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Impax Laboratories signs merger deal with Amneal


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Essential IR Insights Newsletter - February 2023

Impax Laboratories signs merger deal with Amneal

As expected, Impax Laboratories Inc. and Amneal Pharmaceuticals LLC agreed to merge via an all-stock transaction.

The combined company, to be called Amneal Pharmaceuticals Inc., will be the fifth largest generics business in the U.S. by gross revenue, with a generics portfolio of about 165 differentiated product families.

Amneal Holdings members will own about 75% of the new company's shares, and Impax shareholders will own about 25%.

In connection with the deal, Amneal Holdings will raise $855 million in gross proceeds through a private placement of 46.8 million unregistered shares, priced at $18.25 apiece, with institutional investors including TPG and funds affiliated with Fidelity Management & Research Co.

The merged entity will be headquartered in Bridgewater, N.J., with Impax President and CEO Paul Bisaro as CEO. Impax Senior Vice President of Finance and CFO Bryan Reasons will become the CFO of the new entity.

Amneal founders and co-CEOs Chirag Patel and Chintu Patel will become co-chairmen of the board. The board will be composed of 11 members, six of whom will be appointed by Amneal, with five appointed by Impax. Impax Chairman Bob Burr will serve as lead independent director.

The deal is expected to be accretive to Impax's stand-alone adjusted per share earnings in the first 12 months and generate double-digit growth in revenue and adjusted EPS over the three years after the transaction closes. Impax expects to achieve annual cost synergies of about $200 million within three years.

The combined company has secured financing from JPMorgan Chase Bank NA and Bank of America Merrill Lynch to refinance both companies' outstanding debt obligations.

The merger is approved by the board of both companies and is expected to close during the first half of 2018, subject to customary closing conditions.

J.P. Morgan Securities LLC is serving as financial adviser to Amneal in connection with the combination and as placement agent to Amneal in connection with the private placement. Latham & Watkins LLP is serving as legal counsel to Amneal.

Morgan Stanley is serving as financial adviser to Impax, and Sullivan & Cromwell LLP is serving as legal counsel. In addition, Impax received advice from BofA Merrill Lynch.