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AIF Capital-backed Famy Care selling part of business to Mylan for up to $800M

02 February, 2015

US-based generic drugmaker Mylan Inc has struck a deal to buy a part of female health care businesses from Mumbai-based privately held firm Famy Care Ltd for up to $800 million (around Rs 4,950 crore), it said on Monday. This is the fourth-biggest in-bound M&A in the pharma sector ever in the country and comes just over a year after Mylan executed an even larger deal to buy Agila from Strides Arcolab for $1.65 billion.

Famy Care is a specialty women’s health care company with global leadership in generic oral contraceptive products (OCPs).

Under the proposed transaction structure, it will spin off its women’s health care business into a separate firm and Mylan will acquire the shares of the new resulting company.

Mylan has signed a definitive agreement to acquire the business for $750 million in cash plus contingent payments of up to $50 million, as per a press release. The deal, which is expected close in the second half of 2015, is subject to regulatory approvals and certain closing conditions.

This is expected to be immediately accretive to Mylan’s adjusted diluted earnings per share and growth profile upon closing.

This transaction complements Mylan’s pending acquisition of Abbott’s developed markets specialty and branded generics business outside of US, which also includes a women’s health care portfolio and sales and marketing capabilities.

“With today’s acquisition, we are building on this successful partnership and further accelerating our global growth in this important therapeutic area. We see many opportunities to tap the large women’s health care market in Europe, particularly through our pending Abbott deal. We are excited to welcome Famy Care’s more than 900 employees to the Mylan family and look forward to their contributions to our mission of providing the world’s 7 billion people access to high quality medicine,” said Heather Bresch, Mylan CEO.

The acquisition will build on Mylan’s existing partnerships with Famy Care in North America, Europe and Australia, and provide Mylan with an enhanced and now vertically integrated platform that will accelerate the company’s growth in the global women’s healthcare space.

Additionally, the acquisition of the Famy Care businesses will make Mylan a hormonal contraceptives leader in high-growth emerging markets around the world.

Mylan and Famy Care are partners since 2008, under which Famy Care develops and supplies OCPs to Mylan for distribution to customers in the US and certain other markets. In the US, Famy Care and Mylan have a portfolio of 12 approved products, with abbreviated new drug applications pending FDA approval for 30 products.

The global women’s healthcare market is growing at a compound annual rate of approximately 6 per cent with hormonal contraceptives representing the largest and fastest growing products in the segment, according to Mylan citing third party reports.

“Famy Care brings us a broad portfolio, strong technical capabilities and dedicated hormone manufacturing, which complement Mylan’s powerful global commercial footprint and supply chain infrastructure. In addition to the opportunities we see in North America and Europe, Famy Care’s businesses will strengthen our position in emerging markets,” said Rajiv Malik, president at Mylan.

Mumbai-headquartered Famy Care offers a comprehensive range of women’s health products including oral and injectable contraceptives, intra-uterine devices (IUDs), tubal rings and hormone-replacement therapy products. It markets its products in over 90 countries around the world.

The firm claims that more than 15 per cent of the women globally using oral contraceptive pills use a Famy Care product and that it is the world’s largest producer of generic OCPs, with four manufacturing facilities in India, two of which have been approved by the US Food and Drug Administration (FDA) and the European Union.

Famy Care is the first generics company to have received prequalification from the World Health Organization for hormonal contraceptives.

This manufacturing base represents one of the lowest cost and largest dedicated to OCPs globally, and brings Mylan strong capabilities in OCP cycles, injectables, IUDs and tubal rings. Famy Care has a strong presence in the private, institutional and non-governmental organisation sectors and markets its products in more than 90 countries around the world.

It also has strong research and development capabilities in the women’s healthcare segment, including in the development of hormonal and high-potency formulations. The company’s R&D and regulatory affairs team, comprising more than 100 professionals, has a track record of bringing products to market, with approximately 600 product registrations in approximately 90 countries and a pipeline of more than 200 filings, including more than 100 filings for the developed markets.

“We foresee significant opportunities in the women’s health care business across developed and emerging markets, and the proposed transaction provides an opportunity for our team to capture the opportunity in an even more effective manner,” J P Taparia, non-executive chairman of Famy Care, said.

He added that the firm started the process of transitioning from a family-owned business into a meaningful institutional player in the global pharmaceutical industry in 2010 by enlarging shareholder base with the investment by pan-Asian private equity firm, AIF Capital.

AIF Capital had put in around $40 million to buy a stake in the firm.

Taparia said the PE firm’s involvement helped the firm in achieving critical corporate milestones over the last four years.

“Shareholders of Famy Care will evaluate and pursue other opportunities in the residual Famy Care business outside of women’s health care segment,” Taparia added.

Previous media reports had speculated that the PE firm is looking to exit its investment and it may join the promoters to sell majority stake in the firm. The reports had named Mylan as one of the suitors.

Centerview Partners and Goldman Sachs & Co. are serving as financial advisors to Mylan and Cravath, Swaine & Moore LLP and Luthra & Luthra are acting as legal advisors. Credit Suisse is serving as financial advisor to Famy Care and Covington & Burling, Crawford Bayely and AZB & Partners are acting as its legal advisors.

For Mylan, this is the third big M&A deal in India. In the past it has acquired Matrix Labs and topped it up with the acquisition of Agila, which is the third biggest deal ever behind Daiichi Sankyo-Ranbaxy and Abbott-Piramal deals.

(Edited by Joby Puthuparampil Johnson)


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AIF Capital-backed Famy Care selling part of business to Mylan for up to $800M

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