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FTC Clears US Generic Drug Specialists Amneal and Impax to Close Merger
Monday 30 April 2018

30 April 2018 - The US Federal Trade Commission has cleared US-based drugmakers Amneal Pharmaceuticals LLC and Impax Laboratories, Inc. (NASDAQ: IPXL) to close their planned business combination in an all-stock transaction, the companies said.

The parties have now obtained all regulatory approvals required to close the transaction. Accordingly, the parties expect to consummate the business combination following the close of trading on 4 May 2018.

As a result of the transaction, Amneal Holdings members will own approximately 75% and Impax shareholders will own approximately 25% of the new company's pro forma shares on an as converted basis.

The combined company, to be named Amneal Pharmaceuticals, will have a generics business that will rank as the 5th largest in the United States by gross revenue and a growing, high-margin specialty franchise.

The combined company is expected to have 2018 pro forma adjusted EBITDA of approximately USD 700m to USD 750m, which includes expected significant cost savings within the first full year of close.

Amneal's Founders and co-chief executive officers, Chirag Patel and Chintu Patel, will serve as co-chairmen of the combined company's board of directors. 

Paul Bisaro, president and chief executive officer of Impax, will serve as chief executive officer of the combined company, and Bryan Reasons, senior vice president, Finance and chief financial officer of Impax, will serve as chief financial officer.

This leadership team will be supported by the combined company's nearly 6,500 employees operating from strategically positioned locations around the globe.

Under the terms of the agreement, a new, publicly traded holding company, Amneal Pharmaceuticals, Inc., will be formed.

As a result of the transaction, Amneal Holdings members immediately prior to the closing of the transaction will receive non-economic, voting shares of Amneal Pharmaceuticals, Inc. and will be able to exchange, at or following closing, their membership units in Amneal Pharmaceuticals LLC for class A common shares of Amneal Pharmaceuticals, Inc.

As a result, Amneal members immediately prior to the closing of the transaction will own approximately 75% of the voting power of Amneal Pharmaceuticals, Inc. and Impax's shareholders immediately prior to the closing of the transaction will own approximately 25% of the voting power of Amneal Pharmaceuticals, Inc.

The transaction will be structured as an "Up-C" transaction with a tax receivable agreement split 85% / 15% between Amneal Holdings members and Amneal Pharmaceuticals, Inc., respectively.

In connection with the transaction, the combined company has secured fully committed financing from JPMorgan Chase Bank, N.A. and Bank of America Merrill Lynch to refinance both companies' currently outstanding debt obligations.

In connection with the transaction, Amneal Holdings members have entered into definitive purchase agreements with select institutional investors including TPG and funds affiliated with Fidelity Management and Research company to sell 46.8m unregistered common shares at USD 18.25 per share in a private placement for gross proceeds of USD 855m, or approximately 15% of fully diluted common shares outstanding on an as converted basis.

The new combined company will be headquartered in Bridgewater, New Jersey. The transaction agreement has been unanimously approved by the boards of directors of Amneal and Impax, and is supported by the management teams of both companies.

This deal is expected to close in the first half of 2018, subject to the satisfaction of customary closing conditions, including receipt of regulatory approvals and Impax shareholder approval.

Amneal Pharmaceuticals received the requisite approval from its members for the transaction.

Amneal Pharmaceuticals, a privately-held company headquartered in Bridgewater, New Jersey, is one of the largest and fastest growing generic pharmaceutical manufacturers in the United States.

Impax Laboratories, Inc. (Impax) is a specialty pharmaceutical company applying its formulation expertise and drug delivery technology to the development of controlled-release and specialty generics in addition to the development of central nervous system disorder branded products.

J.P. Morgan Securities LLC is serving as financial advisor to Amneal in connection with the combination and as placement agent to Amneal in connection with the private placement.

Latham and Watkins LLP is serving as legal counsel to Amneal. Morgan Stanley is serving as financial advisor to Impax, and Sullivan and Cromwell LLP is serving as legal counsel. In addition, Impax received advice from BofA Merrill Lynch.
Details
Date Published: 30/04/2018
Target: Impax Laboratories
Country: USA
Deal Size: 6bn (USD)
Sector: Pharmaceuticals
Type: Merger
Financing: Stock
Status: Agreed
Vendor:
Buyer: Amneal Pharmaceuticals
Buyer Advisor: J.P. Morgan Securities , Latham and Watkins
Comment:


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