If successfully completed, the transaction will combine two of the world's fastest-growing specialty pharmaceutical companies, with combined annual revenues of over $15 billion anticipated for 2015.
The per share consideration, $89.48 per Forest share, represents a 25% premium over Forest's stock price, and a 31% premium over Forest's 10-day volume weighted average stock price, as of the close of trading Feb. 14, 2014.
"With this strategic combination, we create an innovative new model in specialty pharmaceuticals leadership, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development, and—most important—the ability to drive sustainable organic growth," said Paul Bisaro, chairman and CEO of Actavis.
On a pro forma combined basis for 2014, the combined company will have an approximately $2 billion CNS franchise; gastroenterology (GI) and women's health franchises valued at approximately $1 billion each; a cardiovascular franchise generating approximately $500 million; and urology and dermatology/established brand franchises approaching $500 million a year in sales each.
"Forest is a great fit with Actavis due to our strong legacy in branded specialty and primary care pharmaceuticals with a best in class commercial team, a top-notch drug development organization and a long history of successful partnerships," said Brent Saunders, CEO and president of Forest. “The acquisition builds on our blockbuster line call strategy in CNS and GI, and dramatically extends our reach beyond the U.S. market."
Saunders will join the Actavis board of directors. Bisaro will lead the combined company. Three members of the Forest board of directors will be named to the Actavis board of directors following the close.
The proposed transaction has been unanimously approved by the boards of directors and is supported by both management teams.
The merger will result in Specialty Brand revenues comprising approximately 50% of the total combined company pro forma revenues, when compared to approximately 30% of North American specialty brand revenues for standalone Actavis.
It also creates blockbuster product franchises in CNS, GI, women's health, urology and cardiovascular areas; and emerging and sustainable portfolios in infectious disease, respiratory, cystic fibrosis and dermatology.
In addition, the combined company will have investment in new product development in excess of $1 billion annually. Five Forest products are at the NDA stage of development, including treatments for Alzheimer's disease, cardiovascular disease, infectious disease, schizophrenia and bipolar disorders and COPD.
The acquisition is anticipated to close by mid year.