Cephalon, Inc. and CIMA LABS INC. Sign Definitive Merger Agreement

Cash Merger for $34 Per CIMA Share; Provides Cephalon with Drug Delivery Technologies; Will Accelerate Development and Launch of New Pharmaceutical Products

07-Nov-2003

Cephalon, Inc. and CIMA LABS INC. announced that they have signed a definitive merger agreement under which Cephalon will acquire all the outstanding common shares of CIMA for $34 per share in cash.

The total value of the transaction is approximately $515 million, or $397 million net of CIMA's cash and cash equivalents. The agreement was unanimously approved by the boards of directors of both companies and requires CIMA stockholder approval as well as customary regulatory approvals. The merger is expected to close in the first quarter of 2004. CIMA will become a wholly owned subsidiary of Cephalon.

The acquisition of CIMA -- a leader in the field of drug delivery technology -- will add a growing business to Cephalon, already one of the fastest growing biopharmaceutical companies. CIMA also offers Cephalon an opportunity to develop additional proprietary products using CIMA's innovative oral drug delivery technologies, including OraVescent (R). CIMA is developing an OraVescent form of fentanyl, which, if approved, would be a valuable product for the Cephalon pain care sales force.

"Combining CIMA's innovative delivery technologies together with our clinical development, regulatory, and sales and marketing experience will create tremendous new opportunities for Cephalon," said Frank Baldino Jr., Chairman and CEO of Cephalon.

Baldino said that Cephalon intends to encourage the growth of CIMA's core business of developing and manufacturing orally disintegrating tablets and to supplement its technology portfolio with Cephalon's own drug delivery assets, which were acquired in other mergers and acquisitions completed in the past 36 months.

Steven B. Ratoff, Chairman and Interim CEO of CIMA, said: "The merger with Cephalon provides a significant and immediate return to CIMA shareholders and is in the long-term best interests of CIMA employees and partners. We look forward to working with the Cephalon team to expand our leadership in ODT technology and accelerate the commercialization of our proprietary OraVescent fentanyl product."

Cephalon has approximately 1,400 employees at locations in the United States and Europe, including corporate headquarters in West Chester, Pennsylvania, and manufacturing sites in Salt Lake City, Utah, and in France. CIMA has approximately 275 employees in Eden Prairie and Brooklyn Park, Minnesota. Once the transaction closes, Baldino said he anticipates that CIMA and Cephalon could be integrated in a timely and seamless manner, and that Cephalon expects to maintain both of CIMA's Minnesota facilities.

JP Morgan acted as financial advisor to Cephalon in this transaction. Deutsche Bank Securities Inc. acted as financial advisor to CIMA.

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