Taro Pharmaceutical will be merged with Sun Pharmaceutical affiliates.
India's Sun Pharmaceutical Industries Ltd. (BSE: 524715) will take Taro Pharmaceutical Industries Ltd. (NYSE: TARO) private and merge it with Sun Pharmaceutical affiliates, after raising its offer. Taro's board of directors accepted the offer to purchase of at $39.50 in cash by Sun, which currently owns 66% of the company and all of its founders' shares, giving Sun 77.5% of the voting rights in the company.
Sun Pharmaceuticals closed the deal after raising its offer from $24.50 per share. The new offer amounts to $571 million
When the merger is completed, Taro will become a private company, and will be delisted from the New York Stock Exchange.
Taro was founded in 1950 and has a manufacturing plant in Haifa and its chairman is Israel Makov. Sun Pharmaceuticals acquired control of the company, after a bitter legal battle with Taro's previous controlling shareholders, in 2010. Sun Pharmaceuticals said that it would not close the Haifa plant, or transfer operations to India, and it has invested in Israel. On the other hand, Sun said that it would not take Taro private, and it has now done just that.
Last week, Taro published its financial report for the first fiscal quarter of 2012. Revenue rose 42.6% to $159.2 million from $111.6 million for the corresponding quarter, and net profit attributable to majority shareholders rose 76% to $62.9 million from $35.7 million.
Cash flow from operations fell to $19.2 million for the first fiscal quarter from $33.3 million for the corresponding quarter, mainly due to the payment of income taxes, and the company's cash and cash equivalents rose by $18.3 million during the to $352.6 million at the end of June. Taro increased its R&D spending by 47% to $11.5 million.
Taro's share price closed at $40.97 on Friday, giving a market cap of $1.82 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012
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