AMAG Pharmaceuticals To Acquire Cord Blood Registry For $700 Mln

(RTTNews) - Specialty pharmaceutical company AMAG Pharmaceuticals, Inc. (AMAG) agreed Monday to acquire Cord Blood Registry or CBR, the world's largest stem cell collection and storage company serving pregnant women and their families, for $700 million. The deal, unanimously approved by boards of directors of both companies, is expected to close in the third quarter of 2015.

"CBR is a strong strategic fit for our maternal health business and will advance our strategy to pursue differentiated products in growing specialty markets. CBR is the most recognized stem cell banking brand among healthcare providers and is the top choice for families who choose to store cord blood, not only for their known clinical uses today, but also for their broader potential future utility," AMAG CEO William Heiden said.

Waltham, Massachusetts-based AMAG said the deal will help expand its suite of maternal health offerings and add a high-margin business with complementary commercial capabilities and attractive future growth opportunities to the AMAG portfolio.

CBR owns a state-of-the-art storage facility of more than 600,000 preserved umbilical cord blood and tissue stem cell units, which represents more than half of all privately stored cord units in the U.S.

As modern medicine advances, cord blood stem cells will continue to be an important resource in harnessing the body's own potential to heal itself.

CBR generated pro forma revenue of about $126 million and adjusted EBITDA of $45 million. AMAG currently projects 2015 pro forma revenue to be in line with or slightly above 2014 levels.

The deal is expected to further diversify AMAG's revenue base, be immediately accretive to adjusted EBITDA and earnings per share, and result in expense synergies of about $15 million annually.

"Combining CBR with AMAG presents exciting opportunities for both companies. CBR is poised for continued commercial success and future growth with our leading consumer healthcare expertise and the ongoing stem cell research studies in regenerative medicine," CBR CEO Geoff Crouse stated.

Following the closure of the deal, Crouse will continue to lead the CBR business, and AMAG intends to name other CBR executives who will be joining AMAG in the near future.

AMAG noted that it will fund the deal with $800 million in committed debt financing secured from Jefferies Finance LLC and Barclays Capital as well as AMAG's existing balance sheet cash. The amount will also be sufficient to repay AMAG's senior secured term loan as well as pay fees and expenses related to the deal.

AMAG closed Wednesday's regular trading session at $70.36, down $1.57 on a volume of 0.93 million shares.