Actavis said on Tuesday that it had reached an agreement to acquire Forest Laboratories for $25 billion in cash and stock.
Acatvis, based in Dublin but operating from Parsippany, N..J., has been an aggressive acquirer of other drug companies. The latest acquisition â€" its largest by far â€" will be its seventh since January 2013, according to Standard & Poor’s Capital IQ. The combined revenues of the two fast-growing specialty pharmaceutical companies are expected to be more than $15 billion in 2015, the companies said.
Under the terms of the deal, Forest shareholders will receive $26.04 in cash and 0.3306 of a share of Acativs or $89.48. That represents a premium of 25 percent from Forest’s closing stock price on Friday. Shares of Forest were up more than 30 percent in premarket trading.
Forest’s best known drugs are Lexapro and Namenda.
“With this strategic combination, we create an innovative new model in specialty pharmaceuticals leadership, with size and scale, a balanced offering of strong brands and generics, a focus on strategic, lower-risk drug development, and â€" most important â€" the ability to drive sustainable organic growth,†Paul Bisaro, the chairman and chief executive of Actavis, said in a statement. “Bolstered by one of the deepest and most diversified product portfolios in the industry with an exceptionally strong pipeline, this transaction creates a powerful engine for generating long-term, double-digit revenue and earnings growth.â€
Mr. Bisaro will lead the combined company.
The deal is a huge win for Carl C. Icahn, who led an unsuccessful proxy fight at Forest in 2011 before later gaining a board seat and has advocated for changes at the drug maker. He owns more than 11 percent of Forest, according to Dec. 31 filings.
“Great result for ALL $FRX (Forest Labs) shareholders,†Mr. Icahn wrote on Twitter. “Proves again that activism works.â€
Greenhill & Company and the law firm Latham & Watkins advised Actavis. JPMorgan Chase is serving as financial advisor to Forest, and Wachtell, Lipton, Rosen & Katz is serving as Forest’s legal adviser.
Actavis has bridge loan commitments from Bank of America Merrill Lynch and Mizuho Bank.
