Aurobindo has been looking to expand further in Europe, particularly in the sterile injectables business. With a €30 million ($41 million) deal to buy 7 Actavis ($ACT) active pharmaceutical ingredient (API) facilities across Western Europe, the Indian company will be able to do that in one fell swoop.
Aurobindo says it is buying from Actavis API "infrastructure" in France, Italy, Spain, Portugal, Belgium, Germany and the Netherlands, including products, marketing authorizations and dossier license rights. They have also struck a long-term agreement for Aurobindo to provide Actavis with APIs. They didn't say how many people Aurobindo will pick up in the deal.
While the European operations have been losing money for Actavis, Aurobindo executives feel confident they can turn it around. They said the 7 facilities did about €320 million ($433 million) in 2013, an increase of 10% from 2012. Among other benefits, Aurobindo said the deal will give it "a readymade hospital sales infrastructure for Aurobindo to launch its own injectable and specialty portfolio across Western Europe." Aurobindo likes the sterile injectables business, and in an effort to realize all of its potential, the company last year spun its sterile operations into a separate subsidiary and has been on the hunt for acquisitions to beef it up.
Actavis, on the other hand, has been looking to unload some of the 28 plants it picked up in its merger with Watson Pharmaceuticals. Closing excess capacity is key to CEO Paul Bisaro's plan to cut about $300 million in costs to help pay for the deal. In November, Actavis said it intended to begin closing a manufacturing facility in Lincoln County, NC. The final closing is slated for mid-year 2015 and 310 will be let go by then.
- here's what Aurobindo said
- read the Actavis announcement