Teva is on the verge of its largest ever acquisition. The company today announced it was negotiating to buy Canadian company Novopharm in a share swap deal with a value of $300-$400 million.
Teva did not disclose additional details, but Novopharm, one of Canada's leading pharmaceutical companies, reported sales last year of over $700 million.
Novopharm recently sold a number of its operations. The body Teva expects to acquire, which concentrates Novopharm's generic business, had sales considerably less than the above figure. Nevertheless, the acquisition is a company with sales in the hundreds of millions of dollars.
US company Copley, which was acquired by Teva several months ago for $220 million, had revenues last year amounting to only $133 million. It is estimated that Novopharm's revenues from its generic division were much higher.
According to the sales multiple of the Copley transaction (1.7 - $220 million selling price on sales of $130 million), and assuming that Novopharm's generic division's sales were $200-$300 million, the value of the deal would be $300-$400 million.
The acquisition of Novopharm is expected to give Teva an initial in the Canadian market. Teva is already one of the leading generic companies in the US.
Published by Israel's Business Arena on 14 October, 1999