Jazz Pharmaceuticals plc
) recently announced the completion of the EUSA Pharma acquisition,
which was initially announced in April 2012. EUSA Pharma, a
privately-held specialty pharmaceutical company, has operations in
the US and EU along with a global distribution network.
The acquisition was clinched at a total consideration of $680
million in cash, including $30 million of adjustments for EUSA
Pharma's working capital, cash and certain liabilities. Jazz Pharma
may end up paying an additional $50 million if Erwinaze net sales
exceed a specified target in the US in 2013.
With this acquisition, Jazz Pharma has gained a portfolio of
oncology and critical care products outside the US including
Erwinaze. Jazz Pharma will harvest EUSA Pharma's international
sales and marketing capabilities.
As per the agreement, EUSA Pharma will retain its current name
outside the US. EUSA Pharma will market a portfolio of products
outside the country along with managing the pan-European presence
and distribution network in many other additional territories. The
company's portfolio consists of six specialist hospital products
including Erwinaze sold across 79 countries.
Jazz Pharma had arranged for funds for the acquisition from its
current cash balance and a six-year $475 million term loan with an
initial interest rate based on a LIBOR rate, subject to a floor of
1.0 %, plus 4.25 % per annum.
Jazz Pharmaceuticals mentioned that it will be updating its
financial guidance. On the first quarter earnings call, the company
had projected total revenues in the range of $500-$510 million and
adjusted earnings in the range of $4.25-$4.40 for 2012. The company
expects the EUSA Pharma acquisition to be accretive in 2012. It is
expected to boost 2012 revenues by $90-$100 million and adjusted
earnings by 25 - 30 cents.
Currently, we have an Outperform recommendation on Jazz
Pharmaceuticals, which carries a Zacks #1 Rank (short-term Buy
JAZZ PHARMACEUT (JAZZ): Free Stock Analysis
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