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Strategies & Market Trends : Speculating in Takeover Targets -- Ignore unavailable to you. Want to Upgrade?

To: richardred who wrote (2185)	4/20/2009 9:51:08 AM
From: richardred	Read Replies (1) \| Respond to of 7259

Glaxo to buy Stiefel Labs for up to $3.6 billion * Monday April 20, 2009, 7:08 am EDT By Ben Hirschler LONDON (Reuters) - GlaxoSmithKline Plc (LSE:GSK.L - News) is to buy privately owned Stiefel Laboratories Inc for up to $3.6 billion to diversify its business by adding treatments for acne, dermatitis and other skin complaints. The U.S. acquisition is the latest in a string of deals in the drugs sector, but is significantly smaller than recent mega-mergers, reflecting the British-based group's declared focus on bolt-on buys. Stiefel, part-owned by buyout firm Blackstone Group (NYSE:BX - News), is the world's largest independent dermatology company, with a range of prescription and over-the-counter products. It was put up for sale a month ago and attracted interest from a number of large pharmaceutical companies, including Novartis AG (VTX:NOVN.VX - News), Sanofi-Aventis SA (Paris:SASY.PA - News) and Johnson & Johnson (NYSE:JNJ - News), according to people familiar with the matter. Glaxo, the world's second-largest drugmaker, is paying $2.9 billion in cash for Stiefel and will take on about $400 million of Stiefel's debt. A further $300 million cash payment is contingent on future performance, the companies said on Monday. That overall price is four times Stiefel's 2008 sales of around $900 million, but the British group expects to extract substantial savings from merging the business, which will retain the Stiefel identity, into its structure. Glaxo expects annual pre-tax cost savings of up to $240 million by 2012, with integration costs of some $325 million over the next three years. Excluding those costs, the deal will dilute Glaxo's earnings per share by less than 1 percent in 2009 and be 1 percent to 2 percent earnings accretive to EPS in 2010. DERMATOLOGY TREBLES The purchase will nearly treble the size of Glaxo's skincare business, giving it an 8 percent share of the global prescription dermatology market. "It's an opportunity for Glaxo to strengthen its product mix," said Navid Malik, industry analyst at Matrix Corporate Capital. "This business should be very complementary." Glaxo shares were 1.2 percent higher at 10.51 pounds by 1057 GMT, outperforming a 0.7 percent gain in the European healthcare sector (^SXDP - News). Deutsche Bank analysts said the deal was not particularly cheap, but the four times trailing revenue paid was below the 4.6 times average of major drugs deals in recent years and there could be potential for significant revenue synergies. Founded in Germany in 1847, Stiefel is based in Coral Gables, Florida, and produces a range of skin treatments including Duac, for acne, and Olux E, for dermatitis. The purchase fits with the strategy of Glaxo Chief Executive Andrew Witty, who wants to broaden the focus of the group away from its traditional reliance on small-molecule prescription medicines -- or pills. Witty has already struck several smaller deals to build Glaxo's presence in emerging markets, and last week signed a deal with Pfizer Inc (NYSE:PFE - News) to merge their HIV operations into a new company, which will be 85 percent-owned by Glaxo. He has rejected the idea of a large-scale deal, along the lines of Pfizer's $68 billion purchase of Wyeth (NYSE:WYE - News) or Merck & Co Inc's (NYSE:MRK - News) $41 billion acquisition of Schering-Plough Corp (NYSE:SGP - News). But analysts expect him to buy more smaller companies in consumer health, vaccines, biotech and emerging markets in a drive to reduce Glaxo's risk profile. Stiefel is controlled by the founding Stiefel family and current CEO Charles Stiefel will continue to lead the enlarged dermatology business under the Glaxo umbrella after the deal closes in the third quarter of 2009. Private-equity group Blackstone, which invested $500 million in the company in 2007 to take a substantial minority stake, advised Stiefel on the sale. Glaxo was advised by Lazard. (Editing by Sharon Lindores) finance.yahoo.com

To: richardred who wrote (2185)	4/23/2009 11:39:10 AM
From: richardred	Respond to of 7259

Pfizer / Wyeth Merger Will Force Big Pharma to Consolidate Says New Report by URCH Publishing Further M&A Deals within the Year Predicts URCH Publishing * Thursday April 23, 2009, 5:01 am EDT LONDON--(BUSINESS WIRE)--Pfizer’s merger with Wyeth will bring significant change to the pharmaceutical industry and may result in more large deals before the end of the year, suggests a new report. “Mergers and Acquisitions in the Pharmaceuticals Sector, 2009 - Critical success factors for competing in a consolidating market” from URCH Publishing, says that a number of major pharmaceutical players will follow in the footsteps of Pfizer and enter into significant M&A transactions. "2009 is set to redefine the structure and dynamics of the pharmaceutical industry in a way not seen since the year 2000, says Steve Seget, the report’s author. The 111 page report study that it is likely that the ‘mega-M&A’ wave started by the three deals agreed in the first quarter of 2009 is not yet finished, with possibly three more mega-deals to go, which will see movement in the top ten pharmaceutical company list. “The two most likely deals appear to be the acquisitions of Bristol-Myers Squibb and Bayer,” commented Mr Seget. “Currently the best placed acquisitors appear to be Sanofi-Aventis and Novartis, but we should not rule out Johnson & Johnson or GlaxoSmithKline, if its acquisition of Allergan does not come to fruition.” The companies under most pressure to enter into a significant M&A are Eli Lilly, GlaxoSmithKline and Takeda. Each company must actively review transformational M&A opportunities in order to satisfy investors and continue to compete with those companies who have already merged Significant pharmaceutical industry consolidation will lead to a fundamental shift in the market dynamics across all major product categories. Key challenges for all companies include managing the disruption caused by consolidation and exploiting economies of scope and scale. Competing in a consolidated world will require a balance between delivering scale and diversification while generating innovation and flexibility, notes the report. “Mergers and Acquisitions in the Pharmaceuticals Sector, 2009 - Critical success factors for competing in a consolidating market” is available from URCH Publishing. tinyurl.com About URCH Publishing Ltd (http://www.urchpublishing.com) URCH Publishing Ltd is an independent business information publisher dedicated to delivering quality information products to the global pharmaceuticals industry. For more information contact URCH Publishing on +44 (0) 20 7060 1099 or email service[@]urchpublishing.com. finance.yahoo.com

To: richardred who wrote (2185)	8/4/2009 8:57:56 PM
From: richardred	Read Replies (1) \| Respond to of 7259

More Pharma Mergers to Come? Posted by: Arlene Weintraub on August 04 AllerganLogo.jpg Rumors that Botox maker and eye-products giant Allergan might be a takeover target pushed the company’s shares up 4% on August 3 to $55.55. Among the oft-discussed suitors is drugmaker GlaxoSmithKline. Pharma industry CEOs tend to dismiss mergers as a bad idea, but not these two: In conversations over the past year with BusinessWeek, Glaxo’s Andrew Witty and Allergan’s David Pyott stopped short of saying they wouldn’t participate in the drug industry’s consolidation wave. Glaxo certainly has the resources to make a big move. Just before Witty took over in mid-2008, Glaxo raised $9 billion in a debt offering, prompting the CEO to tell BusinessWeek a few months later, “we have the capacity to do some transactions.” He shunned the idea of a mega-merger, but admitted that all it would take to change that mindset would be “two people getting together in a room and deciding it’s a good idea.” Buying Allergan wouldn’t represent nearly as a big a bite as Pfizer’s acquisition of Wyeth for $68 billion, or Merck’s purchase of Schering-Plough for $41 billion. Allergan’s market cap is a mere $17 billion. And it would enhance Glaxo’s portfolio in a few ways. Allergan would offer an entry to the market for medical devices, most importantly breast implants and gastric bands for weight-loss surgery. And it would boost Glaxo’s already-strong presence in prescription drugs and consumer products. Over breakfast in New York in May, Pyott said Allergan had long been a rumored takeover target. Pyott warned, however, that the advantages that come from slashing costs after mergers “only lasts for so long. Then you’ve got to do something else.” The smartest deals, he said, have provided both efficiency and innovation opportunities. Allergan has a lot to offer on the innovation front. On July 23, the FDA approved Allergan’s Acuvail for the treatment of pain following cataract surgery. The company is awaiting several more approvals, and on July 21, the FDA granted “fast-track” approval status to Allergan’s bladder-cancer drug. As for Botox, it continues to grow, largely because it’s approved not just to treat wrinkles, but also to treat medical conditions such as cervical dystonia. Pyott has a sense of humor about the rumor mill, comparing his company to the knockout girl who’s in every playboy’s little black book. “We’re always in the bankers’ books,” he said. “I always say, it’s better to be attractive than ugly.” businessweek.com