Mylan to acquire Famy Care to create women’s healthcare franchise

This transaction especially complements Mylan’s pending acquisition of Abbott’s non-US developed markets speciality and branded generics business

Mylan Inc announced that it has, through its Indian subsidiary Mylan Laboratories signed a definitive agreement to acquire certain female healthcare businesses from Famy Care, a speciality women’s healthcare company with global leadership in generic oral contraceptive products (OCPs) for $750 million in cash plus additional contingent payments of up to $50 million.

The acquisition will build on Mylan’s existing partnerships with Famy Care in North America, Europe and Australia, and provide Mylan with an enhanced and now vertically integrated platform that will accelerate the company’s growth in the important global women’s healthcare space. This transaction especially complements Mylan’s pending acquisition of Abbott’s non-US developed markets speciality and branded generics business, which also includes a women’s healthcare portfolio and sales and marketing capabilities. Additionally, the acquisition of the Famy Care businesses will make Mylan a hormonal contraceptives leader in high-growth emerging markets around the world. The acquisition is expected to be immediately accretive to Mylan’s adjusted diluted earnings per share and growth profile upon closing. The transaction is expected to close in the second half of 2015, subject to regulatory approvals and certain closing conditions.

Heather Bresch, Chief Executive Officer, Mylan commented, “In 2008, Mylan established a partnership with Famy Care, significantly enhancing its presence in the women’s healthcare segment in the US and other developed country markets. With today’s acquisition, we are building on this successful partnership and further accelerating our global growth in this important therapeutic area. We see many opportunities to tap the large women’s healthcare market in Europe, particularly through our pending Abbott deal; the prospect of driving additional value from this business in North America; and exciting growth potential in emerging markets. Finally, we are excited to welcome Famy Care’s more than 900 employees to the Mylan family and look forward to their contributions to our mission of providing the world’s 7 billion people access to high quality medicine.”

Rajiv Malik, President Mylan added, “By adding this vertically integrated business and globalising our women’s healthcare platform, we are creating the right foundation to become a leader in this growing, attractive sector. Famy Care brings us a broad portfolio, strong technical capabilities and dedicated hormone manufacturing, which complement Mylan’s powerful global commercial footprint and supply chain infrastructure. In addition to the opportunities we see in North America and Europe, Famy Care’s businesses will strengthen our position in emerging markets, where we can build upon and leverage our existing capabilities, including the strong presence we have established through our anti-retroviral business and our track record of success in competing for tenders in these markets. Finally, we see opportunities for generating more front-end sales, in addition to Famy Care’s successful partnering strategy, as a result of our exceptional global infrastructure.”

Commenting on the transaction, JP Taparia, non-executive chairman of Famy Care said, “We foresee significant opportunities in the women’s health care business across developed and emerging markets, and the proposed transaction provides an opportunity for our team to capture the opportunity in an even more effective manner. Famy Care and Mylan have shared a very strong partnership since 2008, and the Famy Care team looks forward to taking our vision and ambitions to the next level within Mylan. In 2010, we started the process of transitioning from a family-owned business into a meaningful institutional player in the global pharmaceutical industry by enlarging our shareholder base with the investment by pan-Asian private equity firm, AIF Capital. Their involvement and support for Famy Care have been very helpful in the company’s achievement of critical corporate milestones over the last four years. Shareholders of Famy Care will evaluate and pursue other opportunities in the residual Famy Care business outside of women’s health care segment.”

Famy Care is the first generics company to have received pre-qualification from the World Health Organisation for hormonal contraceptives. This manufacturing base represents one of the lowest cost and largest dedicated to OCPs globally, and brings Mylan strong capabilities in OCP cycles, injectables, IUDs and tubal rings. It has a strong presence in the private, institutional and non-governmental organization sectors and markets its products in more than 90 countries around the world.

Mylan and Famy Care have an exclusive partnership dating to 2008, under which Famy Care develops and supplies OCP products to Mylan for distribution to customers in the US and certain other markets. In the US., Famy Care and Mylan have a portfolio of 12 approved products, with abbreviated new drug applications pending FDA approval for 30 products.

The global women’s health care market is growing at a compound annual rate of approximately 6%2, with hormonal contraceptives representing the largest and fastest growing products in the segment. Lower oral contraceptive penetration rates in emerging markets represent an important growth opportunity, and this opportunity is supported by global initiatives, such as Family Planning 2020, which provide funding for contraceptive access in these markets.

Centerview Partners and Goldman Sachs & Co. are serving as financial advisors to Mylan and Cravath, Swaine & Moore LLP and Luthra & Luthra are acting as legal advisors. Credit Suisse is serving as financial advisor to Famy Care and Covington & Burling LLP and AZB & Partners are acting as legal advisors.

Heather BreschJP TapariaMylanoral contraceptive productsRajiv Malik