Brent Saunders, chief executive officer and president of Forest, remarked, "Forest is a great fit with Actavis due to our strong legacy in branded specialty and primary care pharmaceuticals with a best in class commercial team, a top-notch drug development organization and a long history of successful partnerships. The acquisition builds on our blockbuster line call strategy in CNS and GI and dramatically extends our reach beyond the U.S. market. By joining forces with Actavis, we become more relevant to key physicians and customers through blockbuster franchises in CNS, Women's Health, GI and Urology, as well as Actavis' global generics business." Mr. Saunders will join the board of the new company, which will be led by Paul Bisaro, chairman and chief executive officer of Actavis.
Said Mr. Bisaro, "With this strategic combination, we create an innovative new model in specialty pharmaceuticals leadership, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development, and — most important — the ability to drive sustainable organic growth. Bolstered by one of the deepest and most diversified product portfolios in the industry with an exceptionally strong pipeline, this transaction creates a powerful engine for generating long-term, double-digit revenue and earnings growth."
The acquisition is expected to generate approximately $1 billion in operating and tax synergies within three years of its close. These synergies exclude additional revenue or manufacturing synergies and are in addition to standalone synergies announced publicly by Forest as part of its Project Rejuvenate and acquisition of Aptalis.
On a pro forma combined basis for full year 2014, the combined company would have an CNS franchise of approximately $2 billion; Gastroenterology (GI) and Women's Health franchises valued at $1 billion each; a Cardiovascular franchise generating $500 million; and Urology and Dermatology/Established Brand franchises each approaching $500 million in annual sales.
The acquisition has been unanimously approved by the boards of Actavis and Forest, and is subject to the approval of the shareholders of both companies, as well as customary regulatory approvals, including a Hart-Scott-Rodino review in the U.S. Greenhill & Co. is serving as financial advisor to Actavis, and Latham & Watkins LLP is serving as Actavis' legal advisor. J.P. Morgan is serving as financial advisor to Forest, and Wachtell, Lipton, Rosen & Katz is serving as Forest's legal advisor. Activis currently has bridge loan commitments from BofA Merrill Lynch and Mizuho Bank, pending execution of its final financing plans.