Sun Pharma and DUSA Pharmaceuticals have entered into a definitive agreement under which Sun Pharma will acquire DUSA, a dermatology company focused on developing and marketing its Levulan photodynamic therapy platform, Sun Pharma said in a statement.
Under the terms of the agreement, a 100 per cent subsidiary of Sun Pharma Ltd will commence a tender offer for all of the outstanding common stock of DUSA at a price of USD 8 per share in cash, a 38 Per cent premium to the closing price of Dusa's common stock on November 7, 2012, it added.
"The transaction has a total cash value of approximately USD 230 million," it said.
The transaction has been unanimously approved by the boards of directors of both companies and DUSA's board has recommended that the company's shareholders tender their shares pursuant to the tender offer, it added.
"DUSA has proven technical capabilities in photodynamic skin treatments, with USFDA approved manufacturing. DUSA's business brings us an entry into dermatological treatment devices, where we see good growth opportunities," Sun Pharma Managing Director Dilip Shanghvi said.
Commenting on the deal, DUSA Pharmaceuticals Inc President and CEO Robert Doman said the company is confident that Sun Pharma will build upon the solid foundation DUSA has established in the United States dermatology market.
DUSA's Levulan combination therapy is approved by Food and Drug Administration for treatment of non-hyperkeratotic actinic keratoses of the face or scalp.
Leerink Swann LLC acted as exclusive financial advisor and Reed Smith LLP acted as legal advisor to DUSA Pharmaceuticals, the company said.
Shares of Sun Pharma today closed at Rs 696.15 apiece on the BSE, down 0.76 per cent from its previous close.
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India's Sun Pharma to buy U.S.-based Dusa for $230 mln
India's Sun Pharmaceutical Industries Ltd will pay about $230 million for U.S.-based Dusa Pharmaceuticals Inc to gain access to the skin treatment market in the United States and complement the dermatology business of its Taro Pharmaceutical Industries Ltd subsidiary.
Sun Pharma, India's top drugmaker by market value, draws nearly half of its sales from the United States but sales from Taro, its Israeli unit, have been driving profits in the world's biggest drug market.
Dusa's business brings us an entry into dermatological treatment devices, where we see good growth opportunities, Sun Pharma Managing Director Dilip Shanghvi said in a statement on Thursday.
Dusa's Levulan combination therapy is approved by the U.S. Food and Drug Administration for treating non-hyperkeratotic actinic keratoses of the face or scalp.
BLU-U, another Dusa technology, is used to treat moderate inflammatory acne vulgaris.
This acquisition will actually complement Taro's existing business, which has a strong dermatology product range, said Siddhant Khandekar, an analyst at ICICI Direct in Mumbai.
This was the only area, a growing one, where Sun did not have products in the United States.
Sun, which has a market value of $13.3 billion, will make a tender offer $8 per share in cash for Dusa, a premium of 38 percent to Dusa's closing price on Wednesday.
Sun Pharma's shares have risen 40 percent this year, compared with a 20 percent rise in the Mumbai market index .
While big multinationals such as Abbott Laboratories and Sanofi SA have been buying out Indian drug companies at high valuations, Sun Pharma remains one of only a few Indian drugmakers that has successfully acquired overseas companies and made profits.
Sun Pharma shares closed down 0.54 percent at 696.55 rupees. The company also announced that its net profit fell 46.5 percent in the second quarter.
The acquistion would lead to tremendous synergies. The product portfolio of DUSA is growing @25%, which is much faster than the dermat market in the US. Sun would further accelerate the revenue growth by leveraging the field force of their subsidiary Taro, which is a major player in dermatology in the US. This article is extremely informative http://pharmadeals.pharmaintellect.com/2012/11/sun-acquires-dusa-transaction-valuation.html