Japanese generics giant to take out Sagent for $736M

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The largest generics player in Japan, Nichi-Iko Pharmaceutical, will snap up Sagent Pharmaceuticals for about $736 million, a 40% premium to its last closing share price. The deal is expected to give Nichi-Iko more access to the U.S. market for its biosimilar pipeline and injectables as the company aims to become a major global generics player.

The Japanese company, which is the largest generic drug manufacturer in Japan by sales, has done 6 acquisitions and 9 partnerships since 2000 under the current leadership. It markets more than 1,000 products with ¥143.5 billion ($11.2 billion) in net sales for its fiscal 2014.

“The U.S. market is a top priority for Nichi-Iko and we believe Sagent is an ideal partner to accelerate our international growth strategy,” said Nichi-Iko President and CEO Yuichi Tamura in a statement. “The combination will give us the opportunity to strengthen our international competitiveness, leverage our production capacity over a wider range of products, and accelerate development of our biosimilars business.”

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Sagent has a portfolio of 55 products, mostly in oncology, anti-infective and critical care. Almost one-third of them are first or second in terms of market share. It had been reported to be seeking strategic options early this year.

Founded in 2006, Sagent raised $92 million in a 2011 IPO. The $21.75-per-share takeover price is somewhat below its 52-week high of more than $26 but well above the 52-week low of about $10. Vivo Capital was a major venture backer and still holds about 20% of its shares. The firm has already agreed to the deal.

The Japanese pharma said it won’t make changes to ongoing operations at Sagent and that the current management will continue to lead it from its Schaumburg, IL, headquarters.

“The combination will maintain Sagent’s current operations and valued employees while providing accelerated expansion of our product offerings and accessibility to a robust pipeline of biosimilar pharmaceuticals,” said Sagent CEO Allan Oberman. “Nichi-Iko is the ideal partner to help us push forward into our next stage of growth and solidify our position as a leading provider of affordable pharmaceuticals to the hospital and clinic market.”

The deal has been approved by the boards of both companies and is slated to close during the second quarter of Nichi-Iko’s fiscal year that ends in March.

- here is the announcement

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