IRISH PHARMA group Azur, which is led by former Elan executive Séamus Mulligan, has agreed to merge with Nasdaq-listed Jazz Pharmaceuticals in a deal that values the Dublin-based company at $500 million (€365.5 million).
This is an all-share transaction that will give Azur’s shareholders just over 20 per cent of the combined entity. Jazz’s owners will hold the balance.
The deal, which was announced in California on Monday, is subject to regulatory approval and is not expected to close until the first quarter of 2012.
Jazz shareholders will also be asked to approve the deal. Both boards of directors have approved the transaction with 99 per cent of Azur’s shareholders agreeing to vote in favour of the deal.
The combined entity will trade as Jazz Pharmaceuticals plc and will be domiciled in Ireland.
It is expected to have revenues of $475 million and to generate cash of more than $200 million in the first 12 months after closing.
The company will have no debt and about $250 million in cash at closing.
Mr Mulligan, who is the chairman and chief executive of Azur, will join the board of the enlarged company and become its chief business officer, international business development.
Azur executives Eunan Maguire, David Brabazon, Fintan Keegan and Mike Kelly will join the company in senior management roles.
Bruce Cozadd, chairman and chief executive of Jazz, will hold the same roles in the enlarged company.
Azur was founded in mid-2005 by Mr Mulligan, Mr Maguire and Mr Brabazon.
It has raised €75 million from investors, much of this from private clients of stockbroker Davy.
Having paid €2 and €3 per share for their stock in two funding rounds, the Davy clients are now looking at a potential return of three to four times their investment. They own about half of the business.
Jazz’s shares rose by more than 8 per cent in early trading on the Nasdaq yesterday following the announcement.
While based in Dublin, Azur has operations in Philadelphia in the US and employs 172 staff.
Azur focuses on 10 pharma products related to the central nervous system and women’s health. It expects to achieve net sales of $95 million to $100 million in 2011.
About two-thirds of the revenues are based on the central nervous system products, with the balance from women’s health.
Its earnings before interest, tax, depreciation and amortisation are expected to be $27 million to $31 million this year.
It had about $83 million in cash and only $5 million in debt as of June 30th this year.
Mr Cozadd described the deal as a “compelling strategic fit” and said the business would have a “diverse portfolio of products and an international platform, paving the way for long-term growth that builds on our current strengths”.
Mr Mulligan said the combined company would have “greater operational and financial resources” to allow it to acquire and develop other products.
In a conference call yesterday, Mr Mulligan said Azur decided to seek a partner for the business in late spring of this year.
“While we have been very successful to date, we felt a partner would accelerate our development,” he said.
“The cultural and business similarities between Jazz and Azur make this an extremely good fit.”
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