Amneal Pharmaceuticals has agreed to buy Impax Laboratories in an all-stock deal to create a diversified pharmaceutical firm that is expected to become the fifth largest generics business in the US.
Impax Laboratories is a specialty pharmaceutical company, based in California while Amneal is a generic pharmaceutical manufacturer based in Bridgewater, New Jersey.
Post merger, Amneal shareholders will own nearly 75% and Impax shareholders will own around 25% of the new entity which would be named as Amneal Pharmaceuticals.
Impax president and CEO Paul Bisaro said: “This transaction is financially compelling as we expect the combination to be accretive to Impax's standalone adjusted per share earnings in the first 12 months and generate double-digit growth in revenue and adjusted EPS over the three years following the close of the transaction.
“We expect to achieve annual cost synergies of approximately $200 million within three years. The anticipated strong cash flows from the combined company allow for the repayment of debt and the ability to meaningfully invest in our business.”
The combined generic pharmaceutical company will be worth around $6.4bn after removing the debts, reports The Wall Street Journal citing people familiar with the deal.
The pro forma net revenue of the combined company is expected to be around $1.75-1.85bn in 2017.
Amneal Pharmaceuticals will have a diverse and differentiated pipeline comprising over 300 products to go along with its vast existing commercial product portfolio.
Amneal co-CEO and co-chairman Chirag Patel said: “This transaction combines the complementary strengths of both Amneal and Impax to create an even stronger company with the diversification, capabilities and resources to deliver enhanced value for patients, new opportunities for our collective employees and increased growth and value creation for shareholders.”
The products to be part of the new entity are either filed with the US Food and Drug Administration (FDA) or in active stages of development.
Amneal Pharmaceuticals, with around 6,500 employees, will also have a foundation for global expansion with select commercial footprint in the UK and Germany. Besides, it will own international manufacturing and development capabilities in all dosage types.
The merger is expected to be completed in the first half of 2018, subject to regulatory approvals and Impax shareholder approval among other customary closing conditions.
Amneal’s portfolio includes alosetron hydrochloride tablets among others Photo: courtesy of Amneal Pharmaceuticals LLC.