Hikma to acquire Baxter's US generic injectables business

Hikma Pharmaceuticals PLC (LSE: HIK) (NASDAQ DUBAI: HIK) ("Hikma"), the fast growing multinational pharmaceutical group, announces that it has signed an agreement to acquire Baxter Healthcare Corporation's US generic injectables business ("Multi-Source Injectables" or the "Business") for a cash consideration of $112 million.

The acquisition of Multi-Source Injectables: - Brings close to $180 million in annual revenue, significantly enhancing the scale and scope of Hikma's global Injectables platform - Adds a high-quality, complementary injectables portfolio including excellent critical care products and DEA controlled substances - Positions Hikma as the second largest injectables supplier in the US with a combined market share of more than 15% - Brings well qualified and experienced operational and sales teams with excellent technical skills and customer relationships - Increases Hikma's high quality injectables manufacturing capacity and distribution capabilities

The Multi-Source Injectables business comprises a comprehensive and complementary portfolio of 41 products in over 150 dosage strengths and forms across 23 therapeutic areas. The Business' product portfolio also includes several DEA controlled substances that complement Hikma's growing oncology product range and a portfolio of ANDAs that may be reactivated for future sales opportunities.

As the second largest supplier of injectable products by volume in the US, the Multi-Source Injectables business has excellent relationships with the leading group purchasing organisations (GPOs). The Business' high calibre and experienced injectables sales force of more than 20 sales professionals is highly complementary to Hikma's existing injectables sales capabilities and will significantly increase the revenue potential of Hikma's existing and future products.

Hikma will review opportunities to introduce the Business' product portfolio in Europe and across the MENA region, leveraging its strong sales force and reputation in these markets.

The Multi-Source Injectables business includes a 372,000 sq. ft. high-quality manufacturing facility in Cherry Hill, New Jersey. The Cherry Hill facility is equipped with state-of-the-art technology for high speed, high volume filling and for the manufacturing of DEA controlled substances. The facility has an experienced and well-trained employee base, a strong quality track record, and a history of securing FDA approvals. The Business also includes Baxter's 100,000 sq. ft. warehouse and distribution centre in Memphis (Southpoint), Tennessee that has been specifically designed to handle pharmaceutical products and DEA controlled substances. Hikma expects to realise substantial benefits from integrating these facilities into its global manufacturing and distribution platform, which is focused around centres of excellence.

The Multi-Source Injectables business generated revenue of $169.7 million and adjusted EBITDA of $14.5 million in 2009. The Business is on track to deliver revenue of close to $180 million and improved adjusted EBITDA in 2010. Further improvement in profitability is expected going forward, through planned operating efficiencies and certain new product launches. The transaction is expected to be earnings accretive in the first full year excluding one-time transaction-related items.

The book value of the gross assets subject to the transaction, prior to the performance of the fair value exercise and excluding acquired intangible assets, was $177.1 million as of December 31, 2009. The acquisition will be funded by a combination of existing cash resources and new committed debt facilities. The Business will be integrated into West-Ward Pharmaceuticals, Hikma's existing US operations in Eatontown, NJ.

Said Darwazah, CEO of Hikma, commented: "The acquisition of Baxter's Multi-Source Injectables business is transformational. The acquisition doubles the size of our global Injectables business and doubles our sales in the US market, while further diversifying our global revenue base. Importantly, we still retain sufficient financial flexibility to acquire additional assets across our core businesses and geographies."

Michael Raya, CEO of West-Ward Pharmaceuticals, said: "The combination of our business with the Multi-Source Injectables operations is a major step forward for Hikma in the US and globally. The Business has an impeccable reputation for quality and customer service and excellent long-term customer relationships that we will build upon. We look forward to welcoming this new group of talented employees into the Hikma organisation."