Inward Investment

Perrigo proposes to acquire Elan for $8.6bn

PBR Staff Writer Published 29 July 2013

Global healthcare products provider Perrigo Company and Elan have entered into a definitive agreement, under which the latter will be acquired by a new holding company in Ireland, New Perrigo, in a $8.6bn cash and stock transaction.

Perrigo chairman and CEO Joseph Papa said, "Through this transaction, Perrigo establishes a diversified platform for further international expansion."

"We believe this transaction is compelling for Elan shareholders and fully takes into account the value of Elan's assets, including a large cash balance and a double-digit royalty claim on Tysabri®, a blockbuster product that generated revenues of US$1.6 billion last year and has been growing at a compound annual growth rate of 19%."

Approved by the respective boards of directors of Perrigo and Elan, the proposed transaction is expected to close by the end of 2013.

After the closing of the transaction, Perrigo shareholders are expected to own approximately 71% of the combined company while Elan shareholders are expected to own approximately 29%.

An aggregate amount of $4.35bn in fully underwritten bridge financing commitments has been secured by Perrigo from Barclays and HSBC Bank USA, N.A.

The amount along with Perrigo cash on hand will be used to finance the cash portion of the transaction, fees payment and transaction expenses as well as refinance its existing indebtedness.

Perrigo plans to refinance and repay the bridge borrowings through new debt issuances and use Elan cash on hand.