Valeant Pharmaceuticals International, Inc. and PharmaSwiss
S.A. have signed a binding agreement for Valeant to acquire PharmaSwiss, a
privately-owned branded generics and over-the-counter (OTC) pharmaceutical
company based in Zug, Switzerland for euro 350 million. Upon closing,
PharmaSwiss is expected to have approximately euro 38 million cash on hand and
no debt. Up to an additional euro 30 million may be payable to certain
stockholders of PharmaSwiss based upon achievement of certain milestones.
PharmaSwiss has a broad product portfolio in seven
therapeutic areas and operations in nineteen countries throughout Central and Eastern
Europe, including Poland, Hungary, the Czech
Republic and Serbia. The
company also has operations in Greece
and Israel.
In addition, PharmaSwiss is an existing partner to several large pharmaceutical
and biotech companies offering regional expertise in such functions as
regulatory, compliance, sales, marketing and distribution. PharmaSwiss
had annual revenues of approximately euro 180 million in 2010 and has been
growing at approximately 20% per year over the past 5 years.
The senior management team of PharmaSwiss will remain with
Valeant, including both the founder-partners, as well as Pavel Mirovsky, chief
executive officer of PharmaSwiss. All of them are expected to continue in their
leadership roles, working closely with the Valeant Europe team. Mr.
Mirovsky will report directly to Valeant’s chief executive officer, J. Michael
Pearson. Over time, it is anticipated the Valeant business in Central
Europe will be combined under the PharmaSwiss corporate structure, based in Zug, Switzerland.
The transaction, which is subject to customary closing
conditions, including certain regulatory approvals, is expected to close in the
first or second quarter of 2011 and to be immediately accretive to Valeant. After
synergies, it is expected that the operating income as a percentage of revenue
of the combined Central and Eastern European business will be similar to that
of Valeant’s historical branded generic European business.
“This acquisition of PharmaSwiss solidifies our
position as a leading pharmaceutical company in Central and Eastern
Europe,” said Mr. Pearson. “PharmaSwiss has an
attractive partnering strategy as well as a complementary branded generics and
OTC product portfolio that will strengthen our presence in the region.”
“I am delighted that PharmaSwiss will be joining
Valeant,” commented Dr. Pavel Mirovsky. “Valeant’s additional
resources, professional approach, focused pipeline and strong commitment to
supporting all three legs of the PharmaSwiss business model (Representation of
multinationals, Licensing from specialty pharma, and Own Brands), will enable us
to build up our winning strategy of serving partners. Valeant Europe’s strong
presence in Poland,
the region’s largest market, fills an important gap and should contribute to
transaction synergies. The message we want to send to our employees,
business partners and other stakeholders is one of continuity and commitment to
growth.”
