Perrigo Co to buy Belgian pharmaceutical firm Omega Pharma for $4.5 bn

US manufacturer of private-label over-the-counter pharmaceuticals Perrigo Co today struck a deal to buy Belgian pharmaceutical company Omega Pharma NV for  €3.6 billion ($4.5 billion), including debt of €1.1 billion.

The acquisition of Omega Pharma would enable Perrigo to strengthen its position across Europe.

Perrigo, based in Ireland, said that it will pay 25 per cent of the equity value of the deal through placement of shares to Omega founder Marc Coucke and the rest will be funded through a combination of cash and debt.

The proposed transaction, which has been unanimously approved by the respective boards of both companies, is expected to close in the first quarter of calendar year 2015.

Perrigo beat rival suitors including Sanofi, Actavis and Boehringer Ingelheim, according to some media reports.

Founded in 1987 by pharmacy students Marc Coucke and Yvan Vindevogel, Omega Pharma is a specialist in medicines and care and health products, whose drugs including painkiller Solpadein and pacifiers Bibi.

The company was taken private by founder and CEO Marc Coucke and Waterland Private Equity Investments BV in 2012 for $1.15 billion.

Omega, based in Nazereth, generated approximately $1.6 billion of revenue during the 12 months ended 30 September 2014, making it the fifth-largest player within the European OTC market and the largest or second largest player in four individual European markets.

Omega, which has a commercial presence in 35 countries, owns many leading cough and cold, skincare, pain relief, weight management, and gastrointestinal treatment brands, among its portfolio of roughly 2,000 products.

Perrigo said that the acquisition will accelerate its international growth strategy and allow it to capture additional share of the $30 billion European OTC market.

Perrigo chairman, president and CEO, Joseph Papa, said, "We believe this strategic transaction will enhance shareholder value by further strengthening our industry-leading revenue and cash flow growth profile and by expanding market opportunities. Omega brings a leading OTC product portfolio, European capabilities, and a highly experienced management team to support Perrigo's continued growth."

Marc Coucke said, "Since our founding in 1987, we have been relentlessly executing our pharmacist-focused growth strategy across Europe. We have successfully developed a top OTC product portfolio and a leading European commercial infrastructure…….. Together, we will have a substantially broader product portfolio with established global platforms and commercial channels to better serve our customers and patients."

Established in Michigan in 1887, Perrigo, develops, manufactures and distributes over the counter drugs (OTC) and general prescription drugs, infant formulas, nutritional products, dietary supplements and other products.

The company's primary markets are spread over the US, Israel, Mexico, the UK, India, China and Australia.

In July last year, Perrigo, the largest US manufacturer of OTC drugs, acquired Irish biotechnology major Elan Corp Inc for approximately $8.6 billion in a consolidation move aimed at moving its base to Ireland and save taxes and gain on royalties.