Alpharma announces sale of generics businesses to Actavis

By E. Janene Geiss

Philadelphia, Oct. 17 - Alpharma Inc. announced Monday that it reached an agreement to sell its U.S. and international generics businesses to Actavis Group for $810 million in cash.

The sale has been approved by the boards of directors of both companies and is expected to close in the fourth quarter, according to a news release.

Alpharma is retaining ownership of its Branded Pharmaceuticals, Active Pharmaceutical Ingredients and Animal Health businesses, as well as ParMed Pharmaceuticals Inc., its U.S. pharmaceutical distribution business, officials said in the release.

For the six-month period ending June 30, the retained businesses generated 41% of the total company revenue and 64% of the total operating income before corporate and unallocated expenses, officials said in the release. The 2006 EBITDA for the retained businesses is expected to be about $135 million, officials said.

The divestiture will improve Alpharma's ability to invest in growth and diversification opportunities and allow the company to repay outstanding debt by mid-2006, the release said.

"The divestiture will concentrate our focus on our specialty pharmaceutical businesses, simplify our organization and provide significantly improved financial capacity to acquire products and technologies and create alliances that will drive long-term growth," Alpharma vice chairman, president and chief executive officer Ingrid Wiik said in the release.

The Fort Lee, N.J.-based company said it expects to reduce annual costs by at least $15 million as a result of streamlining its infrastructure.

The company also said that due to the sale of its generics business, it temporarily suspended its search for a chief executive officer to succeed Wiik, who earlier this year announced that she would retire when a successor was named.

Banc of America Securities LLC and Kirkland & Ellis advised Alpharma on the divestiture, the release said.

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