Mallinckrodt plcMNK announced that it has entered into a definitive agreement to sell its Nuclear Imaging business to IBA Molecular for $690 million.
Of the total value of the deal, approximately $574 million comprises up-front payment, $39 million covers long-term obligations and approximately $77 million consists of contingent consideration.
The Nuclear Imaging business includes a portfolio of diagnostic imaging products. Although these products are approved for use in nuclear medicine procedures in many countries, as much as two-thirds of the current annual revenues from this business are generated in the U.S. It presently employs 800 people.
The transaction is expected to close in the first half of 2017.
Note that the Nuclear Imaging business had been facing challenges for quite some time now. Hence, a divestiture was around the corner. Management is focused on reshaping the company through strategic acquisitions and non-core asset divestitures.
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Keeping with this, Mallinckrodt sold its contrast media and delivery systems (CMDS) business in Nov 2015. The company has been extremely active on the acquisition front as well. Earlier this year, Mallinckrodt acquired hemostasis drugs - Recothrom Thrombin topical (recombinant), PreveLeak and Raplixa (fibrin sealant) - from The Medicines Co. MDCO in a transaction that strengthened its growing hospital portfolio. In 2015, it acquired privately held critical care company, Ikaria, in a transaction that added Inomax, a vasodilator used in conjunction with ventilatory support and other appropriate agents, to its portfolio. Meanwhile, last September, the company acquired Therakos Inc. in an attempt to broaden its footprint in hospitals.
Mallinckrodt currently carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the health care sector include Pacira Pharmaceuticals, Inc. PCRX and Corcept Therapeutics Incorporated CORT . Both the stocks sport a Zacks Rank #1 (Strong Buy).
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