Amneal Pharmaceuticals, Inc. and AvKARE Inc. announced they have entered into a definitive agreement under which Amneal will acquire a 65.1% majority interest in AvKARE and its related affiliate doing business as R&S Northeast for an implied enterprise value of $340 million. Following the close of the transaction, AvKARE will operate on a standalone basis as an independent subsidiary of Amneal.
AvKARE is one of the largest private label providers of generic pharmaceuticals in the U.S. federal agency sector, primarily focused on serving the Department of Defense and the Department of Veterans Affairs. The company utilizes its relationships with more than 50 generic pharmaceutical vendors to offer a proprietary line of specially packaged products under its own labels.
“When we re-joined Amneal as Co-CEOs in August, we outlined a vision for our long-term strategy,” said Amneal Co-Founders and Co-Chief Executive Officers Chirag Patel and Chintu Patel. “While we remain extremely focused on organic growth, we also recognized that M&A would be a key element of our growth story, and that we would pursue the right opportunities that strategically fit our business. And we articulated what we would look for: opportunities to complement our existing distribution network, provide us with defensible, durable revenue streams and, ultimately, earnings that are accretive to ours. The AvKARE transaction meets all of these criteria, and we are excited about the value we expect it will create for patients, shareholders and other stakeholders.”
“The addition of AvKARE and its differentiated platform provides a unique opportunity for Amneal to diversify our business and open growth opportunities in the large, complex and growing federal healthcare market,” continued Messrs. Patel. “Amneal is among the largest generic drug companies domiciled in the U.S., and prioritizing our American operations and customers remains a top priority. With AvKARE, we believe Amneal will be well-positioned to utilize our extensive U.S.-based manufacturing network to supply products to the federal healthcare market. We look forward to completing the AvKARE transaction and strengthening our focus on providing affordable medicines to patients.”
“We are pleased to enter into this transaction with Amneal, a leading provider of affordable medicines to federal agencies and one of our long-term business partners,” said Steve Shirley, Chief Executive Officer of R&S Northeast and Executive Vice President of AvKARE. “We look forward to working with our entire network of vendor partners, as well as our customers at both the VA and DoD, and will continue to identify new opportunities in which we can better serve government agencies. In addition, we will continue to retain a large ownership interest in AvKARE and manage operations with our existing leadership team as an independent subsidiary of Amneal. We look forward to continuing to utilize our expertise in supplying affordable generic pharmaceuticals to federal agencies through our diverse vendor portfolio, and could not be more passionate about entering the next chapter of our company’s growth.”