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Jun 27, 2013

In $1B Deal, Merck Sells API Business, 11-Drug Portfolio

  • Aspen Group said today it will buy from Merck & Co. an active pharmaceutical ingredient manufacturing business with operations in the Netherlands and the U.S., as well as a portfolio of 11 drug brands, in a more-than-$1 billion deal that Aspen says will broaden its offerings beyond generics and boost its presence in Asia and Latin America, as well as Europe.

    The API business consists of the entire Boxtel site and parts of the Moleneind and De Geer facilities—all in the Dutch city of Oss—plus a sales office also in Oss, and a site in Sioux City, IA. The business generated pro-forma revenue of €284 million (about $370 million) last year.

    The portfolio consists of 11 branded finished-dosage form molecules covering a diverse range of therapeutic treatments, including the anticoagulant Orgaran and hyperthyroidism products Thyrax and Strumazol. The portfolio generated $248 million last year, more than half of that generated in Aspen's key strategic regions of Latin America and Asia Pacific, followed by Europe.

    Aspen is now the world’s ninth-largest generic drug company.

    "One of Aspen's primary strategic intents is to further globalize its business, increase its representation across a number of additional territories, and provide support to its growing global presence with a differentiated pipeline. This transaction provides a platform to contribute to the achievement of this strategic intent by enabling Aspen to access a niche range of APIs and finished-dosage products," Aspen Group CEO Stephen Saad said in a statement.

    As part of the deal, Aspen’s parent Aspen Holdings will acquire shares of a new Dutch company containing the API business for about €36 million (about $46.9 million), with the new company in turn acquiring inventory valued at about €300 million ($390.5 million). A subsidiary of Aspen Holdings is expected to exercise an option to acquire the portfolio for $600 million.

    The deal to purchase the API business is subject to approval by regulatory authorities and the South African Reserve Bank set to close on October 1, with the portfolio acquisition expected to take place December 31. 


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