NEW YORK (AP) - Forest Laboratories is buying Aptalis, which specializes in treatments for gastrointestinal problems and cystic fibrosis, for $2.9 billion in cash.
The company is buying the privately held Aptalis from its shareholders, which include private investment firm TPG.
Shares of Forest Labs jumped almost 15% to $67.57 in early trading Wednesday.
Forest Labs President and CEO Brent Saunders said in a statement that the transaction would help his company diversify its business. There's an anticipated $125 million in cost savings from the combination by 2016.
The acquisition is expected to add about 78 cents per share to Forest Labs' 2015 adjusted earnings and almost $700 million in revenue.
The deal requires review by anti-trust authorities in the U.S. and Canada. The buyout is targeted to close in the first half of 2014.
Aptalis had $688 million in sales in fiscal 2013, which ended in September. Its top three U.S. products, Canasa, Carafate, and Zenpep, made up more than 60% of its total 2013 sales. International sales comprised about 15% of revenue. Third-party delivery technology provider and drug maker Aptalis Pharmaceutical Technologies accounted for about 15% of revenue.
Forest Labs said it plans to fund the deal with available cash and debt. The company said due to the acquisition it has not yet started its previously announced accelerated stock repurchase program. Forest Labs said that once it completes permanent financing for the buyout it will consider starting the program.
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