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KKR to acquire minority stake in Arbor Pharmaceuticals

New York-based private equity firm KKR has agreed to acquire a significant minority stake in specialty drugmaker Arbor Pharmaceuticals, in a bid to help drive continued growth.

kkr arbor

Financial terms of the transaction were not disclosed by both the companies, however, sources familiar with the development have been cited by Reuters as saying that the deal values the privately held specialty drugmaker at more than $1bn, including debt.

The sources also added that KKR will own more than a quarter of Arbor.

The agreement between both the companies follows after reports emerged of a possible stake sale including strategic options in October this year. It was also reported that Arbor was working with investment bank JPMorgan Chase & Co.

KKR Health Care investing team director Ali Satvat said: "Arbor is led by an accomplished management team with a track record of building and scaling specialty pharmaceutical platforms.

"We believe that Arbor, with its diversified product portfolio, late-stage development pipeline, and proven business development acumen, is well positioned for continued growth."

Arbor president and CEO Ed Schutter added: "Arbor remains committed to creating value for patients by identifying, developing, and bringing to market improved medicines with a focus on quality."

Subject to regulatory approvals and other customary closing conditions, the transaction is expected to close early in the first quarter of 2015.

Lazard Middle Market served as financial advisor and King & Spalding LLP served as legal counsel to Arbor. Simpson Thacher & Bartlett LLP served as legal counsel to KKR.

Arbor markets branded prescription products for the cardiovascular, hospital, and pediatric markets as well as generic products through its Wilshire division.

The company has completed more than 20 acquisition, licensing, or product development transactions over the past four years, filing for multiple products with the FDA as well as several branded and generic products in late-stage development.


Image: KKR’s headquarters in the Solow Building in New York City, US. Photo: courtesy of Ilya Voytov.