Concordia snaps up most of Covis Pharma in $1.2bn deal

 
Joseph Millis
Concordia Healthcare yesterday agreed to buy almost all the commercial assets of closely held Covis Pharma and Covis Injectables for $1.2bn (£795m) in cash to diversify sales and boost margins.

The portfolio being acquired from the Zug, Switzerland-based Covis Pharma Holdings units consists of 18 branded and generic products and includes therapies to treat heart and nervous-system disorders, Concordia said in a statement.

Concordia is focused on legacy pharmaceutical products, orphan drugs and medical devices for diabetes.

“This is obviously a landmark transaction for Concordia and it takes us into a whole other realm,” Concordia chief executive Mark Thompson said in a conference call.

The all-cash transaction, which is expected to close in the second quarter of 2015, is the largest to date for Concordia.

The Toronto-based company plans to pay for the acquisition through a mix of term loans, bonds and equity, it said.

The acquisition is expected to boost per-share earnings 50 per cent, the company said.

Concordia expects to realise about $20m in cost savings through the combination of their operations, including staff reductions and distribution expenses.

Concordia has been building through acquisitions, including the purchase of Donnatal, an irritable bowel syndrome treatment, in March 2014 for $262m.

Thompson said the deal would allow Concordia to go after larger acquisition targets in the future.

“It more than doubles the size of the company,’’ Douglas Cooper, an analyst with Beacon Securities, said.