TARRYTOWN, N.Y.-. — Prestige Brands Holdings, whose portfolio includes Chloraseptic sore throat treatments, Clear Eyes eye care products and Compound W wart treatments, has entered into an agreement to acquire Insight Pharmaceuticals, the maker of Monistat, for $750 million in cash.
As part of the transaction, Prestige will acquire tax attributes with a present value of approximately $100 million, which results in an effective purchase price of approximately $650 million. This transaction, combined with the Hydralyte transaction announced on April 15, is expected to result in pro forma revenues and adjusted EBITDA of approximately $800 million and $300 million, respectively for the company in fiscal 2015.
The transaction will extend Prestige’s portfolio of OTC brands to include Insight’s feminine care platform anchored by Monistat, an OTC yeast infection treatment. Insight’s portfolio also includes EPT home pregnancy test products and other feminine care brands. The acquisition will give Prestige a leading platform in feminine care in the United States and Canada, while also adding other OTC brands to its cough-cold, pain relief, eye and ear, and dermatological platforms.
The transaction is expected to be immediately accretive to the company’s earnings per share and free cash flow per share, exclusive of transaction, integration and purchase accounting items. The company anticipates closing on this transaction during the first half of this fiscal year, subject to customary closing conditions, including clearance under the Hart-Scott Rodino Antitrust Improvements Act of 1976.
“The acquisition of Insight Pharmaceuticals will add the attractive new feminine care platform to the Prestige portfolio. The platform is anchored by Monistat, the No. 1 brand in its category and the brand recommended most by doctors. Monistat will become the company’s largest and its first $100 million brand,” stated Matthew Mannelly, CEO of Prestige Brands.
He added, “The acquisition is expected to boost Prestige’s annual revenues to approximately $800 million, bringing us closer to our stated goal of becoming a billion dollar OTC products company. We expect that our already industry-leading free cash flow and EBITDA margins will further strengthen as a result of the acquisition of Insight. Our excellent financial profile and strong free cash flow will enable us to rapidly de-lever, consistent with our prior acquisitions.”
Insight Pharmaceuticals is a portfolio holding of Swander Pace Capital and its co-investment partner, Ontario Teachers’ Pension Plan.