Monday, May 20, 2019 / 11:00 AM / Reuters Africa / Header Image Credit: Biznews
JOHANNESBURG (Reuters) - Aspen Pharmacare said on Monday that Mylan NV had exercised an option to buy the South African drug maker’s portfolio of prescription and over-the-counter products in Australia for 188 million Australian dollars ($130 million).
In December, Aspen said its wholly owned subsidiary incorporated in Mauritius, Aspen Global Incorporated, and its Australian subsidiaries had entered into a distribution arrangement with Alphapharm, a subsidiary of Mylan in respect of the portfolio commercialized in Australia and New Zealand.
That deal included an option for Mylan to buy the portfolio.
“The divestment is in line with the group’s ongoing portfolio management approach and its stated intention to not only acquire value enhancing products, but to also divest of non-core assets, thereby ensuring enhanced operational focus,” Aspen said in a statement.
Aspen added that 93 million Australian dollars will be payable by May 29, 30 million in January 2020 and up to 65 million will be payable in September 2020.
The proceeds will be used to reduce Aspen’s gearing, which has worried investors and caused a sharp decline in the drug maker’s shares.
The company’s net debt to EBITDA (earnings before interest, tax, depreciation and amortization) stood at 4.4 times at the end of June, at the upper end of a threshold of 4.75 times negotiated with its creditors in December.
It also sold its infant formula business to French dairy giant Lactalis to bring borrowing down.
On Friday the company said it has received confirmation from Lactalis that the New Zealand Overseas Investment Office has granted approval to Lactalis for the acquisition of its business in that country.