TORONTO, May 15, 2014 /CNW/ - Concordia Healthcare Corp. ("Concordia" or the "Company") (TSX: CXR) (OTCQX: CHEHF), announced today that it has completed the
previously announced acquisition of Donnatal®, an adjunctive therapy in the treatment of irritable bowel syndrome
("IBS") and acute enterocolitis, from a privately held specialty
pharmaceutical company carrying on business as Revive Pharmaceuticals
("Revive Pharmaceuticals").
"I am extremely pleased with this landmark achievement as it
demonstrates Concordia's ability to successfully close a transaction of
this magnitude, thereby opening the Company to a new level of
acquisition opportunities in the future," said Mark Thompson, CEO of
Concordia. "Further, the substantial anticipated revenue to be
generated by Donnatal® is expected to have a significant and positive impact on Concordia's
net earnings and EBITDA."
Donnatal® is available in two formulations: immediate release Donnatal® Tablets, and immediate release Donnatal® Elixir, a fast acting liquid. For decades, Donnatal® has delivered gentle relief from the symptoms of IBS. In addition to
the drug, Concordia is acquiring the sales and marketing infrastructure
related to the product.
The International Foundation for Functional Gastrointestinal Disorders
reports that irritable bowel syndrome affects between 25 and 45 million
people in the United States (10 to 15 percent of the population) with a
greater incidence in women. According to the National Institutes of
Health, as many as 30 percent of Americans suffer from IBS at some time
in their lives. It is not associated with hospitalization and surgery,
but it can severely compromise a person's quality of life.
IBS is second only to the common cold as a cause of absenteeism from
work. IBS is one of the top 10 reasons for physician visits and the
second most frequently encountered diagnosis in clinical practice,
accounting for more physician visits than any symptoms other than those
for respiratory tract infections.
"Donnatal® is a medication that I have been prescribing for decades. It remains
an effective treatment and provides value for the management of
symptoms of irritable bowel syndrome," said Dr. David A. Peura, MD,
Emeritus Professor of Medicine at University of Virginia, former
President and Chairman of the Board of Governors of the American
Gastroenterological Association ("AGA") and recipient of the 2011
Julius Friedenwald Medal, the highest honor awarded by the AGA.
During 2013, Donnatal® generated revenues of US$49.1 million and EBITDA1 of US$40.2 million.
The Company acquired Donnatal® for US$200 million in cash and an aggregate of 4,605,833 common shares
of Concordia, representing approximately 16.17% of the Company's
outstanding common shares on a non-diluted basis (approximately 14.96%
on a fully-diluted basis) after giving effect to the acquisition. At
the closing of the acquisition, Paul Manning, founder of PBM Capital
Group and Revive Pharmaceuticals, was appointed to the board of
directors of the Company.
Management paid for the cash component of the acquisition through a
combination of available cash and debt financing. Accordingly, the
Company entered into a secured credit facility having a principal
amount of up to US$195 million, consisting of a US$170 million term
loan and a US$25 million operating line (the "Credit Facility") with GE
Capital, Healthcare Financial Services and a syndicate of lenders. The
Credit Facility is secured by the assets of the Company and the assets
of its material subsidiaries.
Torreya Partners and GMP Securities acted as financial advisors to
Concordia. Lazard Middle Market acted as financial advisor to Revive
Pharmaceuticals.
About Concordia
Concordia is a diverse healthcare company focused on legacy
pharmaceutical products, orphan drugs, and medical devices for the
diabetic population. The Company's legacy pharmaceutical business
consists of an ADHD-treatment drug, Kapvay® (clonidine extended release tablets), Ulesfia® (benzyl alcohol) Lotion a Head Lice Treatment, and an Asthma-related
medication, Orapred ODT® (prednisolone sodium phosphate orally disintegrating tablets).
Concordia's Specialty Healthcare Distribution (SHD) division (Complete
Medical Homecare) distributes medical supplies targeting diabetes and
related conditions. Concordia's orphan division, Pinnacle, markets
Photofrin® in the United States.
Concordia operates out of facilities in Oakville, Ontario, Lenexa,
Kansas (near Kansas City, Missouri), Bannockburn, (near Chicago),
Illinois and Bridgetown, Barbados.
About Revive Pharmaceuticals
Charlottesville, Virginia-based Revive Pharmaceuticals is a privately
held specialty pharmaceutical company that specializes in selling,
distributing, marketing and manufacturing Rx products that help improve
patients' health and quality of life.
1As used herein, "EBITDA" is defined as net income adjusted for net
interest expense, income tax expense, depreciation and amortization.
Management uses EBITDA to assess operating performance.
Non-IFRS Measures
This press release makes reference to certain non-IFRS measures. These
non-IFRS measures are not recognized measures under IFRS and do not
have a standardized meaning prescribed by IFRS, and are therefore
unlikely to be comparable to similar measures presented by other
companies. When used, these measures are defined in such terms as to
allow the reconciliation to the closest IFRS measure. These measures
are provided as additional information to complement those IFRS
measures by providing further understanding of the Company's results of
operations from management's perspective. Accordingly, they should not
be considered in isolation nor as a substitute for analyses of the
Company's financial information reported under IFRS. Management uses
non-IFRS measures such as EBITDA and Adjusted EBITDA to provide
investors with a supplemental measure of the Company's operating
performance and thus highlight trends in the Company's core business
that may not otherwise be apparent when relying solely on IFRS
financial measures. Management also believes that securities analysts,
investors and other interested parties frequently use non-IFRS measures
in the evaluation of issuers. Management also uses non-IFRS measures
in order to facilitate operating performance comparisons from period to
period, prepare annual operating budgets, and to assess its ability to
meet future debt service, capital expenditure, and working capital
requirements.
Notice regarding forward-looking statements:
This release includes forward-looking statements regarding Concordia and
its business, which may include, but is not limited to, statements with
respect to the acquisition, the impact of the acquisition on
Concordia's financial performance (including its net earnings and
EBITDA), Concordia's growth and other factors. Often, but not always,
forward-looking statements can be identified by the use of words such
as "plans", "is expected", "expects", "scheduled", "intends",
"contemplates", "anticipates", "believes", "proposes" or variations
(including negative and grammatical variations) of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will" be taken, occur or be achieved.
Such statements are based on the current expectations of Concordia's
management, and are based on assumptions and subject to risks and
uncertainties. Although Concordia's management believes that the
assumptions underlying these statements are reasonable, they may prove
to be incorrect. The forward-looking events and circumstances discussed
in this release may not occur by certain specified dates or at all and
could differ materially as a result of known and unknown risk factors
and uncertainties affecting Concordia, including risks regarding the
pharmaceutical industry, the failure to obtain regulatory approvals,
economic factors, market conditions, the equity markets generally,
risks associated with growth and competition, risks associated with the
acquisition and many other factors beyond the control of Concordia.
Although Concordia has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause actions, events or results to differ from those
anticipated, estimated or intended. No forward-looking statement can be
guaranteed. Except as required by applicable securities laws,
forward-looking statements speak only as of the date on which they are
made and Concordia undertakes no obligation to publicly update or
revise any forward-looking statement, whether as a result of new
information, future events, or otherwise.
SOURCE Concordia Healthcare Corp.
