Acquisition Of Adams Respiratory Therapeutics
10 December 2007
ACQUISITION OF ADAMS RESPIRATORY THERAPEUTICS
BY RECKITT BENCKISER
Reckitt Benckiser Group plc (RB.L) ("Reckitt Benckiser") and Adams Respiratory
Therapeutics (NASDAQ: ARxT) ("Adams") today announce that they have entered
into a definitive agreement under which Reckitt Benckiser will tender for the
acquisition of Adams for $60 per share in cash, representing a total
consideration for Adams' fully diluted share capital of approximately $2.3bn (£
1.1bn). This transaction will be financed by Reckitt Benckiser by cash on hand
and existing credit facilities.
Adams is a NASDAQ listed specialty pharmaceutical company, headquartered in
Chester New Jersey, USA. Adams is exclusively focused on the development,
commercialisation and marketing of pharmaceuticals for the treatment of
respiratory disorders. Adams is currently active in the United States only and
markets two brands; Mucinex®, market leader in adult expectorants and Delsym®,
a leading cough suppressant. Mucinex represents most of Adams' sales.
Adams' net sales have grown from $14m in the fiscal year ending June 2003 to
$332m for the fiscal year ending June 2007. A key driver of the company's
growth has been the approval by the FDA in 2002 of the Mucinex patent protected
extended-release guaifenesin product for chest congestion relief. Income before
income taxes for the year ending June 2007 was $48m.
Commenting on the acquisition today, Bart Becht, Chief Executive Officer of
Reckitt Benckiser said:
"The acquisition of Adams Respiratory Therapeutics is another step forward in
Reckitt Benckiser's growth strategy in consumer healthcare. Adams will add to
our portfolio a new, rapidly growing Powerbrand in Mucinex, a market and
innovation leader in cough and congestion relief in the USA. Equally important,
it will provide Reckitt Benckiser an entry into health care in the USA, the
world's largest OTC market.
"We believe Adams' business has extremely good growth potential. Continued
focus and investment in the Mucinex brand's patent protected extended-release
chest congestion relief products in the USA, the potential for international
expansion of Mucinex from 2010 onwards and the launch of new products all
underpin this potential for strong future growth.
"We also expect to realize substantial cost synergies as a result of
integration of Adams into Reckitt Benckiser. Including these synergies, the
operating margins on the Adams business are expected to be similar to Reckitt
Benckiser's existing consumer healthcare business. The deal is expected to be
immediately earnings enhancing excluding a $60m one-off restructuring charge."
"The growth potential of the business, the importance of gaining an entry in
the USA healthcare market, and the synergies available make Adams a very
attractive addition to our portfolio. We have already shown with the
acquisition of Boots Healthcare International that we can generate shareholder
value in consumer healthcare. We believe Adams represents another attractive
opportunity for our shareholders."
"This agreement reflects the ongoing strength of our business and our
reputation as a leader in the U.S. OTC cough/cold market," said Adams'
President and Chief Executive Officer, Michael J. Valentino. "Adams'
market-leading brands and dedicated employees have been the driving force
behind our success. This is an exciting time for our company as we begin the
next phase in our extraordinary history, and a great opportunity for us to take
our leading brands global."
There will be a conference call for investors to discuss this announcement at
1430hrs UK time / 0930hrs EST today. Dial-in details are 0203 023 4465 for UK
participants and +44 203 023 4465 for international participants. Full details
will be posted on the Company's website at www.reckittbenckiser.com. A replay
facility will be available at +44 (0) 208 196 1998, Pin Number: 641321.
Details on Adams Respiratory Therapeutics, Inc.
Adams is a specialty pharmaceutical company focused on the late-stage
development, commercialisation and marketing of OTC and prescription
pharmaceuticals for the treatment of respiratory disorders. In the fiscal year
ending June 2007, Adams had net sales of $332m, income before income taxes of
$48m (as reported), and gross assets of $318m under US GAAP. Adams financials
will be restated onto Reckitt Benckiser policies on completion.
Adams product portfolio includes:
* Mucinex, the No.1 OTC expectorant in the USA, is a long-acting guaifenesin
product and the only FDA approved 12-hour expectorant. Mucinex is also
available in other dosage forms, including; Mucinex DM which combines the
long-acting expectorant properties of guaifenesin with the cough
suppressant dextromethorphan; Mucinex D which adds the decongestant
pseudoephedrine to the expectorant properties of long-acting guaifenesin;
and Maximum Strength Mucinex, maximum strength 1200 mg long-acting,
guaifenesin-based OTC products. All of the adult oral-solid Mucinex
products utilize a patent protected delivery system for the basic
ingredient, guaifenesin, which provides both immediate and long-lasting
release.
* Mucinex is also available in newly launched Mucinex Full Force Nasal Spray
and Mucinex Moisture Smart Nasal Spray. Both of these formulations contain
a topical nasal decongestant.
* Mucinex for Children has been launched in four formats, two liquid products
and two Mini-Meltsâ„¢ with a proprietary licensed delivery format. Adams has
recently launched Mucinex Cough Mini-Melts.
* Delsym is the only FDA approved 12 hour liquid cough suppressant available
without a prescription in the USA, and is based on patented technology to
provide the longest lasting OTC cough relief in a single dose on the
market. Delsym is currently sold in two adult and two children's lines.
Adams has a manufacturing facility in Fort Worth, Texas for the production of
adult Mucinex. Delsym is produced for Adams under a manufacturing supply
agreement.
Adams has grown rapidly in recent years, with compound growth of net sales over
the period Fiscal Year 2005- 2007 of 44%, and continuing growth to date in Q1
of the fiscal year to June 2008 of 22%.
The company has approximately 500 employees.
More detail on Adams is available at www.adamsrt.com where the Company's 10k
and other regulatory filings are available. To learn more about Mucinex®, visit
www.mucinex.com. To learn more about Delsym®, visit www.delsym.com.
Restructuring Charge
There will be a one-off charge of $60m for the cost of integrating and
restructuring Adams and further restructuring of the enlarged company.
Timetable & Integration
The transaction has been unanimously approved by the respective Boards of
Directors of both Adams and Reckitt Benckiser. Reckitt Benckiser intends to
launch the tender offer for Adams' shares within the next twenty business days
and this tender offer is anticipated to end in January or early February 2008.
The acquisition remains subject to anti-trust approvals in North America. No
material anti-trust issues are expected, and other conditions to closing are
customary.
The Board of Directors of Reckitt Benckiser has been advised by Merrill Lynch
and Arnold & Porter LLP served as legal counsel to Reckitt Benckiser. Morgan
Stanley served as financial advisor to Adams and Alston & Bird LLP served as
legal counsel to Adams.
For Further Information
Reckitt Benckiser +44 (0)1753 217 800
Tom Corran SVP Investor Relations & Corporate Communications
Mark Wilson Corporate Controller and Investor Relations Manager
(investor queries)
Fiona Fong Head of Corporate Communications (press queries)
PR Agency
Susan Gilchrist Brunswick +44 (0)207 404 5959
Cindy Leggett Flynn, Brunswick New York +1 212 333 3810
Adams Respiratory
Therapeutics
Janet M. Barth SVP Investor Relations & (908) 879-2428
Corporate Communications
Faith Pomeroy-Ward Sr. Manager Investor Relations (908) 879-1418
& Corporate Communications
Important Information
Notice to Investors: This announcement is neither an offer to purchase nor a
solicitation of an offer to sell securities. The tender offer for the
outstanding shares of Adams Respiratory Therapeutics, Inc. common stock has not
commenced. At the time the offer is commenced, an indirect, wholly owned
subsidiary of Reckitt Benckiser Group plc will file a tender offer statement on
Schedule TO with the Securities and Exchange Commission and Adams will file a
solicitation/ recommendation statement on Schedule 14D-9 with respect to the
offer. The tender offer statement (including an offer to purchase, a related
letter of transmittal and other offer documents) and the solicitation/
recommendation statement will contain important information that should be read
carefully before any decision is made with respect to the tender offer. Those
materials will be made available to Adams' security holders at no expense to
them. In addition, all of those materials (and all other offer documents filed
with the SEC) will be available at no charge on the SEC's Web site: www.sec.gov
.
Forward-looking Statements: This press release contains certain
"forward-looking" statements, including the expected timetable for completing
the proposed transaction between Reckitt Benckiser and Adams, the benefits of
the transaction, future earnings and growth, and the receipt of anti-trust
approvals. Such forward-looking statements can be identified by the words
"intend," "expect," and similar expressions and are subject to risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. Factors that could cause actual results to
differ materially include, among others, the satisfaction of conditions to the
closing of the proposed transaction; general economic, business and market
conditions; and other risk factors set forth under Item 1A. Risk Factors in
Adams' Annual Report on Form 10-K for the fiscal year ended June 30, 2007 and
under Item 1A. Risk Factors in Adams' Quarterly Report on Form 10-Q for the
quarter ended September 30, 2007. Except to the extent required by applicable
securities laws, we are not under any obligation to (and expressly disclaim any
such obligation to) update any forward-looking statements, whether as a result
of new information, future events, or otherwise. All statements contained in
this press release are made only as of the date of this release.
Notes for Editors
Reckitt Benckiser is a world leader in household cleaning, health and personal
care. The Company is truly global, with over 60 operating companies and some 43
manufacturing facilities worldwide and has sales in 180 countries. The Company
employs 22,000 people around the world. Amongst the Company's leading brands in
household are Lysol, the world leader in disinfecting cleaning, Calgonit &
Finish & Electrasol, the world leaders in automatic dishwashing, Woolite, world
leader in fine fabrics, Vanish & Spray'nWash, world leaders in fabric
treatment, Airwick and Mortein, both No.2 brands in air care and pest control
respectively. In Health & Personal Care (25% of net revenues), leading brand
positions include Veet, the world number one depilatory and Dettol the world's
leading antiseptic, Nurofen, the leading European analgesic, Strepsils, world
number one in medicated sore throat, Gaviscon the No.1 gastro intestinal remedy
in UK and Lemsip the UK no.1. in cold/flu remedies.
Reckitt Benckiser is headquartered in Slough just outside London, UK and is
listed on the London stock exchange. With a market capitalization of c.£20bn it
ranks among the top 25 UK listed companies. Reckitt Benckiser had net revenues
of £4.92bn, operating profit of £910m, and net income of £674m in 2006.
About Adams Respiratory Therapeutics, Inc.
Adams is a specialty pharmaceutical company focused on the late-stage
development, commercialization and marketing of over-the-counter and
prescription pharmaceuticals for the treatment of respiratory disorders.