquisition price represents a premium of approximately 40.3% to Sagent’s closing price Friday of $15.50 per share on NASDAQ.

The transaction has been unanimously approved by the boards of both companies and is expected to close in the second quarter of Nichi-Iko’s fiscal year ending March 2017, subject to customary conditions that include the valid tender of a majority of the outstanding Sagent shares on a fully diluted basis, and the expiration or earlier termination of the Hart–Scott–Rodino waiting period.

“After thoroughly evaluating our strategic options, our board of directors has unanimously decided that this all-cash transaction is in the best interest of our stockholders,” added Sagent Pharmaceuticals CEO Allan Oberman. “We are confident that Nichi-Iko is the ideal partner to help us push forward into our next stage of growth and solidify our position as a leading provider of affordable pharmaceuticals to the hospital and clinic market.”








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