Tokyo-based Nichi-Iko Pharmaceutical will buy Sagent Pharmaceuticals ($SGNT) in a $736 million all-cash deal with management and boards from both sides agreeing to terms aimed at creating a global generics powerhouse.
Nichi-Iko will pay $21.75 for each share of Schaumburg, Illinois-based Sagent, a premium a tad over 40% to the share close price on Friday, July 8 of $15.50, Sagent said in a release on Monday. The transaction is slated to close in the second quarter of the Japanese company's financial year, which started April 1.
The purchase vaults Nichi-Iko out of its sole reliance on the Japanese market, potentially aiding sales in the key U.S. market and wider.
"The transaction enhances Nichi-Iko's platform in the U.S. market to commercialize its biosimilar product pipeline and increase its presence in injectables," according to the press release.
"Through the acquisition, Nichi-Iko will raise its profile in the domestic and international generics market and advance the company's goal of becoming a top 10 global leader in generics."
Nichi-Iko's CEO noted the reach into the U.S. would not include any immediate changes in management and that the transaction was akin to a partnership.
“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," Yuchi Tamura, CEO for Nichi-Iko said in a statement.