arm as a hub for expansion into West Africa.
Promopharm has a good quality medium-sized production facility with strong capabilities in general formulation, including tablets, capsules, liquids, creams, ointments and injectables. It has a dedicated anti-infectives facility for oral penicillin. Promopharm also brings new manufacturing capabilities to Hikma, including eye-drops and effervescents. The facility offers the potential to increase current utilisation and capacity levels with limited incremental capital expenditure and future growth in the combined business is expected to enable cost and efficiency savings.
Promopharm's CEO and Chairman will remain in their current positions following the transaction. They bring with them considerable experience in the Moroccan market and the Chairman, as the former head of the Pharmaceutical Association of North Africa, also brings additional expertise. Their continued involvement will facilitate integration and they will be joined by an experienced Hikma team to support them in the key functions of operations, finance, and sales and marketing.
Promopharm generated revenue of $44.7 million (MAD 376 million) and EBITDA of $13.2 million (MAD 111 million) in 2010[5]. The business has been performing well in 2011 and is expected to deliver double-digit revenue and EBITDA growth for the full year. Hikma will consolidate Promopharm for the three months ending December 2011 and expects to incur transaction costs of approximately $6 million this year. The acquisition is expected to be earnings accretive in 2012.
The book value of the gross assets subject to the transaction, prior to the performance of the fair value exercise and excluding acquired intangible assets, was $70.3 million (MAD 550 million)[6] as of 30 June 2011. Promopharm had a net cash position of $16.4 million (MAD 129 million)[6] at 30 June 2011. The acquisition will be funded by new committed debt facilities in the form of a 7-year syndicated loan. Following the transaction, Hikma's leverage ratios remain comfortable and it expects to be able to de-lever quickly.
Hikma's acquisition of 63.9% of Promopharm has been approved by the Moroccan Ethical Council of Securities (Conseil Déontologique des Valeurs Mobilières ("CDVM")). Hikma will launch a mandatory tender offer for the remaining 36.1% of the Company, which is listed on the Casablanca Stock Exchange. Hikma will file a prospectus with the CDVM and following approval of this document, the mandatory tender offer will be launched. Hikma expects to complete the tender offer by the end of the year.
Commenting on the transaction, Said Darwazah, CEO of Hikma said, "Entering the Moroccan market has been a strategic priority for Hikma for some time and we are delighted to have acquired a company that offers such an excellent fit with our long term growth objectives. Establishing ourselves as a local manufacturer in Morocco completes our MENA footprint and strengthens our leading position in the region. Promopharm's impressive product portfolio and its high quality manufacturing capabilities bring exciting growth opportunities for our combined business, both in Morocco and across our other markets in MENA. The acquisition offers excellent potential to drive value creation. Promopharm has a strong management team and experienced operational and sales teams and we look forward to working with them. We will continue to pursue further value enhancing opportunities across our operations."
A conference call for analysts and investors will be held on Tuesday 4 October 2011 at 09:00 BST on London Local: +44(0)208-817-9301; UK Freephone: +44-800-634-5205; or US Freephone: +1-866-629-2704. A live webcast of the conference call will be available at. A recording of the call will be available on the Hikma website.
Centerview Partners acted as lead financial advisor to Hikma. Citi also provided financial advice on the transaction. Citi and Arab Bank jointly led the arrangement of the financing.. IMS Morocco, MAT June 2011
2. IMS Morocco, MAT June 2011
3. Pharma Outlook© Espicom Business Intelligence, Quarter II 2009
4. CIA World Factbook, July 2011 estimate
5. 2010 average FX rate of 0.1188, Source: Bloomberg
6. 30 June 2011 spot rate of 0.1277
Enquiries
Hikma Pharmaceuticals PLC
Susan Ringdal, Investor Relations Director +44(0)20-7399-2760 / +44(0)7776-477-050
FTI Consulting +44(0)20-7831-3113
Ben Atwell /Julia Phillips/Jonathan Birt/Matthew ColeI was planing to get this piece published when I first wrote it back in April. When that fell through, I decided to make some changes and repost it here.
There is something analogous, though it might betray my Protestant irreverence to say so, between the value an older Hutterite sees in the common community meal, and how a faithful Catholic describes the Holy Host. Of course, Hutterites don’t believe that we are eating the flesh and blood of Christ when we raise the spoon of Geaschtle soup to our lips, but there is something of the same, sacramental quality to a shared meal. Just as the Catholic feels malnourished when he is deprived of the Eucharist, so too the Hutterite feels alienated, his Geaschtle Soup somehow made secular, when it is eaten alone in his home. So, in these recent months, Hutterites and Catholics find themselves dog paddling in the same bowl. With the COVID-19 pandemic sweeping in waves across Canada, the US, and the entire world, Christians of all denominations must find new ways to practice their faith in a world turned upside down. Catholics attend virtual masses. Pope Francis prays for healing to a dark and empty St. Peter’s square. Hutterites listen to sermons on Zoom. In my own region in Manitoba, with gatherings limited to under ten people, we must take our meals at home, deprived of communal worship and shared meals. Even the 10:00 coffee break, a time of banter and chess for the working men, has been reduced to a shadow of itself. For many, this is unsettling.
The Hutterite life is a life of rhythm and routine. It is a participation in patterns of life older and deeper than yourself. To be a Christian in a Hutterian community, becomes, not so much an abstract belief, as much as finding ones place along the same, well-worn path. The daily pattern of communal meals, daily work and evening services is the liturgy of the Hutterite life. It is by this daily participation that the Christian virtues of faithfulness, selflessness, humility and patience are built into the very being of the Hutterite.
There is something sacramental about this life. For just as it is this daily grind which forms you, it is also this mundane existence where transcendence shines through—for those with the eyes to see. Hutterites encounter Christ in the one seated before them at breakfast, in the chirping birds on the way to work, and in the communal hymn sung at the service. It is the simple which reveals God, and it is the daily grind, in all its conflict, ugliness and pain, that sometimes shimmers and fades, to reveal, for a brief moment, the kingdom of God.
To have these ancient rhythms disrupted then, is for many of my fellow Hutterites, strange and unsettling. These shared practices are a key part of what forms and constitutes our identity. What does it mean to be a Hutterite, with community schools closed, meals taken at home, hymns sung over the public address system, and coffee break abridged? Likewise, for many of my fellow Hutterites, the call by leaders to “self isolate” and “practice social distancing” seems anathema to the Hutterian values of cooperation, selflessness and hospitality. What is a Hutterite in self isolation? That is the question of quarantine.
And yet, our God, a God made flesh, is a God of paradox. As people of the foolishness of the cross, for whom the cross is victory and death culminates in resurrection, we must always be on the lookout for an inversion: seemingly hopeless situations are precisely where resurrection springs from. What if the pandemic that seems so opposed to community life, could actually be the very vitalization of true community?
The rhythms of Hutterian life can become a lullaby; the well worn path, a rut; community life, a chore. That beautiful vision of life that caught hold of the first Hutterites can become distorted, smudged or ossified. The treasure buried and the lamp hidden under a basket. The pandemic makes us all ask: what is really important to us? When it comes down to life and death, the question becomes, what is essential? Put another way, the pandemic asks the question that haunts many of us: what is a Hutterite? Is a Hutterite someone who wears suspenders or a kerchief? Someone who goes dutifully to communal meals? Or does it go so much deeper? The pandemic forces us to strip back the layers of custom to get to the beating heart of what it means to be a Hutterite.
I saw this happen, in a small way, in my own community when the Manitoba government reduced gathering sizes to fifty in response to the COVID-19 crisis. This meant that we could no longer come together with the community to