Sun Pharma has announced the acquisition of Insite Vision US for the sum of $48 m in equity value (net debt of $3.5n on December14).
The transaction is valued at around 6.3x FY14 sales. Sun will commence a tender offer at a price of $0.35/ share, a 30% premium to the implied share price of the terminated acquisition between Insite and a competitor bidder’s price. Insite’s lifetime high and low share prices are $0.93 in April 2011 and $0.25 in Sep 2010. Its last closing price was $0.34, and it has a market cap of $46.8 m.
Insite Vision generated sales of $8.2/30.8/21.6 m in FY14/13/12 respectively, with R&D of $9.1/11.5/15.4 m. FY13 sales included one-time sales of rights of $15.5 for Besivance, and FY12 included a minimum royalty true-up payment of $11.9mn for Azasite. For the six months ended Jun 15, sales / EBITDA / net income were $3.8 /-6.4 /-7.5 m respectively.
The company expects to close the acquisition by December 2015.
Insite Vision focuses on the development of specialty ophthalmic products. The company operates in two major ophthalmic segments —anti-infective ($2bn market size) and ocular inflammation and pain ($1.7bn market size).
Sun is the process of establishing branded ophthalmic business in the US. It actively targets to expand its basket of specialty products and increasing sustainable source of revenue.
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