Genomma Labs to Acquire Prestige Brands for $834 Million

Genomma Labs to Acquire Prestige Brands for $834 Million

Genomma Lab Internacional SAB, a
Mexican producer of over-the-counter drugs, said it plans to
acquire all shares of Prestige Brands Holdings Inc. for $16.6
per share, valuing the bid at $834 million.
The proposed all-cash transaction’s value for New York-
based Prestige doesn’t include debt, Genomma Lab said in a
filing today to the Mexican stock exchange. The offer represents
a 23 percent premium over Prestige’s closing price on Feb. 17,
according to the filing.
Prestige, based in Irvington, New York, distributes over-
the counter health-care and household cleaning products to
retail stores in the U.S., Canada and other international
markets. Dean Siegal, a Prestige spokesman, didn’t immediately
respond to a voicemail and e-mail requesting comment.
Genomma fell as much as 6.3 percent in Mexico City trading,
the biggest intraday decline since Sept. 22. The shares were
down 4.9 percent at 27.40 pesos at 8:33 a.m. local time.
Prestige rose 24 percent to $16.73 at 9:30 a.m. New York time,
after increasing 50 percent in the 12 months before today.
In January, Prestige increased the size of a term loan it’s
seeking to support its December purchase of 17 over-the-counter-
medicine brands, including digestive helpers Beano and Gaviscon,
from London-based GlaxoSmithKline Plc. The filing didn’t say
whether this effort would continue.

Due Diligence

The acquisition, which has been already approved by
Genomma’s board, will depend on the company’s due diligence of
Prestige and regulatory approvals, according to the statement.
The Mexico City-based company today submitted an acquisition
letter to Prestige Brands Holdings’ Chief Executive Officer
Matthew Mannelly, Genomma Lab said.
The Mexican stock exchange announced this morning that it’s
lifting the suspension of Genomma Lab Internacional shares after
one day without trading, the bourse said.
Genomma Lab is scheduled to report fourth-quarter earnings
Feb. 23.