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news.ACETO has announced that its wholly-owned subsidiary, Rising Pharmaceutical, has closed the acquisition of 100% of the equity interests of PACK Pharmaceuticals, a national marketer and distributor of generic prescription and over-the-counter pharmaceutical products.
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The total transaction value is approximately $100m. At closing, ACETO paid $80m in cash, adjusted for working capital, and $5m in ACETO stock. The definitive purchase agreement also provides for potential additional payments totaling no more than $15m, based on the achievement of certain performance-based targets.
The company is also assuming certain of PACK’s obligations incurred in the normal course of business, subject to the terms and conditions of the purchase agreement. PACK recorded net sales of approximately $46m for calendar year 2013.
Based upon the consideration paid at closing, including receipt of working capital, this transaction represents a multiple of calendar 2013 EBITDA of 8.8 on a pro forma basis, adjusted to include expected cost savings.
Management expects the transaction, including deal-related expenses, to be approximately $0.08 per share dilutive to fiscal 2014 earnings, slightly accretive to the fiscal 2015 earnings, beginning in the second quarter, and increasingly accretive in years thereafter.
ACETO CEO Sal Guccione noted that the strategically important and complementary business combination of PACK with the company’s Rising Pharmaceutical business further increases the mix of higher margin finished dosage generic pharmaceuticals in ACETO’s revenue base and doubles the size of its development pipeline of new generic products.
"In addition, the acquisition establishes ACETO in branded generics for the first time. We welcome the management and employees of PACK Pharmaceuticals to ACETO and look forward to building significant shareholder value together," Guccione added.