STADA: Contract for the sale of US subsidiary STADA Inc.
07/13/2006 . Ad hoc Release
STADA Arzneimittel AG has today, on July 13, 2006, concluded a contract for the sale of its entire stake in its wholly-owned subsidiary STADA Inc., Cranbury, New Jersey, USA to DAVA Pharmaceuticals Inc., New Jersey, USA. According to this contract, the sale can be expected to be closed within the current third quarter 2006.
The proceeds from the sale, including all inventories, amounts to a balanced total of approx. USD 40 million or approx. EUR 31 million. The agreement calls for a staggered payment of the purchase price until 2009 which is covered by bank guarantees. DAVA is to pay STADA approx. USD 5 million on the closing date, a further USD 15 million after 18 months and finally, USD 20 million after 36 months. Depending on the balance sheet structure given at closing, as well as the exchange rate relevant at that time, STADA currently expects a selling loss from the deconsolidation of approx. EUR 10 million before taxes or approx. EUR 5 million after taxes.
With the sale, STADA has executed a complete withdrawal from the US business, since all necessary drug approvals, approval applications, brand names, development projects as well as existing inventories were transferred to STADA Inc. by different STADA Group companies and were thus – together with the local sales subsidiary STADA Pharmaceuticals Inc. – also sold. STADA’s now sold US business, with sales of EUR 7.9 million in the first quarter of 2006, contributed only 2.6% of Group sales.
DAVA can use the acquired company’s current name for a further 6 months. The contractual agreements also call for STADA’s Irish subsidiary, STADA Production Ireland Ltd., to take on contract manufacturing for some former STADA Pharmaceuticals Inc. products for a period of 5 years.
The sale of the STADA US business was carried out against the backdrop of limited operative possibilities in the existing business structures and concurrently high price and margin pressures in the US generics market. STADA will, however, continue to check whether, in the mid term, other profitable opportunities for a successful US business of its own will arise.
For more information, please contact:
STADA Arzneimittel AG
D-61118 Bad Vilbel
Tel.: +49 6101 603-113
Fax: +49 6101 603-506