Actavis’s deal to acquire the drug maker Forest Laboratories means significant fees for JPMorgan Chase, the bank’s second apparent windfall in less than a week from advising on a big-ticket deal.
Actavis, a rapidly expanding specialty pharmaceutical company, announced the $25 billion acquisition on Tuesday, capping off a buying spree with its largest purchase yet.
JPMorgan stands to earn $55 million to $65 million in fees as Forest’s adviser in the deal, according to estimates from Freeman & Company. Those estimates do not include fees for arranging financing, which was provided by Bank of America Merrill Lynch and Mizuho Bank. Typically, the firms that help fund the deal could earn 2 percent to 2.5 percent of the total loan amount. Wachtell, Lipton, Rosen & Katz is Forest’s legal adviser. Law firms typically bill by the hour.
JPMorgan also stands to earn hefty fees for its work on Comcast’s acquisition of Time Warner Cable, which was announced last week. Comcast’s deal to buy its smaller rival for $45.2 billion is the third-largest acquisition since the financial crisis hit. Comcast’s group of advisers, which included JPMorgan, stand to earn as much as $68 million from that transaction.
Actavis used its longtime adviser Greenhill & Company as well as the law firm Latham & Watkins. Greenhill & Company stands to earn $50 million to $59 million, according to Freeman. Forest will be Actavis’s seventh acquisition since 2013, according to Standard & Poor’s Capital IQ.
Notably absent from Tuesday’s deal was Morgan Stanley, which advised on Forest’s deal to buy the privately held drug maker Aptalis for $2.9 billion in January.
JPMorgan, Morgan Stanley and Bank of America are among the top M.&A. advisers for 2014, according to data from Thomson Reuters. Goldman Sachs, which has topped the competition in previous years, has missed out on the latest 11-figure deals.
