Watson to gain 100 targeted molecules with $1.05 million in cash.
Watson Pharma says it will acquire the Arrow Group for a combined $1.75 billion in cash and stock in a move that it says will gain it more than 100 molecules already marketed in 20 countries including Canada, France, and the U.K.
The deal includes a cash payment of $1.05 billion, $500 million in Watson common stock, and $200 million in preferred Watson stock redeemable in three years.
Combining the two companies will result in an entity with $3 billion in revenue based on the addition of Arrow’s 2008 revenue of $646 million due to a 67% organic compound annual growth rate since 2001.
Acquiring Arrow will “expand our global footprint and leverage our assets across many developed and emerging markets around the world,” says Paul Bisaro, Watson president and CEO. “The combined company will have a global infrastructure and a strong product portfolio and pipeline which create significant opportunities for long term growth. Additionally, Arrow’s manufacturing network, including facilities in Canada, Malta and Brazil, will further expand Watson’s global supply chain.”
The company says it will use Arrow’s commercial footprint in several companies to help expand its offerings into those countries, as well as manufacturing operations that could expand Watson’s own supply chain with little overlap in terms of operations. Watson will also gain a 36 percent stake in Eden Biodesign, which it says will provide operational expertise and manufacturing capabilities for generic biologics.
When the transaction is closed, expected by the end of this year, Tony Tabatznik, Arrow founder and CEO, is expected to join Watson’s Board of Directors as a non-employee director.