Generic drug maker Mylan said it will buy Agila Specialties for $1.6 billion in cash, expanding its offerings of injectable drugs and its sales in international markets.
Mylan, currently the fourth-largest maker of generic drugs in the world, is buying Agila from Strides Arcolab. It could pay Strides another $250 million based on other undisclosed conditions. Mylan said the deal will give it new generic injectable drugs and will help it enter the market in emerging markets like Brazil.
The Pittsburgh company expects the Agila purchase will add to its earnings. The transaction is expected to close in the fourth quarter subject to regulatory approval.
Mylan said it will take out a $1 billion term loan from Morgan Stanley to help finance the acquisition. The company said it is not taking on any debt from Agila in the deal.
Both Agila and Strides are based in India.
Mylan gets most of its revenue from generic drugs, but it also handles the U.S. marketing of EpiPen, an epinephrine auto-injector developed by Pfizer Inc. for the treatment of severe allergic reactions.
The company expanded it business into India in early 2007 by buying a majority stake in Matrix Laboratories. Later that year it bought Merck KGaA's generic business for $7.7 billion, expanding into Europe, Africa, the Middle East and the Asia-Pacific region. In 2009 Mylan bought the rest of Matrix. The company's sales grew 11 percent to $6.8 billion in 2012.
Mylan also reported its fourth-quarter results on Wednesday. The company said its net income rose 25 percent to $162 million, or 39 cents per share. Per-share results benefited from a 4 reduction in average shares outstanding year over year. During the fourth quarter, Mylan repurchased about 18 million shares for roughly $500 million.
Excluding restructuring and other one-time items, it earned 65 cents per share. Revenue rose 13 percent to $1.72 billion.
Analysts expected adjusted income of 64 cents per share and $1.73 billion in revenue, according to FactSet.
Looking ahead, Mylan is forecasting adjusted income of $2.75 to $2.95 per share and revenue of $7 billion to $7.4 billion in 2013. Analysts expect income of $2.81 per share and $7.14 billion in revenue on average.
Shares of Mylan gained 24 cents to close at $28.57 during the regular session, then added 3.3 percent to $29.50 in after-hours trading.