US-based Lannett has expanded its specialty generic drugs portfolio with the acquisition of Belgian drugmaker UCB’s generic unit Kremers Urban Pharmaceuticals (KU) for $1.23bn.
As part of the transaction, Lannett issued $200m senior unsecured notes along with 2.5 million warrants to UCB, which may be net settled.
In addition, UCB will be eligible to receive contingent payments for Methylphenidate HCI ER when the product’s AB rating is restored.
Lannett chief executive officer Arthur Bedrosian said: "We are pleased to complete this transformational transaction that further establishes Lannett as a premier specialty pharmaceutical company.
"KU is a highly profitable business that extends our size, scale and reach. With the acquisition, we have expanded and strategically diversified our product portfolio and pipeline, and added complementary research and development expertise.
"I thank the leadership teams and employees of both organisations for their continuing dedication and look forward to the opportunities ahead for our combined company."
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The acquisition was financed by a combination of proceeds of a recently completed $1.285bn debt financing and cash.
Under the deal, Lannett entered a $1.035bn secured credit facility and issued $250m of senior unsecured notes (including those issued to UCB), with the proceeds used to fund the acquisition and related transaction costs.
The secured credit facility includes a $910m term loan facility and a $125m revolving credit facility, which will be available to Lannett for working capital and other general corporate purposes, such as future acquisitions.
KU currently has 18 generic drugs in the market that treat a variety of conditions, including attention deficit hyperactivity disorder (ADHD), gastroesophageal reflux disease, hypertension and respiratory disease.
KU also has 11 drug applications pending approval from the US Food and Drug Administration (FDA) and 17 drug candidates in development.
For the 12 months ending 30 June, the combined company generated pro-forma revenues of more than $800m.