ST. ALBANS — Mylan announced Wednesday that it has made a proposal to acquire Perrigo Company.
Perrigo employs about 350 people in Georgia its 218,000-square-foot facility infant formula plant. Mylan employs about 600 people locally and has recently expanded its operations and campus in St. Albans to accommodate new workers.
Mylan, in a press release issue from headquarters in Potters Bay, England, said a cash-and-stock transaction would create a diversified, global pharmaceutical leader with an unmatched commercial and operating platform and a unique, one-of-a-kind profile.
According to the statement, “The combination of these highly complementary businesses would produce a company with critical mass in specialty brands, generics, over-the-counter (OTC) and nutritional products; a powerful commercial platform with reach across all customer channels; an exceptional high-quality operating platform; and opportunities to generate enhanced growth and deliver significant immediate and long-term value and benefits for shareholders and the other stakeholders of both companies.”
Under the terms of the non-binding proposal, which was delivered to Perrigo on April 6, Perrigo shareholders would receive $205 in a combination of cash and Mylan stock for each Perrigo share. This represents a greater than 25 percent premium to the Perrigo trading price as of the close of business on Friday, April 3 (the last trading date prior to the date of Mylan’s proposal), a greater than 29% premium to Perrigo’s sixty-day average share price and a greater than 28% premium to Perrigo’s 90-day average share price.
Mylan’s Executive Chairman Robert J. Coury said, “This proposal is the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination. … We have great respect for Perrigo’s board and management team and what they have built.”
The proposal is subject to review and could be waived by Mylan at its discretion.
Mylan also released the full text of the letter delivered to Perrigo by Mylan on April 6. That letter was addressed to Joseph C. Papa, CEO and chairman of Perrigo in Dublin, Ireland.
In part that letter stated:
“Our proposed transaction not only makes compelling strategic sense, it also results in a combined company with a very strong financial profile, including:
- Approximately $15.3 billion in 2014 pro forma sales;
- Substantial free cash flows driving rapid deleveraging and enhanced reinvestment into the business;
- Compelling synergies resulting in operating margin expansion and EPS accretion;
- Scope for meaningful revenue synergies given the strength of the combined business, rich pipeline of launches, and opportunities to mean more to our customers across business lines;
- A much stronger, larger and more diverse platform to create enhanced and more predictable earnings growth; and
- Greater opportunities for continued growth through strategic acquisitions.”
The letter further offered Papa the position of co-chairman of Mylan and a seat on the Mylan Board.
Coury also stated, “I will continue to serve as Mylan’s Executive Chairman, Heather Bresch will continue to serve as CEO and Rajiv Malik will continue to serve as President. Our Board also has great respect for your senior management team, and we envision the combined company leveraging the best of our collective management and employee talent. To that end, we are hopeful that, among others at Perrigo, Judy Brown and Todd Kingma would be willing to serve in important roles with the combined company. We also envision important roles in the combined company for members of Marc Coucke’s Omega Pharma management team.
Mylan is a global pharmaceutical company with a portfolio of around 1,400 generic pharmaceuticals and several brand medications. Its global workforce is about 30,000 people.
Prior to its proposed acquisition by Mylan, the Perrigo Company manufacturing plant was purchased from the pharmaceutical and health products company Wyeth, which operated the Georgia facility until 2004.