Healthcare supplier Perrigo Co. acquires Paddock Lab. for $540 million

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Healthcare supplier Perrigo Co. acquires Paddock Lab. for $540 million

2011-01-21 12:13:02 GMT+7 (ICT)

ALLEGAN, MICHIGAN (BNO NEWS) -- Global healthcare supplier Perrigo Company on Thursday announced that it has signed a definitive agreement to acquire substantially all of the assets of Paddock Laboratories, Inc. for approximately $540 million in cash.

With the acquisition of Paddock, a privately-held, Minneapolis-based manufacturer and marketer of generic pharmaceutical products, Perrigo expects to receive a significant tax benefit generated from the deduction of the step-up in tax basis resulting from the acquisition of Paddock's assets.

This increase in basis is expected to result in cash tax savings to Perrigo over the next 15 years. The estimated net present value of these savings is approximately $95 million.

In addition, the transaction is expected to add more than $200 million in annual sales with over 35 products and a strong product pipeline with more than 25 ANDAs pending approval with the U.S. Food and Drug Administration.

"This acquisition is an important next step forward in executing on our strategy to expand our specialty portfolio of generic Rx products," Perrigo Chairman and CEO Joseph C. Papa stated.

"It adds incremental scale, as well as excellent development and manufacturing capabilities across a spectrum of niche dosage forms. It solidifies Perrigo's leading position in the extended topical space and strengthens our ability to offer new products into the market. And importantly, Paddock has a proven record for quality manufacturing with great customer service," he added.

The acquisition is expected to close during the Company's fiscal 2011 fourth quarter pending regulatory approval.

Perrigo intends to fund the transaction using approximately $80 million of cash on hand, $310 million available per the terms of its existing bank debt agreements and $150 million from a new term loan pursuant to a commitment from Morgan Stanley, JPMorgan and Bank of America.

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