Alkermes, Inc. (ALKS)

[surf1944]

2:31AM Alkermes to acquire Elan's (ELN) Elan Drug Technologies to create Alkermes plc; transaction is expected to be immediately accretive to cash earnings (ALKS) 14.47 : ALKS and Elan (ELN) announce the execution of a definitive agreement under which ALKS will merge with Elan Drug Technologies, the profitable, world-class drug formulation and manufacturing business unit of Elan, in a cash and stock transaction currently valued at ~$960 mln. Alkermes and EDT will be combined under a new holding co incorporated in Ireland. This newly created co will be named Alkermes plc. The transaction is expected to be immediately accretive to cash earnings and accelerates Alkermes' path to building a sustainably profitable biopharmaceutical co with expertise in developing treatments for central nervous system diseases and a broad, diversified portfolio of products and pipeline based on proprietary science and technologies. On a trailing 12-month basis as of March 31, 2011, the combined co would have had pro forma revenues of ~$450 mln and Adjusted EBITDA of ~$80 mln. On a pro forma basis, revenues are expected to grow in fiscal year 2012 and reach double digit growth rates in fiscal year 2013 and beyond. Pro forma Adjusted EBITDA margins for fiscal year 2012 are expected to be in the 15-20% range, yielding pro forma Adjusted EBITDA of between $70-90 mln. Pro forma Adjusted EBITDA margins are expected to expand to 30-35% in fiscal year 2013 and beyond. While synergies are not the main driver of the transaction, ~$20 mln of annual synergies in U.S. operations have been identified and are expected to be fully realized by fiscal year 2013.