South Africa’s Aspen Holdings has agreed to acquire certain assets of Merck & Co.’s API manufacturing business and a portfolio of 11 niche branded finished dose-form products for $1 billion. The deal includes select parts of Merck’s API manufacturing site in Oss, The Netherlands and Sioux City, Iowa as well as sales offices in Oss and Des Plaines, Illinois. The $1-billion transaction consists of two parts, one for the API business and one for the 11 finished products, according to an Aspen company statement.
On the API side, Aspen Holdings will acquire the shares of a new Dutch company (“Dutch Newco”) containing the API business for approximately EUR 36 million ($48 million). The new company, “Dutch Newco” will simultaneously acquire inventory with an expected value of approximately EUR 300 million ($389 million). The API business consists of both small-molecule- and biologic-based manufacturing operations within Merck. It includes parts of Merck’s Moleneind and De Geer sites as well as the entire Boxtel site in Oss, The Netherlands, and a site in Sioux City, Iowa. It also includes sales offices in Oss and Des Plaines, Illinois. The to-be-acquired API business generated pro-forma revenue of EUR 284 million ($370 million) in 2012. The effective date of the API business acquisition is expected to be Oct. 1, 2013.
For the finished products, Aspen Global Inc., a wholly owned subsidiary of Aspen Holdings, has the option to acquire the finished products by exercising a call option for $600 million. The 11 products are: hormone-replacement therapies Ovestin, Sustanon, and Metrigen; the anticoagulant Orgaran; corticosteroids Decadron, Oradexon, Metricorten, and Meticortelone; the anabolic steroid Deca Durabolin; two drugs to treat hyperthyroidism, Thyrax and Strumazol; oral contraceptives Gracial and Novial; and the vitamin B complex Benutrex. The effective date of the finished products acquisition through the exercise of the option is Dec. 31, 2013, according to the statement by Aspen.
Aspen outlined several reasons for the acquisition. Merck’s API business manufactures heparin, the API used in the manufacture of Fraxiparine, one of the products for which Aspen made an offer made an offer to acquire from GlaxoSmithKline in June 2013. The API business manufactures the APIs used several of the 11 finished products Aspen will be acquiring under the transaction. Merck will continue to acquire APIs from Aspen under a 10-year supply contract, which provides ongoing volumes for the API business. Aspen sees opportunities to develop finished dosage form products from certain of the APIs such as hormones and peptides. Also, certain products will supplement Aspen’s growing footprint in Latin America and Asia Pacific.