Akorn to acquire assets from Kilitch Drugs in India
Akorn, Inc. announced that it has entered into an agreement to acquire certain assets of Kilitch Drugs (India) Limited (“KDIL”), a leading contract manufacturer of sterile injectables in India.
Akorn, Inc. (NASDAQ: AKRX), a niche generic pharmaceutical company, announced today that it has entered into an agreement to acquire certain assets of Kilitch Drugs (India) Limited (“KDIL”), a leading contract manufacturer of sterile injectables in India, as well as certain assets of NBZ Pharma Limited, for approximately $52 million in cash and future contingent payments totaling up to approximately $6 million based on the achievement of certain milestones and financial targets. The target assets consist of KDIL’s plant in Paonta Sahib in Himachal Pradesh, India, along with the associated contract manufacturing and international business, and certain product transfers from KDIL’s Navi Mumbai plant and NBZ Pharma Limited. The acquisition is expected to close after receiving local regulatory approvals as well as meeting certain customary conditions and consents in the next 90 days or so.
Acquisition Details
Five high quality cGMP manufacturing sites designed for regulated markets with approximately 230,000 square feet of manufacturing space located on over 14 acres of land
Two completed and operational plants and three under construction
The first operational plant has the capabilities to manufacture general injectables and is under expansion to expand capacities and add ophthalmic capabilities
The second operational plant has the capabilities of manufacturing Cephalosporins in various forms such as oral liquids & solids as well as dry syrups and dry powder injectables
The three plants under construction are expected to be operational in 2012 and will have the capabilities to make Carbapenems, Hormonal and Oncology related injectables
Diversified sterile injectable packaging configurations, such as liquid, dry powder, lyophilized, and prefilled syringes
Access to the fast growing Indian market through contract customers consisting of large domestic and multi-national pharmaceutical companies
Active and pending product registrations in over 25 countries in Latin America, Asia,
Middle East, Europe and Africa
Current product portfolio consists of nearly 300 formulations
KDIL and its promoters will separately sign a one year agreement prior to closing to provide a smooth transition, including day-to-day operational oversight and completion of certain expansion projects
KDIL and its promoters have signed a four-year non-compete agreement for the acquired assets
Raj Rai, Chief Executive Officer, commented, “We are excited about this acquisition as it expands both our capacities and capabilities for sterile injectables. With this platform we plan to offer a speed to market, high quality, comprehensive and cost effective solution to our domestic customers specifically for critical care products in categories such as anti-infectives and cancer that are consistently in short supply. Strategically, we will also establish a global footprint giving us access to the fast growing emerging markets. Finally, this acquisition provides us with a road map to become a leader in the generic injectable market.”
Financials
The transaction is expected to be accretive to 2012 EPS before the impact of transaction-related expenses such as purchase accounting charges, integration costs, and the amortization of intangible assets.
Advisors
PricewaterhouseCoopers Private Limited, India provided financial due diligence services and Khaitan & Co. provided legal advisory services to Akorn, Inc. in connection with this transaction.
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