GSK pays €2.78bn for skincare maker Stiefel
The move gives UK-based GSK an increased global footprint in the market for over-the-counter dermatology treatments and is expected to add annual global revenues of $1.5bn to GSK to total sales figures – representing 8 per cent of global sales in this category.
GSK says the acquisition marks a significant step towards growing and diversifying its business, while also offering new opportunities for revenues and synergies that should increase the profitability of the business as a whole.
Cost synergies will save $240m a year
Cost synergies are expected from combining the companies’ manufacturing and administrative functions and should deliver annual pre-tax savings of up to $240m by 2012, with total integration costs of $325m over a three year period.
The company also says that it intends to grow the existing Stiefel business portfolio with plans for a ‘robust new product pipeline’.
GSK CEO Andrew Witty said that the deal was part of the company’s ambitions to grow its business further through value-added acquisitions:
A new world-leader in dermatology is born
“This transaction will creates a new world-leading, specialist dermatology business and re-energise our existing dermatology products,” Witty said.
The deal means that GSK will pay $2.9bn in cash, while assuming $0.4bn in debts and a further $0.3bn in cash as a contingency against the future performance of the business.
Stiefel has carved out a name for itself worldwide as a specialist in minor dermatological problems, including dermatitis, psoriasis and acne.
Expanding the dermatology brand portfolio
To this end its three leading brands are the Duac acne treatment, Olux E treatment of dermatitis and Soriatane for the treatment of psoriasis, complementing GSK’s existing portfolio of dermatology brands that include Bactroban, Cultivate and Altabax.
In the lead up to the sale of the business, Stiefel has been readying some 15 new product development projects, which it says are currently in the late-stage of development and will focus on acne, fungal and dermatoses.
GSK says that it is not expecting to make any significant changes to the Stiefel business structure and that the existing CEO, Charles Stiefel, will remain in his position, for which he also serves as chairman of the Stiefel board of executives.
“This deal will increase the value of Stiefel’s dermatology pipeline by expanding the customer base to which we will be able to offer these products,” said Stiefel.
