Warner Chilcott Acquires P&G's Global Pharmaceuticals Business
P&G Focuses on Winning in Consumer Health Care
CINCINNATI and ARDEE, Ireland, Aug. 24, 2009
/PRNewswire-FirstCall/ -- The Procter & Gamble
Company (NYSE:PG)
and Warner Chilcott plc (NASDAQ:WCRX)
today announced an agreement for the sale of P&G's global
pharmaceuticals business to Warner Chilcott
for an up-front cash payment of $3.1 billion.
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Under the terms of the agreement, Warner Chilcott, a leading
specialty pharmaceuticals company, will acquire P&G's portfolio
of branded pharmaceutical products, including Asacol
HD (mesalamine) Delayed-Release Tablets for
ulcerative colitis, Actonel
(risedronate sodium) for osteoporosis, and the co-promotion rights
to Enablex (darifenacin) for the
treatment of overactive bladder, as well as P&G's prescription
drug product pipeline and manufacturing facilities in Puerto Rico
and Germany. In addition, the majority of the 2,300 employees
working on P&G's pharmaceuticals business are expected to
transfer to Warner Chilcott. Both companies expect the transaction
to close by the end of the 2009 calendar year, pending necessary
regulatory approvals.
"The acquisition of the P&G pharmaceutical brands and
employee talent is a transformational, strategic move for us," said
Roger Boissonneault, president and chief executive officer of
Warner Chilcott. "The acquisition transforms Warner Chilcott into a
global pharmaceutical company, expands our presence in women's
healthcare, establishes us in the urology market in advance of the
anticipated launch of our erectile dysfunction treatments, and adds
gastroenterology therapies to our product portfolio."
"This move enables us to focus singularly on winning in consumer
health care - Personal Health Care, Oral Care and Feminine Care,"
said Bob McDonald, president and chief executive officer of Procter
& Gamble.
McDonald extended special thanks to P&G's pharmaceuticals
employees. "These men and women have built a large and profitable
global business which has improved millions of lives," he said.
"Their welfare was a key consideration in the choice of a buyer. We
are deeply grateful to them and are glad they'll be able to
continue this work as part of another great company."
P&G said it believes Warner Chilcott will be a stronger and
better investor in P&G's pharmaceutical assets, brands and
capabilities because of Warner Chilcott's focus to grow its
pharmaceuticals business, versus P&G's decision to prioritize
investments on its consumer health care businesses.
The sale of P&G's pharmaceuticals business to Warner
Chilcott for a price of $3.1 billion will result in a one-time
earnings increase for P&G of approximately $1.4 billion
after-tax, or approximately $0.44 per share. P&G also said it
expects EPS dilution in the range of $0.10 to $0.12 per share in
fiscal year 2010 due to the lost earnings from the business and
stranded overhead costs. These figures assume the transaction will
close on November 1, 2009. P&G said that annualized EPS
dilution would likely be in the range of $0.16 to $0.18 per share.
The specific timing for the completion of the transaction will be
subject to certain regulatory approvals and other conditions set
forth in the purchase agreement. If the actual closing timing
differs from the date noted above, there will be adjustments to the
sale price, per the agreement between the companies. Updated
financial impacts will be provided when the transaction is
completed.
For Warner Chilcott, the acquisition expands its presence in
existing specialty pharmaceutical markets and provides access to
new physician offices in 14 countries. In addition, Warner Chilcott
will acquire P&G's pharmaceutical development capabilities and
clinical pipeline, which is expected to broaden Warner Chilcott's
product portfolio in future years. On a preliminary, unaudited
basis, P&G's pharmaceuticals business had revenues of
approximately $2.3 billion, and net income of approximately $540
million for the year ended June 30, 2009. Warner Chilcott intends
to finance the acquisition with debt proceeds and has received
commitments from a group of lenders to provide senior secured debt
facilities and a senior unsecured bridge facility.
Warner Chilcott's legal advisor is Davis Polk & Wardwell,
LLP and lead financial advisors are J.P. Morgan Securities Inc. and
Morgan Stanley & Co. Incorporated. Also advising Warner
Chilcott are BofA Merrill Lynch, Credit Suisse Securities (USA)
LLC, Barclays Capital Inc. and Citigroup Global Markets Inc.
Procter & Gamble's financial advisor is Goldman Sachs and its
legal advisor is Covington & Burling, LLP.
Conference Calls
Warner Chilcott will host a conference call open to all
interested parties, on Monday, August 24, 2009 beginning at 9:00
a.m. ET. The number to call within the United States and Canada is
(877) 852-6581. Participants outside the United States and Canada
should call (719) 325-4804. Investors and other interested parties
may also access the conference call via a simultaneous audio
webcast by visiting http://ir.wcrx.com/ and clicking on
Events & Presentations. A replay of the conference call will be
available for two weeks following the call and can be accessed by
dialing (888) 203-1112 from within the United States and Canada or
(719) 457-0820 from outside the United States and Canada. The
replay ID number is 7292431.
P&G will host a conference call regarding this transaction
on Monday, August 24, 2009 beginning at 9:00 a.m. ET. President and
Chief Executive Officer Bob McDonald and Chief Financial Officer
Jon R. Moeller will discuss the announcement. Media and investors
can access the live webcast at www.pg.com/investors. An audio
replay will be available for one week following the call and can be
accessed by dialing (888) 286-8010 or (617) 801-6888, confirmation
code 8633120. The webcast will also be available for replay at
www.pg.com/investors.
P&G Forward Looking Statements
All statements, other than statements of historical fact
included in this release, are forward-looking statements, as that
term is defined in the Private Securities Litigation Reform Act of
1995. Such statements are based on financial data, market
assumptions and business plans available only as of the time the
statements are made, which may become out of date or incomplete. We
assume no obligation to update any forward-looking statement as a
result of new information, future events or other factors.
Forward-looking statements are inherently uncertain, and investors
must recognize that events could differ significantly from our
expectations. In addition to the risks and uncertainties noted in
this release, there are certain factors that could cause actual
results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business
plans, including growing existing sales and volume profitably
despite high levels of competitive activity, especially with
respect to the product categories and geographical markets
(including developing markets) in which the Company has chosen to
focus; (2) the ability to successfully manage ongoing acquisition
and divestiture activities to achieve the cost and growth synergies
in accordance with the stated goals of these transactions without
impacting the delivery of base business objectives; (3) the ability
to successfully manage ongoing organizational changes designed to
support our growth strategies, while successfully identifying,
developing and retaining key employees; (4) the ability to manage
and maintain key customer relationships; (5) the ability to
maintain key manufacturing and supply sources (including sole
supplier and plant manufacturing sources); (6) the ability to
successfully manage regulatory, tax and legal requirements and
matters (including product liability, patent, intellectual
property, competition law matters and tax policy), and to resolve
pending matters within current estimates; (7) the ability to
successfully implement, achieve and sustain cost improvement plans
in manufacturing and overhead areas, including the Company's
outsourcing projects; (8) the ability to successfully manage
currency (including currency issues in certain countries, such as
Venezuela, China and India), debt, interest rate and commodity cost
exposures and significant credit or liquidity issues; (9) the
ability to manage continued global political and/or economic
uncertainty and disruptions, especially in the Company's
significant geographical markets, as well as any political and/or
economic uncertainty and disruptions due to a global or regional
credit crisis or terrorist and other hostile activities; (10) the
ability to successfully manage competitive factors, including
prices, promotional incentives and trade terms for products; (11)
the ability to obtain patents and respond to technological advances
attained by competitors and patents granted to competitors; (12)
the ability to successfully manage increases in the prices of raw
materials used to make the Company's products; (13) the ability to
stay close to consumers in an era of increased media fragmentation;
(14) the ability to stay on the leading edge of innovation and
maintain a positive reputation on our brands; and (15) the ability
to rely on and maintain key information technology systems. For
additional information concerning factors that could cause actual
results to materially differ from those projected herein, please
refer to our most recent 10-K, 10-Q and 8-K reports.
Warner Chilcott Forward Looking Statements
This press release contains forward-looking statements,
including statements concerning our operations, our economic
performance and financial condition, and our business plans and
growth strategy and product development efforts. These statements
constitute forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. The words "may," "might," "will," "should,"
"estimate," "project," "plan," "anticipate," "expect," "intend,"
"outlook," "believe" and other similar expressions are intended to
identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of their dates. These forward-looking statements are
based on estimates and assumptions by our management that, although
we believe to be reasonable, are inherently uncertain and subject
to a number of risks and uncertainties. The following represent
some, but not necessarily all, of the factors that could cause
actual results to differ from historical results or those
anticipated or predicted by our forward-looking statements: our
substantial indebtedness; competitive factors in the industry in
which we operate (including the approval and introduction of
generic or branded products that compete with our products); our
ability to protect our intellectual property; a delay in qualifying
our manufacturing facility to produce our products or production or
regulatory problems with either third party manufacturers upon whom
we may rely for some of our products or our own manufacturing
facilities; pricing pressures from reimbursement policies of
private managed care organizations and other third party payors,
government sponsored health systems, the continued consolidation of
the distribution network through which we sell our products,
including wholesale drug distributors and the growth of large
retail drug store chains; the loss of key senior management or
scientific staff; adverse outcomes in our outstanding litigation or
an increase in the number of litigation matters to which we are
subject; government regulation affecting the development,
manufacture, marketing and sale of pharmaceutical products,
including our ability and the ability of companies with whom we do
business to obtain necessary regulatory approvals; our ability to
manage the growth of our business by successfully identifying,
developing, acquiring or licensing new products at favorable prices
and marketing such new products; our ability to obtain regulatory
approval and customer acceptance of new products, and continued
customer acceptance of our existing products; changes in tax laws
or interpretations that could increase our consolidated tax
liabilities; the other risks identified in our Annual Report on
Form 10-K for the year ended December 31, 2008, as amended; and
other risks detailed from time-to-time in our public filings,
financial statements and other investor communications.
We caution you that the foregoing list of important factors is
not exclusive. In addition, in light of these risks and
uncertainties, the matters referred to in our forward-looking
statements may not occur. We undertake no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as may be required
by law.
About Procter & Gamble
Three billion times a day, P&G brands touch the lives of
people around the world. P&G has one of the strongest
portfolios of quality, leadership brands in consumer health and
wellness, including Align , Always , Crest , Metamucil , Oral-B ,
Pepto-Bismol , Prilosec OTC , Scope , Tampax , and Vicks , in
addition to its trusted consumer brands, including Ariel , Braun ,
Bounty , Charmin , Dawn , Downy , Duracell , Gillette , Head &
Shoulders , Iams , Lenor , Mach3 , Olay , Pantene , Pampers ,
Pringles , Tide , Wella , and Whisper . The P&G community
consists of approximately 135,000 employees working in about 80
countries worldwide. Please visit http://www.pg.com/ for
the latest news and in-depth information about P&G and its
brands.
About Warner Chilcott
Warner Chilcott is a leading specialty pharmaceutical company
currently focused on the women's healthcare and dermatology
segments of the U.S. pharmaceuticals market. It is a fully
integrated company with internal resources dedicated to the
development, manufacturing and promotion of its products.
WCRX-G
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Source: Procter & Gamble; Warner Chillcott
CONTACT: News Media, Tom Millikin, +1-513-622-1522, or
Investors/Analysts, John Chevalier, +1-513-983-9974, both of
Procter & Gamble;
or News Media, Juliane Snowden of Burns McClellan, +1-212-213-0006
ext: 343,
or Investors/Analysts, Rochelle Fuhrmann, +1-973-442-3281, both for
Warner
Chilcott
Web Site: http://www.pg.com/
Posted: August 2009
