- Teva to fund Mexican takeover with cash, lines of credit
- Rimsa to boost Teva earnings starting in first quarter 2017
Teva Pharmaceutical Industries Ltd. agreed to buy Mexican drugmaker Representaciones e Investigaciones Médicas SA and some assets for $2.3 billion, furthering the Israeli company’s goal of expanding in emerging markets.
Rimsa, which had revenue of $227 million in 2014, will add to earnings from the first quarter of 2017, Petach Tikva, Israel-based Teva said in a statement on Thursday. The transaction will be completed in the early part of next year.
Teva’s chief executive officer, Erez Vigodman, has sought acquisitions to gain bulk and jump-start growth as the company’s top-selling drug faces competition for the first time, and said closely held Rimsa offers a path into Latin America’s second-largest health-care market. Teva in July agreed to pay about $40.5 billion in cash and stock to buy the generic-drug business of Allergan Plc, dropping a hostile bid for rival Mylan NV.
Teva said it will use a combination of cash on hand and lines of credit to fund the acquisition of Rimsa along with a “portfolio of products and companies, intellectual property, assets and pharmaceutical patents in Latin America and Europe.”
Teva’s stock showed little change, rising 0.8 percent in Tel Aviv. Bankers at Citigroup Inc. advised Teva while Goldman Sachs Group Inc. acted as financial adviser to Rimsa.
Foreign companies and investors have been pursuing transactions in Mexico’s pharmaceutical industry, seeking exposure to a market where relatively low rates of health-care spending are projected to rise. Last year, Endo International Plc bought Mexico City-based Grupo Farmaceutico Somar, while private-equity firm General Atlantic LLC acquired a minority stake in Laboratorios Sanfer.