Teva acquires Mexican company Rimsa for $2.3b

TEVA has bought Mexican drug manufacturer Representaciones e Investigaciones Médicas SA (RIMSA) for $2.3bn.

The acquisition also brings a portfolio of products and companies, intellectual property, assets and pharmaceutical patents in Latin America and Europe. “This procurement conveys on our strategy of expanding our vicinity in key developing markets with a specific end goal to position Teva pharm for long haul development in these markets”, said Erez Vigodman, Chief Executive.

Rimsa had revenue of $227 million in 2014, with annual growth per year of 10.6 percent.

“We will build on their brand reputation, successful sales force model, well-established commercial footprint and loyal customer base to introduce additional specialty and generic Teva medicines to patients in Mexico and across the region”, Siggi Olafsson, CEO of Teva’s generics unit, said in a statement. In late July it agreed to pay $40.5 billion in cash and stock for Allergan’s generics drug business to solidify its position as the world’s No. 1 maker of generic drugs.

This is the second large acquisition that Teva has made in recent months.

Beefing up in emerging markets-and generics, Teva’s legacy business-has been high on the list of priorities for Vigodman since he took the helm at Teva early past year.

“(Rimsa) gives Teva an abundantly required stage to propel its own particular portfolio into the extensive and developing forte market.

Several companies have been pursuing acquisition agreements in the Latin American markets – factors like an aging population, growing middle class, easier access to medical products as well as initiatives undertaken by governments to promote the use of cheaper generic medicines are expected to drive growth in these markets. “We view this as a great deal for Teva from a strategic standpoint”, said Nomura analyst Shibani Malhotra.

The deal, funded with cash on hand and lines of credit, should close in Q1.