$2.3 billion Adams deal opens door for Reckitt Benckiser to enter U.S. OTC market
CHESTER, N.J. Reckitt Benckiser Group, a London company, and Adams Respiratory Therapeutics Monday morning announced Reckitt’s acqusition of Adams for $60 per share in cash, or approximately $2.3 billion.
“The acquisition of Adams Respiratory Therapeutics is another step forward in Reckitt Benckiser’s growth strategy in consumer healthcare,” stated Bart Becht, Reckitt chief executive officer. “Adams will add to our portfolio a new, rapidly growing powerbrand in Mucinex, a market and innovation leader in cough and congestion relief in the U.S. Equally important, it will provide Reckitt Benckiser an entry into health care in the U.S., the world’s largest OTC market,” he said. “We have already shown with the acquisition of Boots Healthcare International that we can generate shareholder value in consumer healthcare. We believe Adams represents another attractive opportunity for our shareholders.”
Becht told European analysts that Adams gives Reckitt an ideal platform to enter the U.S. market with its portfolio of healthcare products under its Boots Healthcare International division, which Reckitt acquired in 2005, though there are no concrete plans for a U.S. introduction of Boots’ products yet.
“Principally our focus in the U.S. will be to continue with the very successful strategy Adams has employed over the last couple years and to continue to build the franchise behind that,” Becht said. “At this stage of the game, we have no … plans to launch other brands but clearly it’s early days and we will be revisiting this issue.”
Boots’ brands not currently distributed in the U.S. include the antiseptic Dettol, Nurofen, an analgesic, the sore throat lozenges and spray Strepsils and the cough and cold franchise Lemsip.
Boots also owns Clearasil and the depilatory Veet, which are distributed in the U.S.
Adams is currently active in the United States only and markets two brands—Mucinex, market leader in adult expectorants and Delsym, a leading cough suppressant. Mucinex represents most of Adams’ sales. There is opportunity for Reckitt to expand distribution of both Mucinex and Delsym beyond U.S. borders.
Adams’ net sales have grown from $14 million in the fiscal year ending June 2003 to $332 million for the fiscal year ending June 2007. A key driver of the company’s growth has been the approval by the FDA in 2002 of the Mucinex patent protected extended-release guaifenesin product for chest congestion relief.
Allergan appoints Dawn Hudson to board
IRVINE, Calif. Allergan on Friday named Dawn Hudson to the company’s board, effective Jan. 28. Hudson is the former president and chief executive officer of Pepsi-Cola North America. In addition, Hudson served as chief executive officer of the PepsiCo foodservice division, which integrated the relevant units of PCNA and Frito-Lay North America with the Quaker, Tropicana and Gatorade brands.
“Hudson’s expertise and insights as a pioneer in brand development and consumer behavior will further strengthen Allergan’s leadership skills in consumer marketing,” stated David Pyott, Allergan’s chairman and chief executive officer. “Building on Allergan’s success record in developing and expanding markets, I am confident Ms. Hudson will add significant value in evaluating innovative practices and channels to help drive greater consumer awareness and appeal for Allergan’s core products.”
Hudson will initially serve as a member of the audit and finance committee and the organization and compensation committee.
Previously, Hudson served as vice chair of the American Beverage Association. She currently sits on the board of Lowe’s home improvement stores and is chairman of the Ladies Professional Golf Association.
Hi-Tech sales down due to cough-cold recalls
AMITYVILLE, N.Y. Early indications of the industrywide voluntary recall of children’s cough-cold medicines marketed for infants under the age of 2 are negative as it pertains to retail sales, as another cough-cold distributor pointed to the recall as a significant factor behind a companywide decline in sales.
For the three months ended Oct. 31, Hi-Tech Pharmacal reported net sales of $15.9 million, a decrease of 2 percent as compared with the same period last year. Sales for the healthcare products division, which markets the company’s OTC branded products, decreased 38 percent to $2.3 million, largely due to the discontinuation of the children’s formula of Diabetic Tussin at certain retailers.
“We believe the balance of the year will show growth as our core diabetic products continue to do well, and we prepare to introduce several exciting new products in the balance of the fiscal year,” stated Hi-Tech president and chief executive officer David Seltzer.
Last month, Prestige Brands reported its second-quarter results were negatively impacted in part by the voluntary removal of two kids cough-cold products under the Little Remedies banner.