Prestige Consumer Healthcare is growing its portfolio with a $230 million acquisition to buy a group of over-the-counter brands from Akorn Operating. Among the brands being acquired is TheraTears, which makes up 80% of the acquired brands’ revenues, as well as four other brands in the VMS and cough-cold categories.
“Prestige has a long and successful history in the eye care space highlighted by the iconic Clear Eyes brand,” said Ron Lombardi, chairman and CEO of Prestige Consumer Healthcare. “The acquisition of the proven TheraTears brand will further enhance this leading eye care franchise with additional long-term growth opportunities in the fast-growing ‘dry eye’ segment.”
Prestige said TheraTears is positioned well in the mild and episodic dry eye category, and that the portfolio of acquired brands complements its operational model — which includes outsourced manufacturing and similar distribution characteristics to the company’s existing business. Other brands included in the buy are Diabetic Tussin, MagOx, Mult-betic and Zostrix.
“Today’s acquisition announcement reinforces our strategy that acquisitions will remain part of a disciplined capital allocation approach, alongside debt reduction and continued investment in our leading brand portfolio,” Lombardi said. “The acquisition is a match with our criteria that focuses on long-term brand-building opportunities, fits with our business model and provides disciplined returns. We anticipate this proven strategy of acquiring, integrating and building brands to grow our portfolio will continue to build shareholder value for the long term.”
Prestige plans to finance the acquisition through a combination of funds from its existing credit facilities and cash on hand. The transaction is expected to close in the discal second quarter and be accretive to the company’s earnings per share and cash flow from operations.
Akorn said the sale was part of its efforts to concentrate on its pharmaceutical business.
"The sale of the Consumer Health business enables us to optimize our core prescription drug portfolio and enhances our capacity to make growth-oriented investments" said Douglas Boothe, Akorn president and CEO. "Throughout the strategic review, we focused on finding the right partner who can continue to facilitate the strong performance of the Consumer Health business and execute on the business' next phase of growth and maintain supply to highly valued customers and consumers. We are confident that Prestige is the right owner."