UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 1.01. | Entry into a Material Definitive Agreement. |
The information in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
| ITEM 2.01. | Completion of Acquisition or Disposition of Assets. |
As previously announced, on March 1, 2021, Perrigo Company plc (the “Company,”) entered into a Stock and Asset Purchase Agreement (the “Agreement”) with Padagis LLC (f/k/a Vestas Pharma LLC) (“Buyer”), a Delaware limited liability company and affiliate of Altaris Capital Partners, LLC, pursuant to and subject to the terms and conditions of which, Buyer would acquire the assets and liabilities constituting the Company’s Generic Rx Pharmaceuticals business (the “Business”) (the “Transaction”).
On July 6, 2021, the Company completed the previously announced sale of the Business to Buyer pursuant to the Agreement for aggregate consideration of $1.55 billion, subject to customary adjustments for cash, debt, working capital and transaction expenses. The foregoing purchase price includes approximately $53 million of reimbursements which Buyer will be required to deliver in cash to the Company pursuant to the terms of the Agreement.
The foregoing description of the Transaction does not purport to be complete and is qualified in its entirety by reference to the full text of the Agreement, a copy of which was filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 2, 2021, and the full text of which is incorporated herein by reference.
On July 6, 2021, in connection with the closing of the Transaction, the Company entered into an Amendment to the Agreement with Buyer (the “Amendment”). The Amendment sets forth additional agreements of the Company and Buyer with respect to, among other things, certain tax, employee benefits, cash management, shared systems and third-party consent matters.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.2, and the terms of which are incorporated herein by reference. The matters set forth in the Amendment are also modified in important part by the disclosure schedules and annexes thereto which are not filed publicly and which are subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The Company does not believe that these schedules and annexes contain information that is material to an investment decision.
| ITEM 9.01. | Financial Statements and Exhibits. |
(b) Pro Forma Financial Information.
The unaudited pro forma condensed financial information of the Company giving effect to the Transaction is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
(d) Exhibits.
| Exhibit |
Description | |
| 10.1* | Stock and Asset Purchase Agreement, by and between Perrigo Company plc and Padagis LLC (f/k/a Vestas Pharma LLC, dated as of March 1, 2021 ((incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of Perrigo Company plc filed with the SEC on March 2, 2021). | |
| 10.2* | Amendment to Stock and Asset Purchase Agreement, by and between Perrigo Company plc and Padagis LLC, dated as of July 6, 2021. | |
| 99.1 | Unaudited Pro Forma Condensed Financial Information of Perrigo Company plc | |
| 104 | Cover Page Interactive Data file (embedded within the Inline XBRL document) | |
| * | Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and attachments have been omitted and will be furnished to the SEC supplementally upon request. |
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this Current Report on Form 8-K may be so-called “forward-looking statements” within the meaning of, and subject to the safe harbor created by, Section 21E of the Securities Exchange Act of 1934, as amended. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the Company’s, or its industry’s, actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In particular, statements about the Company’s expectations, beliefs, plans, objectives, assumptions, future events or future performance contained in this form, are forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “forecast,” “predict,” “potential” or the negative of those terms or other comparable terminology. The Company has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While the Company believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company’s control. Risks and uncertainties include risks relating to the success of the sale of the Business, including the ability to achieve the expected benefits thereof, and potential costs or liabilities incurred or retained in connection with the Transaction that may exceed the Company’s estimates or adversely affect the Company’s business or operations. These and other important factors, including those discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 and in any subsequent filings with the SEC and in other investor communications of the Company from time to time, may cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this document are made only as of the date hereof, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| (Registrant) | ||||||
| PERRIGO COMPANY PLC | ||||||
| By: | /s/ Todd W. Kingma | |||||
| Dated: July 12, 2021 | Todd W. Kingma | |||||
| Executive Vice President, General Counsel and Secretary | ||||||
Exhibit 10.2
AMENDMENT TO STOCK AND ASSET PURCHASE AGREEMENT
This Amendment (this “Amendment”), dated as of July 6, 2021, is made and entered into by and between Perrigo Company plc (“Seller”) and Padagis LLC (“Purchaser”, and together with Seller, the “Parties”). Capitalized terms used and not otherwise defined herein have the meanings set forth in the Agreement (as defined below).
WHEREAS, Seller and Purchaser are parties to that certain Stock and Asset Purchase Agreement, dated March 1, 2021 (the “Agreement”); and
WHEREAS, the Parties desire to amend the Agreement and agree to certain other matters as set forth in this Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
A. Amendments to the Agreement. The Agreement is hereby amended as follows:
1. Section 5.4(h). A new Section 5.4(h) is hereby added to the Agreement, to read in its entirety as follows:
“The Parties acknowledge that for purposes of providing certain services under the Transition Services Agreement and to facilitate the transition to the independent operation of the Business and the Retained Seller Business, Purchaser and certain of its Representatives, and Seller and certain of its Representatives may have access to a shared enterprise resource planning system (the “Shared ERP System”) following the Closing. Without limiting the covenants and agreements set forth in Section 5.3 or the other covenants and agreements set forth in this Section 5.4 (including, in each case, any exceptions thereto): (i) Purchaser agrees that it shall not, and shall cause its Representatives not to, use, interfere with or make any adjustments, changes or edits to, the Shared ERP System or any information contained therein to the extent relating to the Seller Retained Business or any Excluded Assets or Retained Liabilities; and (ii) Seller agrees that it shall not, and shall cause its Representatives not to, use, interfere with or make any adjustments, changes or edits to, the Shared ERP System or any information contained therein to the extent relating to the Business or any Purchased Assets or Assumed Liabilities; provided, that nothing in the foregoing clauses (i) or (ii) shall prohibit Purchaser, Seller or their respective Representatives, as applicable, from using or making adjustments, changes or edits to the Shared ERP system or any information contained therein in connection with the provision or receipt of services pursuant to and in accordance with the terms of the Transition Services Agreement.”
2. Section 5.7(j). Section 5.7(j) of the Agreement is hereby amended and restated, to read in its entirety as follows:
“Nonqualified Deferred Compensation Plans. Effective as of the Closing, Purchaser shall establish a nonqualified deferred compensation plan (the “Purchaser Deferred Compensation Plan”) for the benefit of each Transferred Business Employee who, as of immediately prior to the Closing, was eligible to participate in the Perrigo Nonqualified Deferred Compensation Plan (the “Seller Deferred Compensation Plan”). Effective as of the Closing, the Purchaser Deferred Compensation Plan shall assume the account balances of the Transferred Business Employees in the Seller Deferred Compensation Plans (which shall be fully vested as of the Closing), provided that an amount equal to the aggregate fair market value of such account balances as of the Closing Date shall be treated as Funded Debt (and subject to adjustment in accordance with Section 2.9). In addition, Seller shall be responsible for making required Seller contributions accrued under the Seller Deferred Compensation Plan by the Transferred Business Employees from January 1, 2021 through the Closing, which amount shall be paid to Purchaser or its Affiliate at the time such Seller contributions would otherwise be made to such Transferred Business Employees had they remained active participants in the Seller Deferred Compensation Plan, and following such payment, Seller and its Affiliates and the Seller Deferred Compensation Plans shall be relieved of all Liabilities related to the participation of the Transferred Business Employees in the Seller Deferred Compensation Plans. Purchaser shall undertake reasonable efforts to notify Seller when the account balances, and the amount thereof, of the Transferred Business Employees under the Purchaser Deferred Compensation Plan are paid to the Transferred Business Employees (or their beneficiaries), with such notice to be made as soon as practicable after the end of each calendar year in which any such payments are made.
Between the Closing and the such time as Purchaser implements a platform for participants in the Purchaser Deferred Compensation Plan to view their account balances and manage their investments, the Transferred Business Employees shall be provided access by Seller to the platform applicable to the Seller Deferred Compensation Plan for purposes of viewing their historical account balance as of the close of business on July 2, 2021; provided that Purchaser and its Affiliates shall indemnify Seller and its Affiliates for any Liabilities incurred or suffered by Seller or any of its Affiliates in connection with the provision of such post-Closing services described in this sentence.”
3. Section 5.7(p). A new Section 5.7(p) is hereby added to the Agreement, to read in its entirety as follows:
“Flexible Spending Accounts. Seller and Purchaser shall take all actions necessary or appropriate so that, effective as of the Closing Date the account balances (whether positive or negative) (the “Transferred FSA Balances”) under the applicable flexible spending plan of Seller or its Affiliates (collectively, the “Seller FSA Plan”) of the Transferred Business Employees will be transferred to one (1) or more comparable plans of Purchaser or its Affiliates (collectively, the “Purchaser FSA Plan”) and Purchaser or its Affiliates shall continue to administer the Transferred FSA Balances in the Purchaser FSA Plan in accordance with its terms and applicable Laws, including IRS Revenue Procedure 2002-32 and IRS Notice 2021-15.”
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B. Amendments to the Seller Disclosure Schedules. The Seller Disclosure Schedules are hereby amended as follows:
1. Section 2.4(s) of the Seller Disclosure Schedules is hereby amended to reflect the changes to specified Regulatory Approvals as set forth on Schedule A-1 to this Amendment.
2. Item 1 of Section 5.7(f) of the Seller Disclosure Schedules is hereby amended and restated, to read in its entirety as set forth on Schedule A-2 to this Amendment.
C. Other Agreements.
1. The Parties agree that the version of the Internal Restructuring Plan set forth on Schedule B to this Amendment, together with the assignments and assumptions contemplated by (x) that certain Assignment and Assumption Agreement, dated as of July 6, 2021 by and between Perrigo UK Finco Limited Partnership, Perrigo Company plc, and Perrigo Israel Pharmaceuticals Ltd. and (y) that certain Assignment and Assumption Agreement, dated as of July 6, 2021, by and between Perrigo Company plc and Padagis US LLC, reflect all amendments and modifications to the Internal Restructuring Plan as of immediately prior to the Closing, and that the Parties have consented to each such amendment or modification. For the avoidance of doubt, the consent in the foregoing sentence does not extend to any documents or agreements that implement the Internal Restructuring Plan, other than the agreements specified in clauses (x) and (y) of the foregoing sentence (it being understood that this sentence shall not imply that any such consent was required).
2. The Parties agree that notwithstanding that the versions of such agreements or instruments executed and delivered at the Closing may deviate from the applicable forms attached to the Agreement, the Transition Services Agreement, Assignment and Assumption Agreement and Bill of Sale, Purchaser Manufacturing and Supply Agreement, Seller
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Manufacturing and Supply Agreement, ORx Distribution Agreement and IP Assignment Agreements (including, in each case, the exhibits, schedules and annexes thereto) executed and delivered at the Closing are the final and definitive versions of such agreement or instruments.
3. The Parties agree that not more than seven (7) Business Days following the Closing Date, Purchaser will provide written notice to Seller specifying Purchaser’s final determination as to whether Purchaser will (a) instruct Seller to (subject to Section 2.10(h) of the Agreement regarding the sharing of Specified Consent Fees) pay the fee contemplated by Section 10.6.2 of the Contract set forth on Item #3 of Section 2.10(h) of the Seller Disclosure Schedules (the “Specified Consent Contract”) or (b) deliver written acceptance of the contractual obligation to comply with the restrictions set out in clauses 10.2.1 to 10.2.5 of the Specified Consent Contract in accordance with Section 10.6.1 of the Specified Consent Contract (in which case Purchaser will deliver, within one (1) Business Day, such written acceptance).
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4. Seller covenants and agrees that any dividend or other distribution in respect of shares of an Israeli Purchased Entity (or deemed dividend or distribution in respect of shares of an Israeli Purchased Entity) contemplated by the settlement agreement entered into with the Israel Tax Authority prior to Closing (an “Israel Settlement Distribution”) will have been made prior to the Closing. For the avoidance of doubt, and without expanding or modifying the definition of Excluded Taxes, the Parties acknowledge and agree that any Tax imposed on any Israeli Purchased Entity by the Israel Tax Authority on any Israel Settlement Distribution shall constitute an Excluded Tax for all purposes of the Agreement.
5. The Parties agree that Purchaser shall not be required to pay or cause to be paid to Seller the amount of any Tax Benefit pursuant to the provisions of Section 6.10(a) of the Agreement to the extent that the Tax Items that resulted in such Tax Benefit were actually utilized to reduce the amount of Excluded Taxes (including by virtue of any such Tax Item being treated as a deduction in a Pre-Closing Period) and actually reduced the amount of a payment made by Seller or any of its Subsidiaries (including the Purchased Entities prior to the Closing), whether such payment was made to an applicable Tax Authority or as an indemnification payment required to be made by Seller pursuant to the Agreement, in respect of Excluded Taxes. For the avoidance of doubt, nothing in this paragraph shall be interpreted as modifying Purchaser’s obligations under Section 6.10(a) of the Agreement in respect of a Tax Benefit resulting from a Tax Item that was utilized to reduce the amount of Excluded Taxes if Seller or any of its Subsidiaries (including the Purchased Entities prior to the Closing) has previously paid (whether to the applicable Tax Authority or as an indemnification payment pursuant to the Agreement) the amount of such Excluded Taxes that was determined without taking into account the effect of such Tax Item.
6. The Parties agree that the matter set forth on Schedule C to this Amendment and any claims, causes of action, defenses and rights of offset or counterclaim, or settlement agreements arising therefrom, is a Purchased Asset.
7. The Parties agree to work in good faith to negotiate and execute an ex-U.S. distribution/supply agreement within 30 days of Closing in respect of the products set forth on Schedule D to this Amendment, with economic terms consistent with the economics as between the Retained Seller Business and the RX Business in effect as of immediately prior to Closing and consistent with the
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carve-out financials provided by Seller to Purchaser for the Rx Business. The legal terms and risk allocation will be based upon the relative economic benefits of the Parties. If the Parties agree on a cost plus arrangement, then the terms will be based upon the supply agreements with proportional limits of liability.
8. The Parties agree to the matters set forth on Schedule E to this Amendment.
D. Miscellaneous. This Amendment and the Agreement, together, contain the complete agreement among the Parties and supersede any prior understandings, agreements, letters of intent, or representations by or among such parties, written or oral, that may have related to the subject matter hereof in any way. Except as expressly set forth above, the Agreement, as amended hereby, shall remain in full force and effect, and this Amendment does not amend or waive any other term or condition of the Agreement. The terms and provisions of Article X of the Agreement are incorporated herein by reference as if set forth herein in their entirety and shall apply mutatis mutandis to this Amendment.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Parties have executed or caused this Amendment to be executed as of the date first written above.
| PERRIGO COMPANY PLC | ||
| By: | /s/ Murray S. Kessler | |
| Name: Murray S. Kessler Title: President and Chief Executive Officer | ||
| PADAGIS LLC | ||
| By: | /s/ George Aitken-Davies | |
| Name: George Aitken-Davies Title: Authorized Signatory | ||
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION
(In millions, except share information)
On July 6, 2021 Perrigo Company plc (“Perrigo” or “the Company”) completed the previously announced divestiture of its generic RX Pharmaceuticals business ( “RX Business”) to Altaris Capital Partners, LLC (“Altaris” or the “Buyer”), pursuant to the terms of the Stock and Asset Purchase Agreement (the “Purchase Agreement”) entered into on March 1, 2021. Pursuant to the Purchase Agreement, Altaris acquired the RX Business for total consideration of $1.55 billion in cash, which included an adjustment to increase cash consideration by $53.3 million for the resolution of contingent purchase obligations resulting from the acquisition of a generic topical lotion ANDA on March 8, 2021.
The unaudited pro forma condensed consolidated financial statements are based upon the historical consolidated financial statements of Perrigo, adjusted to reflect the divestiture which met the criteria to be classified as a discontinued operation as of March 1, 2021. The following unaudited pro forma condensed consolidated financial statements of Perrigo should be read in conjunction with the historical consolidated financial statements of Perrigo and the related notes thereto as presented in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2020 filed with the Securities and Exchange Commission (“SEC”) on March 1, 2021 and Quarterly Report on Form 10-Q filed for the first quarter ended April 3, 2021 filed with the SEC on May 12, 2021.
To provide a better understanding of the impact of the divestiture, the following unaudited pro forma condensed consolidated financial statements are presented to reflect how the divestiture might have affected the historical financial statements had the transactions been consummated at an earlier date. The unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 are presented as if the divestiture had occurred on January 1, 2018, the beginning of the earliest period presented. The unaudited pro forma condensed consolidated balance sheet as of April 3, 2021 is presented as if the divestiture had occurred on that date. An unaudited pro forma condensed consolidated statement of operations for the quarter ended April 3, 2021 is omitted as no pro forma adjustments are applicable, and the RX Business was previously classified as a discontinued operation in the historical consolidated financial statements for the quarter ended April 3, 2021, which were included in our Quarterly Report on Form 10-Q for the quarter ended April 3, 2021 that was filed with the SEC on May 12. 2021.
The unaudited pro forma condensed consolidated financial statements were prepared in accordance with Article 11 of the Regulation S-X, updated for Release No 33-10786, which was effective January 1, 2021.
Article 11 of Regulation S-X requires that pro forma financial information include the following pro forma adjustments to the historical financial statements of the registrant as follows:
| • | Transaction Accounting Adjustments – Adjustments that reflect only the application of required accounting to the acquisition, disposition, or other transaction. |
| • | Autonomous Entity Adjustments – Adjustments that are necessary to reflect the operations and financial position of the registrant as an autonomous entity when the registrant was previously part of another entity. |
In addition, Regulation S-X permits registrants to reflect adjustments that depict synergies and dis-synergies of the acquisitions and dispositions for which pro forma effect is being given in our disclosures as management adjustments.
The transaction accounting adjustments to reflect the sale of the RX Business in the unaudited pro forma condensed consolidated financial statements include:
| • | The sale of the assets and liabilities of the RX Business pursuant to the Purchase Agreement presented on a discontinued operations basis in accordance with ASC 205, Discontinued Operations. |
| • | Estimated impact of the cash proceeds received in connection with the transaction, net of transaction costs and income taxes paid. |
There are no autonomous entity adjustments included in the pro forma financial information. Additionally, the unaudited pro forma condensed consolidated financial statements do not include management adjustments to reflect any potential synergies that may be achievable, or dis-synergy costs that may occur, in connection with the divestiture of the RX Business.
The unaudited pro forma condensed consolidated financial statements are presented for informational purposes only and is based upon estimates by Perrigo’s management, which are based upon available information and certain assumptions that Perrigo’s management believes are reasonable as of the date of this filing. The unaudited pro forma consolidated financial statements are not intended to be indicative of the actual financial position or results of operations that would have been achieved had the transaction been consummated as of the periods indicated above, nor does it purport to indicate results which may be attained in the future. Actual amounts could differ materially from these estimates.
The unaudited pro forma condensed consolidated balance sheet as of April 3, 2021 and the unaudited pro forma condensed consolidated statements of operations for the years ended December 31, 2020, December 31, 2019, and December 31, 2018 should be read in conjunction with the notes thereto.
Perrigo Company PLC
Pro Forma Condensed Consolidated Balance Sheet
As of April 3, 2021
(Unaudited)
| Transaction Accounting Adjustments | ||||||||||||||||||||
| (in millions, except per share amounts) | Historical (a) |
Discontinued Operations of the RX Business (c) |
Pro Forma (d) |
Notes | Pro Forma |
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| Assets |
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| Cash and cash equivalents |
$ | 470.9 | $ | — | $ | 1,420.8 | (i | ) | $ | 1,891.7 | ||||||||||
| Accounts receivable, net of allowance for credit losses of $9.1 and $6.5, respectively |
641.0 | — | 641.0 | |||||||||||||||||
| Inventories |
1,136.1 | — | 1,136.1 | |||||||||||||||||
| Prepaid expenses and other current assets |
251.5 | — | 251.5 | |||||||||||||||||
| Current assets held for sale |
1,989.1 | (1,989.1 | ) | — | ||||||||||||||||
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| Total current assets |
4,488.6 | (1,989.1 | ) | 1,420.8 | 3,920.3 | |||||||||||||||
| Property, plant and equipment, net |
860.0 | — | 860.0 | |||||||||||||||||
| Operating lease assets |
149.7 | — | 149.7 | |||||||||||||||||
| Goodwill and indefinite-lived intangible assets |
3,059.3 | — | 3,059.3 | |||||||||||||||||
| Definite-lived intangible assets, net |
2,366.3 | — | 2,366.3 | |||||||||||||||||
| Deferred income taxes |
57.3 | — | 57.3 | |||||||||||||||||
| Non-current assets held for sale |
— | — | — | |||||||||||||||||
| Other non-current assets |
343.6 | — | 343.6 | |||||||||||||||||
| Total non-current assets |
6,836.2 | — | — | 6,836.2 | ||||||||||||||||
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| Total assets |
$ | 11,324.8 | $ | (1,989.1 | ) | $ | 1,420.8 | $ | 10,756.5 | |||||||||||
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| Liabilities and Shareholders’ Equity |
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| Accounts payable |
$ | 430.3 | $ | — | $ | $ | 430.3 | |||||||||||||
| Payroll and related taxes |
110.9 | — | 110.9 | |||||||||||||||||
| Accrued customer programs |
134.5 | — | 134.5 | |||||||||||||||||
| Other accrued liabilities |
267.9 | — | 267.9 | |||||||||||||||||
| Accrued income taxes |
17.4 | — | 17.4 | |||||||||||||||||
| Current indebtedness |
35.8 | — | 35.8 | |||||||||||||||||
| Current liabilities held for sale |
450.0 | (450.0 | ) | — | ||||||||||||||||
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| Total current liabilities |
1,446.8 | (450.0 | ) | — | 996.8 | |||||||||||||||
| Long-term debt, less current portion |
3,525.3 | — | 3,525.3 | |||||||||||||||||
| Deferred income taxes |
261.4 | — | 261.4 | |||||||||||||||||
| Non-current liabilities held for sale |
— | — | — | |||||||||||||||||
| Other non-current liabilities |
533.3 | — | 533.3 | |||||||||||||||||
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| Total non-current liabilities |
4,320.0 | — | — | 4,320.0 | ||||||||||||||||
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| Total liabilities |
5,766.8 | (450.0 | ) | — | 5,316.8 | |||||||||||||||
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| Commitments and contingencies |
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| Shareholders’ equity |
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| Controlling interests: |
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| Preferred shares, $0.0001 par value per share, 10 shares authorized |
— | — | — | |||||||||||||||||
| Ordinary shares, €0.001 par value per share, 10,000 shares authorized |
7,101.3 | — | 7,101.3 | |||||||||||||||||
| Accumulated other comprehensive income |
276.7 | — | 276.7 | |||||||||||||||||
| Retained earnings (accumulated deficit) |
(1,820.0 | ) | (1,539.1 | ) | 1,420.8 | (i | ) | (1,938.3 | ) | |||||||||||
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| Total shareholders’ equity |
5,558.0 | (1,539.1 | ) | 1,420.8 | 5,439.7 | |||||||||||||||
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| Total liabilities and shareholders’ equity |
$ | 11,324.8 | $ | (1,989.1 | ) | $ | 1,420.8 | $ | 10,756.5 | |||||||||||
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See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
Perrigo Company PLC
Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2020
(Unaudited)
| Transaction Accounting Adjustments | ||||||||||||||||||||
| (in millions, except per share amounts) | Historical (b) |
Discontinued (c) |
Pro Forma (d) |
Notes | Pro Forma |
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| Net sales |
$ | 5,063.3 | $ | (975.1 | ) | $ | $ | 4,088.2 | ||||||||||||
| Cost of sales |
3,248.1 | (645.1 | ) | 2,603.0 | ||||||||||||||||
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| Gross profit |
1,815.2 | (330.0 | ) | — | 1,485.2 | |||||||||||||||
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| Operating expenses |
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| Distribution |
100.4 | (15.2 | ) | 85.2 | ||||||||||||||||
| Research and development |
177.7 | (54.8 | ) | 122.9 | ||||||||||||||||
| Selling |
579.1 | (30.1 | ) | 549.0 | ||||||||||||||||
| Administration |
496.0 | (31.8 | ) | 464.2 | ||||||||||||||||
| Impairment charges |
346.8 | (346.8 | ) | 0.0 | ||||||||||||||||
| Restructuring |
3.5 | (0.3 | ) | 3.2 | ||||||||||||||||
| Other operating expense (income) |
(3.7 | ) | (0.7 | ) | (4.4 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
1,699.8 | (479.7 | ) | — | 1,220.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating income |
115.4 | 149.7 | 265.1 | |||||||||||||||||
| Change in financial assets |
96.4 | — | 96.4 | |||||||||||||||||
| Interest expense, net |
131.2 | — | 131.2 | |||||||||||||||||
| Other (income) expense, net |
17.2 | (5.5 | ) | 11.7 | ||||||||||||||||
| Loss on extinguishment of debt |
20.0 | — | 20.0 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income (loss) before income taxes |
(149.4 | ) | 155.2 | — | 5.8 | |||||||||||||||
| Income tax expense (benefit) |
13.2 | (48.2 | ) | (35.0 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
$ | (162.6 | ) | $ | 203.4 | $ | $ | 40.8 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings (loss) per share |
||||||||||||||||||||
| Basic |
$ | (1.19 | ) | $ | 0.30 | |||||||||||||||
| Diluted |
$ | (1.19 | ) | $ | 0.30 | |||||||||||||||
| Weighted-average shares outstanding |
|
|||||||||||||||||||
| Basic |
136.1 | |||||||||||||||||||
| Diluted |
136.1 | |||||||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
| Perrigo Company PLC Pro Forma Condensed Consolidated Statement of Operations For the year ended December 31, 2019 (Unaudited)
|
||||||||||||||||||||
| Transaction Accounting Adjustments | ||||||||||||||||||||
| (in millions, except per share amounts) | Historical (b) |
Discontinued Operations of (c) |
Pro Forma (d) |
Notes | Pro Forma |
|||||||||||||||
| Net sales |
$ | 4,837.4 | $ | (967.5 | ) | $ | $ | 3,869.9 | ||||||||||||
| Cost of sales |
3,064.1 | (619.6 | ) | 2,444.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross profit |
1,773.3 | (347.9 | ) | 1,425.4 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating expenses |
||||||||||||||||||||
| Distribution |
96.1 | (14.1 | ) | 82.0 | ||||||||||||||||
| Research and development |
187.4 | (67.3 | ) | 120.1 | ||||||||||||||||
| Selling |
567.0 | (25.1 | ) | 541.9 | ||||||||||||||||
| Administration |
503.0 | (39.2 | ) | 463.8 | ||||||||||||||||
| Impairment charges |
184.5 | (170.7 | ) | 13.8 | ||||||||||||||||
| Restructuring |
26.3 | (0.3 | ) | 26.0 | ||||||||||||||||
| Other operating expense (income) |
4.2 | (1.3 | ) | 2.9 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
1,568.5 | (318.0 | ) | 1,250.5 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating income |
204.8 | (29.9 | ) | — | 174.9 | |||||||||||||||
| Change in financial assets |
(22.1 | ) | — | (22.1 | ) | |||||||||||||||
| Interest expense, net |
121.7 | — | 121.7 | |||||||||||||||||
| Other (income) expense, net |
(66.0 | ) | (7.1 | ) | (73.1 | ) | ||||||||||||||
| Loss on extinguishment of debt |
0.2 | — | 0.2 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income (loss) before income taxes |
171.0 | (22.8 | ) | — | 148.2 | |||||||||||||||
| Income tax expense (benefit) |
24.9 | (33.6 | ) | (8.7 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
$ | 146.1 | $ | 10.8 | $ | $ | 156.9 | |||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings (loss) per share |
||||||||||||||||||||
| Basic |
$ | 1.07 | $ | 1.15 | ||||||||||||||||
| Diluted |
$ | 1.07 | $ | 1.15 | ||||||||||||||||
| Weighted-average shares outstanding |
| |||||||||||||||||||
| Basic |
136.0 | |||||||||||||||||||
| Diluted |
136.5 | |||||||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
Perrigo Company PLC
Pro Forma Condensed Consolidated Statement of Operations
For the year ended December 31, 2018
(Unaudited)
| Transaction Accounting Adjustments | ||||||||||||||||||||
| (in millions, except per share amounts) | Historical (b) |
Discontinued Operations of the RX Business (c) |
Pro Forma Adjustments (d) |
Notes | Pro Forma |
|||||||||||||||
| Net sales |
$ | 4,731.7 | $ | (920.8 | ) | $ | $ | 3,810.9 | ||||||||||||
| Cost of sales |
2,900.2 | (533.9 | ) | 2,366.3 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Gross profit |
1,831.5 | (386.9 | ) | — | 1,444.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating expenses |
||||||||||||||||||||
| Distribution |
94.2 | (15.1 | ) | 79.1 | ||||||||||||||||
| Research and development |
218.6 | (62.5 | ) | 156.1 | ||||||||||||||||
| Selling |
595.7 | (26.3 | ) | 569.4 | ||||||||||||||||
| Administration |
435.9 | (33.9 | ) | 402.0 | ||||||||||||||||
| Impairment charges |
224.4 | — | 224.4 | |||||||||||||||||
| Restructuring |
21.0 | — | 21.0 | |||||||||||||||||
| Other operating expense (income) |
5.2 | (6.6 | ) | (1.4 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total operating expenses |
1,595.0 | (144.4 | ) | — | 1,450.6 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Operating income |
236.5 | (242.5 | ) | — | (6.0 | ) | ||||||||||||||
| Change in financial assets |
(188.7 | ) | — | (188.7 | ) | |||||||||||||||
| Interest expense, net |
128.0 | — | 128.0 | |||||||||||||||||
| Other (income) expense, net |
6.1 | (4.1 | ) | 2.0 | ||||||||||||||||
| Loss on extinguishment of debt |
0.5 | — | 0.5 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Income (loss) before income taxes |
290.6 | (238.4 | ) | — | 52.2 | |||||||||||||||
| Income tax expense (benefit) |
159.6 | (67.0 | ) | 92.6 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Net income (loss) |
$ | 131.0 | (171.4 | ) | $ | — | $ | (40.4 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||
| Earnings (loss) per share |
||||||||||||||||||||
| Basic |
$ | 0.95 | $ | (0.29 | ) | |||||||||||||||
| Diluted |
$ | 0.95 | $ | (0.29 | ) | |||||||||||||||
| Weighted-average shares outstanding |
|
|||||||||||||||||||
| Basic |
137.8 | |||||||||||||||||||
| Diluted |
138.3 | |||||||||||||||||||
See accompanying Notes to Pro Forma Condensed Consolidated Financial Statements.
Perrigo Company PLC
Notes to Pro forma Condensed Consolidated Financial Statements
(Unaudited)
On July 6 , 2021 Perrigo Company plc (“Perrigo” or “the Company”) completed the previously announced divestiture of its generic RX Pharmaceuticals business (RX Business”) to Altaris Capital Partners, LLC (“Altaris” or the “Buyer”), pursuant to the terms of the Stock and Asset Purchase Agreement (the “Purchase Agreement”) entered into on March 1, 2021. Pursuant to the Purchase Agreement, Altaris acquired the RX Business for total consideration of $1.55 billion in cash, which included an adjustment to increase cash consideration by $53.3 million for the resolution of contingent purchase obligations resulting from the acquisition of a generic topical lotion ANDA on March 8, 2021.
The unaudited pro forma condensed consolidated financial statements reflect the following transaction accounting adjustments:
| a) | Reflects Perrigo’s consolidated balance sheet as of April 3, 2021 reported in our Form 10-Q filed with the SEC on May 12, 2021. |
| b) | Reflects Perrigo’s consolidated statements of operations for the years ended December 31, 2020, December 31, 2019, and December 31, 2018, as reported in our Form 10-K filed on March 1, 2021. |
| c) | Reflects the sale of the assets and liabilities of the RX Business pursuant to the Purchase Agreement presented on a discontinued operations basis in accordance with ASC 205, Discontinued Operations. |
| i) | Perrigo’s management believes that the adjustments included within the Discontinued Operations of the RX Business column of the unaudited pro forma condensed consolidated financial statements are consistent with the guidance for discontinued operations in accordance with U.S. GAAP. The Company’s current estimates on the discontinued operations basis are preliminary and could change as the Company finalizes the accounting for the discontinued operations to be reported in its Annual Report on Form 10-K for the year ended December 31, 2021. |
| ii) | The tax impacts have been estimated using the applicable statutory income tax rates in the respective jurisdictions. The estimated income tax adjustments are subject to change and actual amounts may differ from the results reflected herein. |
| d) | Represents the estimated cash proceeds received, including purchase price adjustments and net of transaction costs and taxes related to the gain on the transaction. The cash proceeds are intended to be retained by Perrigo for growth and general corporate purposes. |
| i) | To record the estimated net cash proceeds from the transaction of $1.55 billion subject to certain adjustments for the working capital of the RX business at the completion of the sale, less (a) estimated transaction costs of $25.4 million that are likely to be incurred as part of the consummation of the transaction in 2021 and (b) the expected tax effects of the estimated federal and state income taxes paid of $107.1 million related to the gain on the transaction. The estimated expected tax effects are calculated based on the amount of taxable gain considering the use of historical net operating losses in place to reduce taxable income, using the applicable statutory income tax rates in the respective jurisdictions. The estimates, including the jurisdictional income tax effects, are subject to change and actual amounts may differ from the results reflected herein. The estimated gain on sale has been excluded from the pro forma information as this amount pertains to discontinued operations and does not reflect the impact on income from continuing operations. |
Document and Entity Information |
Jul. 06, 2021 |
|---|---|
| Cover [Abstract] | |
| Entity Registrant Name | PERRIGO Co plc |
| Entity Tax Identification Number | 00-0000000 |
| Amendment Flag | false |
| Entity Central Index Key | 0001585364 |
| Document Type | 8-K |
| Document Period End Date | Jul. 06, 2021 |
| Entity File Number | 001-36353 |
| Entity Incorporation State Country Code | L2 |
| Entity Address, Address Line One | The Sharp Building |
| Entity Address, Address Line Two | Hogan Place |
| Entity Address, City or Town | Dublin 2 |
| Entity Address, Country | IE |
| Entity Address, Postal Zip Code | D02 TY74 |
| City Area Code | +353 1 |
| Local Phone Number | 7094000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Security 12b Title | Ordinary shares |
| Trading Symbol | PRGO |
| Security Exchange Name | NYSE |
| Entity Emerging Growth Company | false |
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