Actavis, Inc. (NYSE: ACT) has announced that it will acquire Warner Chilcott plc (NASDAQ: WCRX) in a stock-for-stock transaction valued at approximately $8.5 billion. This represents a 43 percent premium compared to Warner Chilcott's volume-weighted average trading price of $14.00 for the 30 day trading period ending on May 9, 2013 (the day before Warner Chilcott disclosed it was engaged in preliminary discussions with Actavis) and a 34 per cent premium to the Warner Chilcott closing share price on May 9, 2013 of $15.01. Warner Chilcott shareholders will receive 0.160 shares of
the combined company, or $20.08 per Warner Chilcott share, based
on Actavis's closing share price of $125.50 on May 17.
Actavis shareholders will receive one share of New Actavis for each Actavis share they own upon closing. The transaction will be taxable, for U.S. federal income tax purposes, to Actavis shareholders.
Actavis shareholders will receive one share of New Actavis for each Actavis share they own upon closing. The transaction will be taxable, for U.S. federal income tax purposes, to Actavis shareholders.
Transaction Valuation and Rationale
The deal values Warner chilcott at 3.4x revenue 21 x earnings and 6.2x EV/EBITDA.
The deal will create a specialty pharmaceutical company with about $11 billion in combined annual revenue.
The deal will create a specialty pharmaceutical company with about $11 billion in combined annual revenue.
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