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news.Generic pharmaceutical company Aspen Group has agreed to acquire an active pharmaceutical ingredient (API) manufacturing business and finished dose form molecules from MSD, (Merck's Netherlands arm), for $1bn.
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The agreement includes the purchase of API manufacturing business in the Netherlands with a satellite facility and sales office in the US, and an option to acquire a portfolio of 11 MSD finished dose form molecules targeting a range of diseases.
Under the transaction Aspen will acquire the shares of the API business’ new company, Dutch Newco, for approximately €36m, as well as have an option to buy products for a consideration of $600m.
Dutch Newco’s properties include parts of the Moleneind and De Geer sites and the entire Boxtel site in Oss, the Netherlands, as well as Sioux City, Iowa, in the US. The new company will simultaneously acquire inventory for a consideration of approximately €300m.
The products manufactured at the sites include biochemicals and chemicals involving biological processes and synthetic process respectively.
Main brands of 11 finished dosage form molecules being acquired are Ovestin, Sustanon, Metrigen, Orgaran, Decadron, Oradexon, Metricorten, Meticortelone, Deca Durabolin, Thyrax, Strumazol, Gracial, Novial and Benutrex.
In terms of a medium term supply contract between Aspen Global and MSD, the products will initially be manufactured under the pre-existing MSD manufacturing arrangements.
Aspen Group chief executive Stephen Saad said the company’s primary strategy is to globalize the business, increase representation across a number of additional territories and provide support growing global presence with a differentiated pipeline.
"This Transaction provides a platform to contribute to the achievement of this strategic intent by enabling Aspen to access a niche range of APIs and finished dosage products," Saad added.
Subject to standard conditions, the transaction will be funded from new debt facilities while the deferred payments are expected to be funded from Aspen’s existing cash at the time payment is due.
The sale is expected to be completed by the end of 2013. Post the acquisition, MSD will continue to own its other businesses in the Netherlands, including two production units and the MSD development center and support functions.