Allergan to look for tuck-in buys in the USD 1bn to USD 2bn range, CEO says
Allergan [NYSE:AGN] continues to look for acquisitions in the USD 1bn to USD 2bn range even as it works to reduce leverage from previous deals, said CEO Brent Saunders.
Dublin-based Allergan, best known as the maker of the aesthetic treatment Botox, wants to add assets in its four focus areas of medical aesthetics, central nervous system treatments, gastrointestinal products and eye care products, Saunders said in an interview after a presentation at the JPMorgan Healthcare Conference this week in San Francisco.
“We’re looking for stepping stones, tuck-ins, what have you,” said Saunders, in all of its four focus areas. “Acquisitions in the USD 1bn to USD 2bn range are doable if we found the right opportunities.”
Allergan, once a darling of the investment community, has seen its shares fall 26% in the last three months following disappointing acquisitions, a strategic review that some investors called half-hearted and generic competition for its second-best selling drug, dry-eye treatment Restasis.
The company has said it is aiming to reduce net leverage to 2.5x EBITDA by the end of 2020. The company ended September at 3x adjusted EBITDA to pro-forma debt. It reported USD 23.6bn in total debt for the period.
Investor concerns ignited in April when Allergan it said it was considering a counterbid for Shire against Takeda Pharmaceuticals[TYO:4502] and shares fell by 7% amid unease about the company’s debt-load. The company quickly shelved the Shire plans once they became public.
Two months later, the company announced that it would look to sell its women’s health and anti-infective businesses following a strategic review. Hedge fund shareholders Appaloosa and Senator Investment Group called the result of that review underwhelming and said that Allergan should split its chairman and CEO role.
Saunders told investors in December that the sale of the health and anti-infective businesses are nearing an end, noting that the company remains open to selling the assets, but it has to be at a price that recognizes their value.
Allergan was recently trading at USD 144 per share with a market cap of USD 47bn.
Dublin-based Allergan, best known as the maker of the aesthetic treatment Botox, wants to add assets in its four focus areas of medical aesthetics, central nervous system treatments, gastrointestinal products and eye care products, Saunders said in an interview after a presentation at the JPMorgan Healthcare Conference this week in San Francisco.
“We’re looking for stepping stones, tuck-ins, what have you,” said Saunders, in all of its four focus areas. “Acquisitions in the USD 1bn to USD 2bn range are doable if we found the right opportunities.”
Allergan, once a darling of the investment community, has seen its shares fall 26% in the last three months following disappointing acquisitions, a strategic review that some investors called half-hearted and generic competition for its second-best selling drug, dry-eye treatment Restasis.
The company has said it is aiming to reduce net leverage to 2.5x EBITDA by the end of 2020. The company ended September at 3x adjusted EBITDA to pro-forma debt. It reported USD 23.6bn in total debt for the period.
Investor concerns ignited in April when Allergan it said it was considering a counterbid for Shire against Takeda Pharmaceuticals[TYO:4502] and shares fell by 7% amid unease about the company’s debt-load. The company quickly shelved the Shire plans once they became public.
Two months later, the company announced that it would look to sell its women’s health and anti-infective businesses following a strategic review. Hedge fund shareholders Appaloosa and Senator Investment Group called the result of that review underwhelming and said that Allergan should split its chairman and CEO role.
Saunders told investors in December that the sale of the health and anti-infective businesses are nearing an end, noting that the company remains open to selling the assets, but it has to be at a price that recognizes their value.
Allergan was recently trading at USD 144 per share with a market cap of USD 47bn.