The sellers are comprised of a consortium of private equity funds led by Nordic Capital, DLJ Merchant Banking (a Credit Suisse affiliate) and Avista Capital Partners.
The acquisition creates another strong global growth platform for Sandoz, the generic pharmaceuticals division of Novartis. Based on 2011 IMS data, the combined businesses will become the #1 global company in generic dermatology medicines, with estimated annual global sales of nearly USD 620 million, primarily in the US. Fougera has strong dermatology development and manufacturing expertise, with numerous launches planned for 2012 and beyond.
"The addition of Fougera's leading portfolio further strengthens Sandoz's differentiated products strategy and improves our ability to help patients and customers around the world by providing easier access to high quality, affordable dermatological medicines. Fougera brings us valuable technical capabilities in the area of topical dermatological products, particularly in the development and manufacturing of semi-solid forms such as creams and ointments," said Jeff George, Global Head of Sandoz.
"Fougera and Sandoz serve many of the same customers in the US, creating significant sales and cost synergies with Sandoz's sizeable US generics business," said Don DeGolyer, President of Sandoz US. "We welcome the team from Fougera Pharmaceuticals into Sandoz and Novartis."
Sandoz will leverage its leading position both in the US generics sector and its presence in over 130 countries worldwide to expand Fougera's existing sales base and bring its broad dermatology portfolio to new markets around the world.
Fougera is a specialty dermatology business with 2011 net sales of USD 429 million, and employs approximately 700 people across its two primary sites, located in New York. Fougera Pharmaceuticals operates two main businesses: Fougera, a leading player in the USD 2.1 billion US dermatology generics sector with 45 products and more than 200 SKUs and PharmaDerm, a branded specialty pharma business with 17 brands and over 40 SKUs.
The transaction requires regulatory approvals and is expected to be completed in the second half of 2012. Based on Fougera Pharmaceuticals' 2011 earnings before interest, taxes, depreciation, and amortization (EBITDA) of USD 173 million, the acquisition represents a multiple of 8.8 times. The transaction is expected to be accretive to core earnings per share (EPS) and will be financed from the Group's existing cash resources and cash flow. The transaction meets Novartis' strict financial criteria for acquisitions relative to targeted cash flow return on investment (CFROI) metrics.
Novartis provides innovative healthcare solutions that address the evolving needs of patients and societies. Headquartered in Basel, Switzerland, Novartis offers a diversified portfolio to best meet these needs: innovative medicines, eye care, cost-saving generic pharmaceuticals, preventive vaccines and diagnostic tools, over-the-counter and animal health products. Novartis is the only global company with leading positions in these areas. In 2011, the Group's continuing operations achieved net sales of USD 58.6 billion, while approximately USD 9.6 billion (USD 9.2 billion excluding impairment and amortization charges) was invested in R&D throughout the Group. Novartis Group companies employ approximately 124,000 full-time-equivalent associates and operate in more than 140 countries around the world.
Fougera Pharmaceuticals Inc. operates two primary divisions in the US focused on specialty pharmaceuticals in dermatology: Fougera, its generic dermatology medicines business, and PharmaDerm, its branded dermatology business. Founded in 1849, the Fougera division is the leading manufacturer and distributor of a wide range of topical products. The PharmaDerm division is dedicated to developing and commercializing novel prescription products to treat diseases and conditions of the skin - the largest organ of the human body.
1. IMS MIDAS at gross ex-manufacturer prices
2. IMS MIDAS at gross ex-manufacturer prices, excluding OTC