Shionogi & Co., a major Japanese drugs manufacturer and US-based specialty pharmaceutical co. Sciele Pharma, Inc. (SCRX), announced on Monday a definitive agreement under which Shionogi will acquire Atlanta-based Sciele Pharma Inc. shares, in an all-cash deal valued at $1.42 billion.
The acquisition on the part of Shionogi will be made through a wholly-owned US subsidiary for all the outstanding shares of Sciele’s common stock at a price of $31 per share. Shionogi will spend $1.1 billion and $325 million of capital required for the redemption of senior convertible notes. With this move the Japanese drug maker aims at expanding its marketing channel base in the U.S. and at the same time, accelerate the overseas marketing strategy for its pipeline of drug candidates which will lead the co. in a maximization of profits.
Upon completion of the acquisition, Sciele will become an indirect wholly-owned subsidiary of Shionogi and will continue operations in Atlanta, GA as a standalone business unit.
Sciele, founded in 1992 – is a pharmaceutical company specializing in products focused on cardiovascular disease and diabetes women’s health and pediatrics. It offers products, such as Nitrolingual pump spray to provide acute relief of an attack or prophylaxis of angina pectoris, Sular to treat hypertension, Altoprev to treat hypercholesterolemia and coronary heart diseases, Fortamet, an adjunct to diet and exercise in lowering blood glucose in type 2 diabetes patients etc. The co. has achieved steady sales expansion. In fiscal ’07, they posted sales of $382 million from $293 in the previous year. Net Income of $45 million with overall assets worth more than $800 million from $590 million in fiscal ’06.
Mr. Patrick Fourteau, Chief Executive Officer and a Director of Sciele, said, “Sciele will be a stronger company as part of Shionogi, which is one of the leading pharmaceutical companies in Japan due to its extensive product pipeline”.
On Friday, Sciele shares (SCRX) closed the trading session down 2.0% at $19.27.
Shionogi plans to consolidate Sciele’s earnings for the three months ending December 2008 from the second half of fiscal year ending March 2009, and EPS is expected to become accretive from fiscal year ending March 2010.
The Board of Directors of Shionogi and Sciele have each approved this transaction.