Parsippany, N.J.-based Watson Pharmaceuticals has acquired Ascent Pharmahealth, the Australia and Southeast Asia generic pharmaceutical business of Strides Arcolab, for $393 million in cash.

The acquisition makes Watson the fifth largest generic pharmaceutical company in Australia based on revenue, and the combined company will be the second largest in terms of total molecules. Watson also becomes the largest generics company in Singapore and gains an established commercial base in Malaysia, Hong Kong,Vietnam and Thailand. Watson expects the transaction to be immediately accretive to 2012 non-GAAP earnings.

Ascent markets a broad portfolio of generics, brands, branded-generic and over-the-counter (OTC) and dermatology and skin care products in Australia with approximately 14% market share. In the Southeast Asia market, Ascent markets branded-generics and OTC products, and is supported by a 45-person sales force. The company employs 300 in Australia and Southeast Asia. 

"We are committed to expanding our international commercial operations into geographies where we can capitalize on our existing assets and participate in growing and emerging markets," said Paul Bisaro, Watson's president and CEO. "We will retain the proven sales and marketing teams that have driven Ascent's growth; we will have a larger portfolio of products, and gain a broader pipeline of products to support continued growth," Bisaro added. 

Watson currently operates in the Australian marketplace through its subsidiary, Spirit Pharmaceuticals, which supplies products to third parties and has a successful development track record and robust pipeline of products, including significant patent challenges.  Watson also operates through its Willow Pharmaceuticals subsidiary, which develops, sources and markets products with an emphasis on injectables. In 2010, the company established the Watson Pharma to consolidate its position in Australia and support growth in the marketplace.  The company expects this entity to manage the Ascent assets.