By Lisa Kerner
Charlotte, N.C., Nov. 24 - King Pharmaceuticals, Inc. agreed to acquire Alpharma Inc. for $37.00 per share in cash for a total equity value of approximately $1.6 billion.
The definitive agreement was announced on Monday.
Both companies' boards of directors unanimously approved the transaction, which is expected to close by the end of the year.
King's tender offer for all of the outstanding shares of class A common stock of Alpharma was extended to 5 p.m. ET on Dec. 19 from Nov. 21.
The offer was originally set to end on Oct. 10, it was previously reported. Prior to the agreement, Alpharma's board had urged its shareholders to reject the offer.
According to King, approximately 30,713,179 shares, or 73%, of Alpharma's outstanding class A common stock had been tendered in the offer as of Nov. 21.
The merger agreement contains termination rights for both companies, including payment of a $60 million termination fee in specified circumstances, according to a form 8-K filed with the Securities and Exchange Commission.
"We are excited about the combination of King and Alpharma, which will create a leading specialty pharmaceutical company with greater scale and capabilities," King chairman, president and chief executive officer Brian A. Markison said in a company news release.
Alpharma's animal health division will diversify King's business and is expected to provide steady cash flow to fuel future strategic initiatives, King said.
The acquisition should be accretive to King's diluted earnings per share in the second full year following completion of the transaction. Synergies are anticipated in the range of $50 million to $70 million over the same time period, according to the release.
King, a Bristol, Tenn., pharmaceutical company, is being advised by Credit Suisse and Wachovia Securities, while Banc of America Securities LLC is advising Alpharma.
Alpharma is a Bridgewater, N.J.-based specialty pharmaceutical and animal health company.
| Acquirer: | King Pharmaceuticals, Inc.
|
| Target: | Alpharma Inc.
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| Announcement date: | Nov. 24
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| Transaction total: | $1.6 billion
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| Price per share: | $37.00
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| Termination fee: | $60 million
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| Expected closing: | End of 2008
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| Stock price for target: | NYSE: ALO: $33.50 on Nov. 21
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