Aspen up on sale of thrombosis branch to Mylan |
The proceeds are earmarked to reduce debt
ASPEN Pharmacare’s shares surged more than 7 percent yesterday after the pharmaceutical company said it would sell its European thrombosis business to Mylan Ireland for € 641.9 million (R12.66 billion), with the proceeds earmarked to reduce debt.
The share closed at R141.33. Aspen is disposing of the business through Aspen Global Incorporated (AGI), its wholly owned subsidiary. Mylan will acquire the commercialisation rights and related intellectual property relating to the thrombosis business, plus the cost of the related inventory.
Mylan has retained AGI through its subsidiary, Aspen France, as its distributor of the products in France.
As part of the transaction, Aspen and Mylan will enter into a manufacturing and supply agreement in terms of which Aspen will supply products to Mylan for the territory.
“Mylan represents the ideal partner to acquire these assets given the company’s strength in Europe, commitment to the injectables and biosimilars space and comparable employee-first culture and values,” Aspen said.
Aspen anticipated that the transaction would be completed before the end of December. Mylan is a global pharmaceutical company, with principal offices in the US. It has a significant presence in Europe, and it generated sales of more than $4bn (R66.72bn) in 2019. Mylan will pay an upfront cash of € 263.2m upon completion of
the transaction and a deferred cash consideration of € 378.7m payable on June 25, 2021.
In May last year, Mylan exercised its option to buy Aspen’s portfolio of products in Australia for a maximum consideration of A$188m (R2.28bn).
The group said the rationale behind the sale of the European business came after it decided in March 2019 that it would undertake a strategic review in respect of its Europe CIS commercial business.
“The review has focused on assess
ing alternative models for the conduct of the business and in determining the range of available options with a view to optimising the group’s sustainable returns. In line with the objectives of the strategic review, Aspen is of the view that the disposal of the commercialisation rights to the products while continuing to manufacture and supply the products is an attractive option,” the group said.
Aspen said the transaction supported its strategy of continuing to reshape the group towards a greater
concentration of revenue in emerging markets.
“The thrombosis business that Aspen will retain is almost exclusively in emerging markets and well supported by strong sales representation,” Aspen said.
The disposal will also allow Aspen to achieve a more streamlined business in Europe and the positive cash inflow from the proceeds will allow it to further strengthen its balance sheet and assist in establishing financial headroom for future investments.