Teva Pharmaceutical
Industries (NASDAQ: TEVA) announced today that it had signed a
definitive agreement to acquire 100% of Novopharm from Dan Family
Holdings. The execution of the definitive
agreement follows a prior releases of October 19, 1999 and December
2, 1999 relating to the possibility of such a transaction. Upon the
consummation of the transaction, the Dan Family will be entitled to
receive approximately 4.2 million Teva Ordinary Shares, representing
approximately 6% of Teva's outstanding share capital (on a fully
diluted basis).
At closing, a portion of the shares will be issued to the Dan
Family in the form of non-voting exchangeable shares of a Teva
Canadian acquisition subsidiary. These exchangeable shares will be
exchangeable by the Dan Family at any time, in whole or in part, into
Teva Ordinary Shares at a one-to-one exchange ratio. The balance of
the share consideration will be allotted to the Dan Family in the form
of Teva Ordinary Shares.
It is anticipated that the closing of the transaction will take
place on or before March 31, 1999.
Novopharm is a privately held group of Canadian companies, and is
the second largest generic company in Canada (with a market share of
about 20%). The Novopharm group also has a substantial presence in the
U.S. generic market as well as in Hungary and markets its products in
over 50 countries. The company's sales (the part being acquired by
Teva) for the first 9 months of 1999 reached US$297 million, of which
approximately 47% were in Canada, 22% in the United States and 29% in
Hungary.
Novopharm's primary business is the development, production and
marketing of generic prescription pharmaceuticals including sterile
products, vitamins and over-the-counter products. Novopharm has more
than 10 production sites situated in Canada, the United States and
Hungary. The headquarters and principal production sites are based in
Toronto. Novopharm presently employs approximately 2700 employees, of
which approximately 55% are in Canada, 5% in the United States and 40%
in Hungary.
Novopharm has been active in Canada since 1965, and established
its own presence in the US generic market in 1987.
Novopharm operates in Hungary through a 55% holding in Human
Serum & Pharmaceutical Manufacturing Co. Human is a Hungarian
company traded on the Budapest stock exchange, which produces sterile
products for the local Hungarian market and for export to Canada, the
United States and other countries.
Novopharm's research and development is focused on generic drugs.
These activities encompass a wide range of technologies for slow
release of tablets and capsules, injectibles and others. During the
last three years Novopharm introduced into the Canadian market, the
U.S. market and other markets an average of 25 new generic products
per annum.
Novopharm presently has numerous pending applications for generic
products with the Canadian Health authorities and with the FDA in the
United States, several of which are additional to Teva's pending
product list.
At September 30, 1999, Novopharm's total indebtness to financial
institutions totaled US$218 million.
The acquisition of Novopharm was approved by both companies
subject to the receipt of all approvals required by Canadian,
American, Hungarian and Israeli Law, upon closing, including the
execution of the private placement and registration in principle of
the allotted shares by the Tel Aviv Stock Exchange.
Depending on the implementation of certain pending regulations
under the new corporate law adopted in Israel on February 1, 2000,
Teva may be in a position to consummate the transaction without a
shareholder vote. Should such a vote be required, it is anticipated
that shareholders meeting would be convened prior to the end of March.
In the United States, Hart-Scott-Rodino clearance of the
transaction has already been obtained. In Canada, a premerger
notification has been made under the Competition Act (Canada) and the
waiting period in respect thereof has expired. An application for
review has been filed under the Investment Canada Act in connection
with the transaction and Teva is in the final stages of obtaining
approval thereunder.
The acquisition of Novopharm will enable Teva to immediately
become a major presence in the Canadian pharmaceutical market, a new
and interesting market for Teva, will further enhance Teva's position
as a market leader in the U.S. generic market, and will further Teva's
expansion into several European markets as well. The combination of
Teva and Novopharm has the potential for high synergies in several
areas, particularly in sales, in reduced expenses, and in R&D
productivity. The Company's management believes that the acquisition
will strengthen Teva's position as one of the global leaders in the
generic pharmaceutical marketplace, and will be accretive already in
the first 12 months from closing.
Teva Pharmaceutical Industries is Israel's largest
pharmaceutical company, with 80% of its sales outside Israel, mainly
in the United States and Europe. The Company develops, manufactures
and markets generic and branded human pharmaceuticals, active
pharmaceutical ingredients, medical disposables and veterinary
products.
Published by Israel's Business Arena on February 2, 2000.