- Creates 3rd largest global generics company with presence in 60+ markets -
- $8.0+ billion anticipated pro forma combined 2012 revenue -
- Combined management structured to immediately maximize combination value -
PARSIPPANY, N.J., Oct. 31, 2012 /CNW/ - Watson Pharmaceuticals, Inc. (NYSE:
WPI) today announced that it has completed the acquisition of the Actavis
Group for EUR 4.25 billion. The combination creates the world's third largest
generic pharmaceutical company, with anticipated pro forma combined 2012
revenues in excess of $8 billion.
Watson funded the transaction through a combination of $1.8 billion in term
loan borrowings and the issuance of $3.9 billion in senior unsecured notes.
The Company said the transaction is immediately accretive to non-GAAP
earnings, before synergies. The Company also noted that the strong cash flows
of the combined business are expected to permit rapid pay down of debt.
"Today we unite two powerful, profitable and rapidly growing companies into
one exceptional global business. As a result of accelerated integration
planning, we will immediately begin to maximize the exceptional financial and
commercial value of this combination," said Paul Bisaro, President and CEO of
Watson. "Over the past several months we have defined and communicated
internally the Global Generics, R&D and Operations and Shared Services
management structures and today begin operations as a combined company. We
also begin the immediate execution of our Day 1 through Day 100 integration
strategies to support continued growth, while optimizing our global structure
and capturing our projected synergies. I am confident that working together,
the 17,000 people of our new company will now be focused on the seamless
integration of the company for strong and sustainable growth."
"With the acquisition complete, we now have the generic assets in place that
will power our continued organic growth, and generate strong cash flow to
support the rapid pay-down of debt, which will allow us to continue to focus
on future investments to enhance all of our businesses, particularly our
Global Brands and Biosimilars businesses. Watson plans to host Investor Day
2013 in January to provide a more comprehensive review of the combined
Significant Synergies Expected
Watson continues to expect $300 million in annual cost synergy savings from
the Actavis acquisition within three years. These synergies are comprised of
SG&A, R&D, corporate, purchasing and raw material supply savings.
Transaction Financing Favors Rapid Deleveraging
The acquisition was funded through a combination of $1.8 billion in term loan
borrowings at an average rate of three-month libor plus 150 basis points and
the issuance of $3.9 billion in senior unsecured notes. The overall combined
cost of debt for the acquisition was approximately 2.9 percent. The combined
company is expected to generate strong free cash flow in 2013, which favors
Review of the Benefits of the Acquisition
This acquisition combines two growing, successful and highly profitable
companies, and substantially completes Watson's expansion as a leading global
generics company. The combined Company begins operations with a defined
global management structure and aggressive integration execution strategies in
place to focus on organic growth and rapid achievement of synergies.
Expanded Global Geographic Footprint
The combined company has operations in more than 60 countries, with top 10
positions in more than 33 markets including the U.S., U.K., Canada, Australia,
Nordics and Russia. With this global footprint, the combined company has an
extensive platform for strong, future organic growth. The strongest growth
regions for the new company will be the U.S., Central and Eastern Europe and
Russia and in Southeast Asia and Australia. The Company is also the fastest
growing generic pharmaceutical company in Western Europe, where growth is
outpacing the overall market. The combined company will be geographically
diverse, with approximately 40 percent of its revenues coming from outside of
Expanded Portfolio and Development Pipeline
The combined Company has an industry leading global product portfolio of over
750 molecules offered in more than 1,700 different combinations and dosage
forms. The Company also has expanded its core leadership position in oral
solid modified release and transdermal products, as well as semi-solids,
liquids and injectables. The U.S. pipeline includes approximately 180 unique
ANDAs pending at the FDA, including 47 First-to-Files, of which we believe
over 30 are exclusive. Outside of the U.S., the current pipeline includes
more than 2,000 marketing authorizations pending approval and, globally,
greater than 600 new development projects are underway covering multiple
Expanded Global Supply Chain
The Company has an expansive, diversified global supply chain with various
technological capabilities, including the ability to manufacture more than 40
billion dosages worldwide. The combined company has the expertise to develop
solid dosage, modified release, patch, gel, liquid, semi-solid and injectable
products for all of its global markets.
Conference Call and Webcast Information
Watson plans to discuss the close of the acquisition on its third quarter
earnings conference call scheduled for November 1, 2012 at 8:30 a.m. Eastern
The dial-in number to access the call is (877) 251-7980, or from international
locations, (706) 643-1573. The Conference ID is 37197625.
A taped replay of the conference call will also be available beginning
approximately two hours after the call's conclusion and will remain available
through 12:00 midnight Eastern Time on November 15, 2012. The replay may be
accessed by dialing (855) 859-2056 and entering the same Conference ID above.
From international locations, the replay may be accessed by dialing (404)
537-3406. To access the webcast, go to Watson's Investor Relations Web site
Additional resources are available at
About Watson Pharmaceuticals, Inc.
Watson Pharmaceuticals, Inc. (NYSE: WPI) is a global, integrated specialty
pharmaceutical company focused on developing, manufacturing and distributing
generic, brand and biosimilar products. The Company has global and U.S.
headquarters in Parsippany, New Jersey, USA, and international headquarters in
Watson is the world's third-largest generics manufacturer, with more than 750
products marketed globally through operations in more than 60 countries.
Watson's global branded pharmaceutical business develops and markets products
principally in Urology and Women's Health, and is committed to developing and
marketing biosimilars products in Women's Health, Oncology and other
therapeutic categories. In addition, Watson is the fourth-largest U.S.
generic pharmaceutical product distributor through its Anda, Inc. business,
and also develops and out-licenses generic pharmaceutical products outside of
the U.S. through its Medis third-party business.
For press release and other company information, visit Watson Pharmaceuticals'
Web site at http://www.watson.com.
Statements contained in this press release that refer to Watson's estimated or
anticipated future results or other non-historical facts are forward-looking
statements that reflect Watson's current perspective of existing trends and
information as of the date of this release. For instance, any statements in
this press release concerning prospects related to Watson's strategic
initiatives, product introductions and anticipated financial performance are
forward-looking statements. It is important to note that Watson's goals and
expectations are not predictions of actual performance. Watson's performance,
at times, will differ from its goals and expectations. Actual results may
differ materially from Watson's current expectations depending upon a number
of factors affecting Watson's business. These factors include, among others,
the inherent uncertainty associated with financial projections; successful
integration of the Actavis acquisition and the ability to recognize the
anticipated synergies and benefits of the Actavis acquisition; the difficulty
of predicting the timing and outcome of pending or future litigation and
government investigations and risks that an adverse outcome in such litigation
or investigations could render Watson liable for substantial damages or
penalties; risks that resolution of patent infringement litigation through
settlement could result in investigations or actions by private parties or
government authorities or agencies; the impact of competitive products and
pricing; risks related to fluctuations in foreign currency exchange rates;
periodic dependence on a small number of products for a material source of net
revenue or income; variability of trade buying patterns; changes in generally
accepted accounting principles; risks that the carrying values of assets may
be negatively impacted by future events and circumstances; the timing and
success of product launches; the difficulty of predicting the timing or
outcome of product development efforts and regulatory agency approvals or
actions, if any; risks and uncertainties normally incident to the
pharmaceutical industry, including product liability claims and the
availability of product liability insurance on reasonable terms; market
acceptance of and continued demand for Watson's products; difficulties or
delays in manufacturing; the availability and pricing of third party sourced
products and materials; successful compliance with governmental regulations
applicable to Watson's facilities, products and/or businesses; changes in the
laws and regulations, including Medicare, Medicaid, and similar laws in
foreign countries affecting, among other things, pricing and reimbursement of
pharmaceutical products and the settlement of patent litigation; and such
other risks and uncertainties detailed in Watson's periodic public filings
with the Securities and Exchange Commission, including but not limited to
Watson's Annual Report on Form 10-K for the year ended December 31, 2011 and
Watson's Quarterly Report on Form 10-Q for the period June 30, 2012. Except as
expressly required by law, Watson disclaims any intent or obligation to update
these forward-looking statements.
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