Perrigo Co. PLC will pay about $4.1 billion in cash to complete its buyout of Omega Pharma Invest NV, of Belgium.
The cash and equity deal, which was announced last November, is expected to expand Perrigo’s market presence in Europe and broaden its portfolio of store-brand, over-the-counter pharmaceuticals there.
The transaction, involving sellers Marc Coucke, Waterland Private Equity Fund V CV and co-investors of Waterland, is valued at approximately €3.8 billion ($4.1 billion), including the assumption of €1.3 billion ($1.4 billion) in debt.
Omega sells healthcare products, prescription-free medicines and personal care items. It had $1.6 billion in revenue during the 12 months ended Sept. 30, making it the fifth largest player in the European over-the-counter pharmaceuticals market and the largest or second largest player in four European markets.
Perrigo is one of the world’s largest makers of over-the-counter and generic prescription pharmaceuticals and nutritional products sold under the labels of major retailers. In a recent ABC News interview Perrigo Chairman, President and CEO Joseph C. Papa said the transaction will allow the company to expand its sales from seven countries to 39 countries and launch in Europe many more of the 3,000 products it sells in the U.S. market.
In a press release, Perrigo’s leadership said the deal advances its international Growth strategy by giving it critical mass in all key European countries; positions Perrigo to capture more of the $30 billion European market for over-the-counter pharmaceuticals; gives it “commercial infrastructure” in that tough-to-access market; and gives it additional opportunities for future acquisitions.
“The combination of Perrigo and Omega creates an industry leading, global healthcare company with the operational structure and cash flow generation to accelerate our international growth even further,” Papa said in the release.
He said, “This strategic combination creates a top five global OTC healthcare company by revenue, enhancing our leading OTC position through Omega’s strong, established European commercial, regulatory and distribution platforms, which further enables us to capitalize on the many megatrends which bend in favor of consumer choice and cost control in healthcare. We expect the combined companies will create tremendous value for consumers and shareholders for years to come.”
In the press release, the company also said the move strengthens its product portfolio. Among other things, it leverages Perrigo’s consumer health portfolio into Omega’s European commercial network and combines Perrigo’s supply chain and operational excellence with Omega’s OTC branding and regulatory expertise.
Perrigo reincorporated itself in Dublin, Ireland, last year but its administrative headquarters remains in Allegan County where the company was founded and where the majority of its 3,600-person Michigan workforce is employed.
