Tags: Drug | Deal | Salix | Santarus

Drug Deal: Salix Pharma to Buy Santarus for $2.6 Billion

Thursday, 07 Nov 2013 07:28 PM

Salix Pharmaceuticals Ltd. will buy Santarus Inc. for about $2.6 billion to boost its portfolio of drugs with a complementary set of products from the specialty pharmaceutical company.

The $32 per share offer is a 37 percent premium to Santarus' Thursday close on the Nasdaq.

Santarus shares rose to $31.90 in extended trade, while shares of Salix were up 10 percent to trade at $77.99.

Both Salix and Santarus have a number of products on the market and in clinical development, but none of their target markets overlap, Salix Chief Executive Carolyn Logan said on a conference call with analysts.

The combined company will have a portfolio of 22 marketed products.

Santarus also reported third-quarter results that were well above analysts' estimates, helped mainly by robust sales of its diabetes drug Glumetza and heartburn drug Zegerid.

Salix, which sells the traveler's diarrhea drug Xifaxan and constipation drug Relistor, reported weak third-quarter results, but forecast better-than-expected earnings for 2013.

The company is also expecting to post solid earnings in 2014 as it looks to gain from the Santarus deal.

Salix said it expects the deal — approved by the boards of both the companies — to close in the first quarter of 2014 and to significantly contribute to earnings in the same year.

Salix expects adjusted earnings of $5 per share in 2014, up from $3.20 per share it forecast for the current year.

Analysts expect Salix to report a full-year 2013 profit of $3.24 per share, according to Thomson Reuters I/B/E/S.

Salix plans to pay for the acquisition with about $800 million in cash on hand and $1.95 billion in financing from Jefferies Finance LLC.

Jefferies LLC is advising Salix on the deal, with Covington & Burling LLP as legal counsel. Santarus is being advised by Stifel, Nicolaus & Co and Latham & Watkins LLP is its legal adviser.

© 2017 Thomson/Reuters. All rights reserved.

 
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Salix Pharmaceuticals Ltd. will buy Santarus Inc. for about $2.6 billion to boost its portfolio of drugs with a complementary set of products from the specialty pharmaceutical company.
Drug,Deal,Salix,Santarus
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2013-28-07
Thursday, 07 Nov 2013 07:28 PM
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