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news.Prestige Consumer Healthcare has agreed to acquire specialty pharmaceuticals provider Akorn Operating Company’s Consumer Health business for approximately $230m.
Akorn’s TheraTears eye care brand is used for relief of dry eyes. Credit: Sofie Zbořilová from Pixabay.
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Prestige Consumer Healthcare has agreed to acquire specialty pharmaceuticals provider Akorn Operating Company’s Consumer Health business for approximately $230m.
Under the terms of a definitive agreement signed by the companies, Prestige will buy Akorn’s over-the-counter brands TheraTears, Diabetic Tussin, MagOx, Multi-betic and Zostrix.
TheraTears eye care brand, used for relief of dry eyes, represents nearly 80% of the revenues of Akorn’s consumer product portfolio. This brand is expected to expand Prestige’s eye care franchise and provide further growth opportunities in the dry eye sector.
The other four brands being acquired are part of the VMS and Cough & Cold categories.
Prestige stated that Akorn’s portfolio complements its operational model with outsourced manufacturing and supply similar to its current business.
Prestige Consumer Healthcare chairman and CEO Ron Lombardi said: “The acquisition is a match with our criteria that focuses on long-term brand building opportunities, fits with our business model and provides disciplined returns.”
The company estimates that the acquisition will add approximately $20m of annual EBITDA and $60m of annual revenue.
It is planning to fund the transaction through funds from existing credit facilities and available cash.
For Akorn, the divestiture is intended to allow focus on its portfolio of core prescription drugs, along with investments to support growth.
Akorn president and CEO Douglas Boothe said: “This transaction represents the continued execution of our strategy to focus on our strong portfolio of prescription pharmaceutical products.
“We will continue to invest in our core business and strengthen our portfolio of prescription generic and branded drugs.”
Subject to customary closing conditions, the deal is expected to be concluded during the fiscal second quarter.
After closing, the acquired brands are set to leverage current infrastructure for a timely integration.
For the transaction, Sawaya Partners is serving as an exclusive financial advisor while Reed Smith as legal counsel to Prestige. Akorn has William Blair as financial advisor and Willkie Farr & Gallagher as legal counsel.
