Pfizer Inc. (NYSE:PFE) is selling off its Capsugel unit to private equity firm Kohlberg Kravis Roberts & Co. L.P. (NYSE:KKR) in a $2.38 billion cash deal, the companies said today.
Peapack, N.J.-based Capsugel manufactures hard capsules and drug delivery systems for the pharmaceutical and nutrition industries and generated about $750 million in revenue last year, according to Pfizer. Its divestiture comes on the heals of the company’s $3.6 billion takeover of painkiller maker King Pharmaceuticals Inc. in November.
The world’s largest drug maker expects to fund stock repurchases with the proceeds from the divestiture in 2011 and also said it plans to “identify and invest in other opportunities to maximize its value, including business development.”
Pfizer had already announced plans to buy back $5 billion in shares this year. The company updated its 2011 revenue guidance range from $66.0 billion to $68.0 billion to $65.2 billion to $67.2 billion and pulled back its 2012 revenue targets from $63.0 billion $65.5 billion to $62.2 billion to $64.7 billion.
PFE shares were up about 0.6 percent in mid-day trading and are currently going for about $20.49 apiece.
News of the divestiture overshadowed a “Refusal to File” letter from the FDA for Pfizer’s new drug application for tafamidis, its experimental treatment for Transthyretin Familial Amyloid Polyneuropathy, an incurable neuro-degenerative disease. The FDA found that the application was not sufficiently complete to permit a substantive review, according to the company.
New York-based KKR’s investments in the health-care industry include publicly traded hospital chain HCA Holdings Inc. and orthopedic medical device manufacturer Biomet Inc.
Here’s a roundup of companies announcing mergers, acquisitions and divestitures.
- Bruker completes of Michrom buyout
Bruker Corp. (NSDQ:BRKR) announced the closing of its acquisition of Michrom Bioresources Inc., a 20 year old, privately owned company located in Auburn, Calif., after receiving unanimous Michrom shareholder approval. The acquisition is not expected to have a material effect on Bruker’s 2011 financials. All former Michrom employees have been offered employment by Bruker, and Michrom’s founder, Kerry Nugent, joined Bruker as senior vice president.
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- DJO looks to raise $300 million to fund Dr. Comfort takeover
DJO Global Inc. plans to offer, in a private offering subject to market and other conditions, $300 million aggregate principal amount of senior unsecured notes due 2018. Obligations under the notes will be guaranteed by all existing and future domestic subsidiaries that guarantee DJO Finance LLC’s (DJOFL) existing senior secured credit facilities, senior unsecured notes due 2014 and senior subordinated notes due 2017. DJOFL intends to use the net proceeds from the offering to fund the estimated $254.6 million purchase price for the acquisition of Rikco International, LLC, D/B/A Dr. Comfort , a provider of therapeutic footwear, pay estimated fees and expenses associated with the acquisition and the related financing and repay an estimated $25.4 million of borrowings currently outstanding on DJOFL’s senior secured revolving credit facility.
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- OncoSec closes Inovio tumor therapy deal
OncoSec Medical Inc. (OTC:ONCS) announced that on March 24 it completed its acquisition of certain assets of Inovio Pharmaceuticals, Inc. (NYSE Amex:INO) and entered into a license agreement with Inovio, pursuant to the terms of an asset purchase agreement with Inovio entered into on March 14.
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- Techne buys Boston Biochem
Techne Corp. (NSDQ:TECH) announced that as of April 1, its R&D Systems subsidiary has acquired the assets of Boston Biochem Inc., a developer and manufacturer of innovative ubiquitin-related research products.
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- BAE closes Fairchild Imaging takeover
BAE Systems Inc. completed the acquisition of the outstanding equity of privately owned Fairchild Imaging Inc. The proposed acquisition was announced January 21. Fairchild makes solid-state electronic imaging components, cameras, and systems for aerospace, industrial, medical, and scientific imaging applications.
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- Quest completes Athena acquisition
Quest Diagnostics Inc. (NYSE:DGX) closed its $740 million cash purchase of Athena Diagnostics Inc. from Thermo Fisher Scientific Inc. (NYSE:TMO). The Federal Trade Commission granted Quest an early termination of the premerger review for the deal last week.
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