Concordia Healthcare boosts drug portfolio with $1.9 billion deal

Tue Sep 8, 2015 11:58am EDT
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By Amrutha Penumudi

(Reuters) - Canada's Concordia Healthcare Corp CXRX.O (CXR.TO: Quote) said it would buy Amdipharm Mercury Ltd from private equity firm Cinven for $1.9 billion, boosting its portfolio of drugs to 200 from 20 and giving it a foothold in overseas markets.

Amdipharm Mercury, created with the merger of Mercury Pharma and Amdipharm in 2012, buys off-patent drugs from big pharma companies such as Novartis AG NOVN.VX, GlaxoSmithKline Plc (GSK.L: Quote) and Abbott Laboratories (ABT.N: Quote) and sells them in about 100 countries.

Amdipharm's 190 drugs are used in several difficult-to-treat conditions including hyperthyroidism, depression and bacterial infections.

Concordia's shares fell nearly 10 percent on the Toronto Stock Exchange after the deal, the biggest in the company's history. The stock has more than doubled in value this year.

Amdipharm is Concordia's second acquisition this year as the Canadian company tries to gain scale through acquisitions, much like its larger rival Valeant Pharmaceuticals International Inc (VRX.TO: Quote).

Concordia CEO Mark L Thompson called the acquisition a "powerful cash-machine" that would help the company with future deals.

The deal is expected to boost Concordia's sales to about $870-$920 million in 2015 on a pro-forma basis, of which about $530-$560 million is expected to come from Amdipharm.

"Previously Concordia was looking to acquire U.S. assets. Now they can look to acquire on a global basis ... that's the main thing they are gaining here," Laurentian Bank Securities analyst Joseph Walewicz said.   Continued...