Mylan has announced an agreement to acquire the non-sterile, topicals-focused specialty and generics business of Renaissance Acquisition Holdings for $950 million in cash at closing, plus additional contingent payments of up to $50 million, subject to customary adjustments. The transaction is expected to be immediately accretive to Mylan's adjusted diluted earnings per share upon closing.
The business will bring Mylan a complementary portfolio of approximately 25 branded and generic topical products, an active pipeline of approximately 25 products, and an established U.S. sales and marketing infrastructure targeting dermatologists. The business also brings Mylan an integrated manufacturing and development platform and a leading topicals-focused contract development and manufacturing organization (CDMO). Renaissance, privately controlled and majority-owned by RoundTable Healthcare Partners, will retain its sterile-focused businesses and associated manufacturing facility.
Mylan CEO Heather Bresch said, "The dermatology/topicals space has long been an area of focus for Mylan and one that we have targeted for expansion. This is a strong and growing business in a very attractive category, which is highly complementary to Mylan's existing assets and the pending addition of the Meda dermatology portfolio. We see significant opportunities to accelerate the growth potential of the Business as part of the global Mylan platform, as we maximize our combined assets across customer channels and geographies. This acquisition was accounted for in our anticipated capital structure and does not require any additional financing. As such, we see no impact to the leverage ratio of 3.8x debt-to-adjusted EBITDA we anticipated following the closing of the Meda transaction, and we will retain ample financial flexibility for future value-creating initiatives."
Mylan President Rajiv Malik added, "With the addition of the Business's broad and durable portfolio, exciting pipeline of topical products, and strong manufacturing and R&D capabilities, we will have critical mass in the dermatology/topicals area and catapult to a leading position in this space. We see significant opportunities to maximize our combined dermatology/topicals business and integrated operating platform on a worldwide basis, and expect it to be yet another key global franchise for us, even further strengthening and diversifying our business. We look forward to welcoming the business's talented employees to Mylan upon closing and working together to maximize the potential of our combined organization to set new standards in healthcare in this area. We also look forward to continuing to provide the business's valued customers with the high quality service they are accustomed to."
The business had approximately $370 million in 2015 revenues and has approximately 1,200 employees. The business's commercial segment has a diversified and attractive portfolio of specialty brands and generic products in the dermatology space, as well as a deep pipeline of complex topical generics and brands in active development. The business has two high-quality manufacturing sites with capabilities and capacity in creams, ointments, aerosols/foams, gels, suspensions, liquids and suppositories that are complementary to Mylan's existing capabilities.
Mylan is acquiring the business on a cash-free, debt-free basis and expects to finance the transaction using a combination of cash on hand and available borrowings under existing credit facilities.
The closing of this transaction is conditional upon regulatory approval and other customary closing conditions and is expected to occur by the end of the third quarter of 2016.