New York City-based Pfizer Inc. has agreed to purchase Bristol, Tenn.-based King Pharmaceuticals in a deal valued at approximately $3.6 billion.
The company will pay up to $14.25 a share for King; the latter earned $1.78 billion in revenue last year. The news had positive impacts on both companies' shares as King closed at $10.15 and Pfizer saw an up tick of 10 cents to close at $17.48 on Tuesday.
Pfizer is the world's largest pharmaceutical company and has launched a series of acquisitions in recent year. It acquired Wyeth, including the company's operations in Philadelphia area, for a deal estimated to be around $68 billion last year.
The pharmaceutical giant has embarked on an acquisition spree as it is facing patent expirations on billions of dollars worth of drugs in the coming years. The company will lose patent of its top-selling cholesterol pill, Lipito next year; the brand earned the company up to $11.4 billion in revenues last year.
The company will benefit from King's drugs including its best selling pain medications. The drugs are abuse-resistant and thus hold great future in the medicinal field; two new drugs, Remoxy and Acurox, are in the pipeline. The brands will compound the current stockpile of Pfizer's pain relievers, which include the best selling brands of Lyrica and Celebrex.
Pfizer has estimates of saving at least $200 million after the deal is completed. King has a total of 2,600 employees and is known for its aggressive measures to develop abuse-resistant drugs, traits that will benefit Pfizer.
