GlaxoSmithKline has reached an agreement to divest certain over-the-counter (OTC) brands in select territories to South Africa’s Aspen Pharmacare Holdings for approximately $264.7 million.
According to GSK, the divestment will allow the company to focus on priority brands and markets. Divested brands include Phillips MOM, Solpadeine, Dequadin, Cartia, and Zantac, which generated combines sales of around $96.8 million in 2011. The divestment will be completed in the second quarter of this year, following the necessary regulatory approvals.
The agreement comprises two transactions. The first is Aspen Holdings’ acquisition of products sold in South Africa, Mabbia, Botswana, Swaziland, Lesotho, Zambia and Zimbabwe. The second transaction is Aspen’s acquisition of the products sold in the rest of the world, but excluding Europe and North America, which are the subject of separate transactions between GSK and third parties.
“The products acquired through these transactions are an excellent geographic fit with Aspen’s existing footprint and will allow for significant strengthening of Aspen’s OTC offering in all of the territories concerned,” Stephen Saad, chief executive of Aspen Group, said in a statement. “The products have considerable established brand equity, which Aspen intends to leverage through increased promotion and plans to expand through line extensions.
Aspen is funding the transactions though existing cash resources, existing credit facilities and new debt, with the latter funding approximately 50% of the transaction. The company has already made arrangements for raising the new debt.
In a statement, GSK added that it also plans to divest alli, but the process has been delayed pending the resolution of a temporary third-party supply interruption.