Hikma Pharmaceuticals acquires US labs in $2.25bn deal

Drug developer Hikma Pharmaceuticals signed a deal to buy two firms from Boehringer Ingelheim in transactions worth a total of $2.25bn.

FTSE 100 listed Hikma planned to buy Roxane Laboratories and associated company Boehringer Ingelheim Roxane in a cash and shares deal that would make Hikma the sixth biggest company by revenue in the US generics market.

Hikma was to pay $1.18bn and issue 40m new shares, about 16.721% of the company, to Boehringer. At a share valuation of £23.50 per share, the deal was worth $2.65bn in total.

Hikma also agreed to make contingent cash payments of up to $125m, subject to the achievement of certain performance milestones.

In a statement, the company the drug company said it expected its new acquisition to achieve an earnings margin of about 35% over the medium term, and it should lift it earnings per share from 2016 onwards.