Stada Arzneimittel CEO Hartmut Retzlaff acknowledged last year his company needed to make some deals or risk a takeover in the rapidly consolidating generics business. It has finally pulled one off, and in short order. The company has nailed down a deal to buy the British OTC company Thorton & Ross for €259 million.
Germany's Stada announced only 10 days ago that it was in exclusive talks with the U.K. company. Stada said in a statement today that the deal for about $345 million in cash and assumed debt will be closed by the end of the month. Thorton & Ross will be contributing to Stada's bottom line on Sept. 1.
That is not a huge contribution. Thornton & Ross ranks fifth in the British OTC market with £66.34 million, or about $103 million, in sales for its most recent fiscal year. But Stada said the OTC maker is one of the country's fastest-growing drugmakers in Britain, racking up 11% sales growth for the year. Besides, its margins are better than Stada's own, the company has said. It also gives Stada a better place in the U.K. over-the-counter market, which it can build on by running its own brands through Thornton & Ross's marketing and distribution channels.
The deal also gives Stada a little bit more heft with which to defend itself against potential takeover artists. The German drugmaker has been viewed as a tasty takeover target for some time. India's Sun Pharmaceuticals was rumored to be sizing up the German generic drugmaker at one point last year. And then Claudio Albrecht, the former CEO of Actavis ($ACT) who cashed out by selling his company to Watson Pharmaceuticals, was said to be getting investors together to buy it. That hasn't happened yet, and now if he or someone else comes a-calling, the price will have gone up.
- here's the release