Perrigo Company (NYSE:PRGO; TASE:PRGO) announced today that it has reached a definitive agreement to sell its Generic Rx Pharmaceuticals business to Altaris Capital Partners LLC for $1.55 billion, including $1.5 billion in cash. As part of the consideration, Altaris will also assume more than $50 million in potential R&D milestone payments and contingent purchase obligations with third-party Rx partners. The deal will be completed in the third quarter. In the past there were estimates that Perrigo's generic activities were worth between $2 and $2.5 billion.
Some of Perrigo's generic activities are conducted in Israel and in 2019 the company signed a deal promising that its Rx activities would not be moved from Yeruham for at least five years. Perrigo has 850 employees in Yeruham. The plant was acquired from Mori Arkin's Chemagis for $800 million in 2005. In 2017, Perrigo sold some of its Israeli activities to an investment fund for $130 million, and this latest sale ends all involvement of Perrigo in Israel. It also raises the possibility that Perrigo might delist from the Tel Aviv Stock Exchange (TASE).
Perrigo CEO and president Murray S. Kessler said, "The sale of our Generic Rx business is the most impactful step in Perrigo's transformation plan. This transaction establishes Perrigo as a pure-play global consumer self-care company with industry leading fundamentals. Perrigo Consumer Self-Care will have a focused portfolio with over $4 billion in revenues focused on the growing trends towards self-managed health and wellness. This transaction also provides the company with increased financial predictability and flexibility. After the transaction closes, Perrigo expects to have more than $2 billion in cash available to advance its consumer self-care strategy, preferably through prudent and revenue accretive M&A. This is an exciting day for Perrigo."
Altaris managing director Garikai Nyaruwata said, "Given our experience in the pharmaceutical sector and track record of corporate carve-out transactions, we believe we are well-positioned to support the Rx business as it becomes a standalone company focused on its mission of developing and marketing affordable pharmaceutical products."
Published by Globes, Israel business news - en.globes.co.il - on March 1, 2021
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