Teva Pharmaceutical Industries Ltd. (Nasdaq:TEVA; TASE:TEVA) and biopharmaceutical company Cephalon (Nasdaq: CEPH) today announced that their boards of directors have unanimously approved an agreement by which Teva will acquire all of Cephalon's shares for $81.50 per share in cash, or a total value of $6.8 billion. This is a 5% premium on Cephalon's closing share price on Nasdaq on Friday.
The transaction is not conditional on financing and is expected to be completed in the third quarter of 2011.
Cephalon had revenue of $2.76 billion and net profit of $657 million in 2010 mainly from brand drugs treating cancer, central nervous system disorders and pain. The company has a market cap of $5.8 billion. It was founded in 1987, is based in Pennsylvania, and has 3,726 employees in its various facilities.
Teva's share price, which has been weak over recent months, was up 2.25% on the TASE at NIS 159.20 after news of the acquisition was released this afternoon. The share price closed down 0.9% at $45.73 on Nasdaq yesterday, giving a market cap of $43 billion.
Teva says that the transaction serves its long term strategy of developing its branded and specialty pharmaceuticals business through diversification and expansion of the company’s product portfolio and pipeline. "The enlarged company will utilize its complementary commercial, R&D and operational capabilities and capture value by providing customers with a broad spectrum of specialty branded products," the announcement said.
Teva and Cephalon together have a branded portfolio with $7 billion in sales, and a pipeline including more than 30 late-stage compounds. According to Teva, the transaction will create immediate and sustainable value in niche therapeutic areas including CNS, oncology, respiratory and pain management.
Teva CEO Shlomo Yanai said, "We are embarking today on a new and exciting future for Teva’s branded business, and we are delighted that we will be working together with the Cephalon team.This is transforming for Teva’s branded business, as it will help us to deliver on our strategic goal of creating a diversified, multi-faceted company. We have been following Cephalon for a long time and are very happy with the opportunity to join forces. Our significantly broader portfolio will permit marketing and sales synergies and enhance profitability. We look forward to welcoming our colleagues at Cephalon to the Teva family.”
Cephalon CEO Kevin Buchi said, "Cephalon's merger with Teva is the result of a rigorous process that included a review of a wide-range of strategic options undertaken by Cephalon's board of directors and management team to maximize value and deliver significant returns to shareholders. By joining forces with Teva, we will benefit from their scale, worldwide reach and operational excellence, allowing us to further pursue our shared goals of delivering new, innovative therapies to help patients around the world. Teva shares our strong commitment to R&D, and we believe our pipeline will thrive under their leadership. We look forward to working with the Teva team to ensure a smooth transition and complete the transaction as expeditiously as possible.”
Published by Globes, Israel business news - www.globes-online.com - on May 2, 2011
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