Canada-based Concordia Healthcare is buying Amdipharm Mercury Limited (AMCo) from European private equity firm Cinven for $3.5 billion in a deal involving a combination of cash, common shares of Concordia, and a performance-based earn-out payable in cash.
Concordia Chairman and CEO Mark Thompson said in a prepared statement, “This acquisition is a key milestone and pivotal turning point in Concordia’s strategy, which gives us the platform to take our business to the next level We are not only acquiring products and commercial infrastructure, but a seasoned management team that has done a fantastic job of building a solid and successful international pharma operation. The combination of our highly complementary yet geographically diverse business is truly transformational.”
AMCo has a portfolio of nearly 200 drugs in the areas of endocrinology, opthalmology and urology. When the deal closes in the fourth quarter, Cinven will hold about 20 percent of Concordia’s shares. Concordia will expand its market to more than 100 countries.
London-based AMCo was the result of a merger between Amdipharm and Mercury Pharma. Cinven initially bought both in 2012 and combined the two companies a year later. The company markets niche drugs under the Amdipharm, Abcur, Mercury Pharma and Focus brands. Last year, it reported about $446 million in revenue.
Concordia specializes in legacy pharmaceutical products and orphan drugs. It markets Lanoxin for mild-to-moderate heart failure, Nilandron for prostate cancer and Zonegran for partial seizures in epilepsy. Its fiscal year ends in March. The company reported $122.2 million in revenue for the 2015 fiscal year.
Concordia is the owner of Concordia Pharmaceuticals, U.S.-based Pinnacle Biologics and Complete Medical Homecare, which focuses on home delivery of diabetic supplies, diabetic shoes and inserts, diabetes drugs and insulin pumps.
In its second-quarter financial reporting last month, Concordia Healthcare announced that it had completed the $1.2 billion acquisition of Covis Pharma and Covis Injectables. The portfolio acquired in the Covis deal included 12 branded products, five generic products and a product that is distributed by a third party in Australia.
The AMCo acquisition is being conducted with the assistance of Goldman Sachs, Credit Suisse, RBC Capital Markets, and Jefferies and Co They have agreed to provide credit facilities and bridge commitments up to $4.3 billion. The breakdown of the deal is $1.2 billion in total, with 8.49 million shares of Concordia stock worth about $700 million and the assumption of about $1.4 billion in AMCo net debt. There will be a maximum performance-based earn-out of around $220 million in the fourth quarter of next year.