Perrigo buys Paddock Laboratories for $540m

The private Minneapolis-based company produces specialty generic drugs.

Perrigo Company (Nasdaq:PRGO; TASE:PRGO) will acquire generic drug maker Paddock Laboratories Inc. for $540 million in cash. The private Minneapolis-based company produces specialty generic drugs. Perrigo estimates that it will receive a net tax benefit of $95 million on the deal, reducing the net purchase price to $445 million. The company will finance the acquisition from its own sources and bank loans.

Perrigo says that the acquisition will add $200 million to its revenue in the first fiscal year. Paddock will add 35 new products and 25 products waiting for FDA approval to Perrigo's basket of products. Perrigo expects Paddock to boost its GAAP-based earnings per share by $0.05 ($4.7 million) in the 2012 fiscal year, and $0.25 per share ($23 million) net of acquisition costs.

The acquisition is due to be completed in Perrigo's fourth fiscal quarter of 2011, i.e. by June.

Perrigo chairman and CEO Joseph Papa said, “This acquisition is an important next step forward in executing on our strategy to expand our specialty portfolio of generic Rx products."

Paddock Laboratories chairman Bruce Paddock founded the company in 1977. It has more than 400 employees. Its CEO is Michael Graves.

Perrigo, an over-the-counter drug maker, entered Israel when it acquired Agis for $820 million. It previous large acquisition was its purchase of infant formula manufacturer PBM Holdings Inc. last year for $808 million.

Perrigo's share price rose 3.6% at the opening on Nasdaq today to $68.66, giving a market cap of $6.32 billion. The share price rose 3.7% on the TASE today to NIS 245.50.

Published by Globes [online], Israel business news - www.globes-online.com - on January 20, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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