Perrigo

Perrigo Company plc is an Irish–registered manufacturer of private label over-the-counter pharmaceuticals, and while 70% of Perrigo's net sales are from the U.S. healthcare system, Perrigo is legally headquartered in Ireland for tax purposes, which accounts for 0.60% of net sales.[2] In 2013, Perrigo completed the 6th-largest U.S. corporate tax inversion in history when it reregistered its tax status to Ireland to avoid U.S. corporate taxes.[3]

Perrigo Company plc
public liability company
Traded asNYSE: PRGO
TASE: PRGO
S&P 500 Component
ISINIE00BGH1M568
IndustryPharmaceutical
PredecessorPerrigo Inc. (before the 2013 tax inversion to Ireland)
Founded1887 (1887)
Headquarters
Key people
Murray S. Kessler, President and CEO, Board Member
ProductsOTC, RX, API, Medical Diagnostic, pharmaceuticals
Revenue US$3.540 billion (2013)[1]
US$805 million(2013)
US$ 530 million (2013)
Number of employees
10,220 (May 2015)
Subsidiaries
Websiteperrigo.com

Perrigo engages in the acquisition (for repricing), manufacture, and sale of consumer healthcare products, generic prescription drugs, and active pharmaceutical ingredients (APIs), primarily in the United States, from its base in Ireland. On 21 December 2018, Perrigo suffered its biggest one-day share price fall in its history after the Irish Revenue Commissioners issued a tax claim against Perrigo that equated to half of its market value.[4][5]

History
See also: Corporation tax in the Republic of Ireland § Corporate tax inversions

L. Perrigo Company was founded in 1887 in Allegan, Michigan, by Luther and Charles Perrigo, who ran a general store.[6]

In 1991 Perrigo had an initial public offering on NASDAQ.

In March 2005 the firm acquired Agis Industries Limited (TASE:AGIS), an Israel-based generic pharmaceuticals company in an $850 million transaction. Agis was founded in 1983 by Mori Arkin who developed his father's small drug import business into a multinational generic pharmaceutical company. As a result of the acquisition, Arkin owned 9% of Perrigo, and was appointed as Vice Chairman of the company.[7]

In July 2013, Perrigo announced that it would execute a corporate tax inversion to Ireland in order to avoid U.S. corporate taxes, via an $8.6 billion acquisition of Irish-based Elan Corporation.[8] As of November 2018, Perrigo is the 6th-largest U.S. tax inversion in history.[9][10][3] Over 70% of Perrigo's sales, and an even greater percentage of Perrigo profits, are from the U.S. healthcare system.[11][2]

In April 2015, Perrigo received an unsolicited buy-out offer from Mylan of $29 billion, which was ultimately rejected by management and shareholders.[12] In May 2016, Perrigo investors sued the company over statements made during the Mylan bid,[13] which were said to have persuaded shareholders to vote against the deal.[14][15] In the months prior to this suit, the company's chairman and CEO, Joseph Papa, who has been credited with "fending off" Mylan's bid, left to take the CEO role at Valeant.[16][17] Upon Papa's departure, John Hendrickson, who was at the time the company's president, took on the additional roles of chairman and CEO.[18][19] Hendrickson was succeeded by Uwe Roehrhoff in January, 2018.[20] Murray S. Kessler is the current President and CEO.[21]

On 20 December 2018, the Financial Times reported that the Irish Revenue Commissioners levied a €1.64 billion (not including penalties and interest) Irish tax claim on Perrigo for unpaid capital gains tax (CGT) from the 2013 sale of Tysabri to Biogen by Elan, which happened months before Perrigo's acquisition of Elan.[22] The claim is the second largest ever issued by the Revenue Commissioners in Irish history, after Apple's €13 billion Irish tax fine.[22] On 21 December 2018, the Irish Times reported that Revenue claimed Perrigo owed CGT at a rate of 33% as an "asset sale", however Perrigo claimed that the sale was part of Elan's normal "trading income", and was subject to the lower 12.5% Irish corporate tax rate, which Perrigo was able to reduce to 0% using Ireland's multinational tax BEPS tools.[23]

Acquisitions

On 9 January 2008, the firm acquired Galpharm Healthcare, Ltd., a supplier of over-the-counter store brand pharmaceuticals in the United Kingdom.[24] On 16 September 2008, the firm acquired J.B. Laboratories.[25] On 6 October 2008, it acquired Laboratorios Diba S.A., enabling the company to market its products in Mexico.[26] On 13 November 2008, it acquired Unico Holdings, a manufacturer of store brand pediatric electrolytes, enemas and feminine hygiene products for retail consumers in the U.S.[27]

On 1 March 2010, the firm acquired Orion Laboratories Pty, Ltd., a supplier of over-the-counter (OTC) store brand pharmaceutical products in Australia and New Zealand.[28] On 23 March 2010, it acquired PBM Holdings, Inc., a producer of over-the-counter store brand infant formula and baby foods in the United States, Canada, Mexico and China.[29]

On 20 January 2011, the firm announced that it would acquire Paddock Laboratories Inc., with the deal expected to close in fiscal 2012.[30]

In September 2012, Perrigo announced its intention to enter the animal wellness category by acquiring the assets of Sergeant's Pet Care Products, Inc., a privately held manufacturer of over-the-counter companion animal healthcare products.[31]

On 11 February 2013, Perrigo announced the completion of the acquisition of Rosemont Pharmaceuticals Ltd., a specialty and generic prescription pharmaceutical company focused on the manufacturing and marketing of oral liquid formulations.[32]

On 29 July 2013, the firm announced that it would acquire Élan, a pharmaceutical firm based in Dublin.[33][34] The Élan acquisition enabled Perrigo to reincorporate as an Irish company using Élan's headquarters (although the executive offices remained in Allegan), lowering its effective tax rate (called a tax inversion).[35]

In November 2014, Perrigo announced it had agreed to buy Belgian health-products provider Omega Pharma approximately $4.5 billion (€3.6 billion).[36][37] The transaction was completed in March 2015.[38]

In August 2016, the company announced it would acquire US national distributor of over-the-counter medicines, Geiss, Destin & Dunn[39]

In May 2019, Perrigo announced it would acquire Ranir Global Holdings LLC, boosting its oral self-care offering, with the transaction valued at $750 million.[40]

In February 2020, announced that it has reached an agreement to acquire the oral care assets of High Ridge Brands for $113 million.[41][42][43]

Acquisition history

The following is an illustration of the company's major mergers and acquisitions and historical predecessors:

 
Perrigo
 

Geiss, Proteon Therapeutics
(Acq 2016)

 
 
 

Geiss, Destin & Dunn
(Acq 2016)

 
 
 

Omega Pharma
(Acq 2015)

 
 
 

Élan
(Acq 2013)

 
 
 

Rosemont Pharmaceuticals Ltd
(Acq 2013)

 
 
 

Sergeant's Pet Care Products Inc
(Acq 2012)

 
 
 

Paddock Laboratories Inc
(Acq 2011)

 
 
 

PBM Holdings Inc
(Acq 2010)

 
 
 

Orion Laboratories Pty Ltd
(Acq 2010)

 
 
 

Unico Holdings
(Acq 2008)

 
 
 

Laboratorios Diba S.A.
(Acq 2008)

 
 
 

J.B. Laboratories
(Acq 2008)

 
 
 

Galpharm International
(Acq 2008)

 
 
 

Agis Industries Ltd
(Acq 2005)

 
 
 

L. Perrigo Company
(Founded 1887)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Segments

The company operates in three segments; Consumer Self-care Americas, Rx Pharmaceuticals, and Consumer Self-Care International. The Consumer Self-care Americas segment produces over-the-counter pharmaceutical and nutritional products in the United States, the United Kingdom, and Mexico. This segment offers analgesic, cough/cold/allergy/sinus, gastrointestinal, smoking cessation, first aid, antacids, hemorrhoidal remedies, motion sickness, sleep aid products, feminine hygiene products, vitamin, and nutritional supplement products.

The Rx Pharmaceuticals segment produces generic prescription drugs in the United States. This segment provides creams, ointments, lotions, gels, and solutions, as well as nasal sprays, foams, and transdermal devices. Believing that Rx business has the potential to realize greater value outside of Perrigo, board okays separation of prescription pharma business on 9 August 2018.[44]

The Consumer Self-Care International (CSCI) segment develops, manufactures, markets, and distributes well-known European self-care brands in the natural health and vitamins, cough, cold and allergy, oral care, smoking cessation, personal care and derma-therapeutics and lifestyle categories.

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See also

References
  1. Jones, Al (16 August 2011). "Perrigo Co. reports strong gains in sales and earnings for fourth quarter and full year". Mlive.com. Allegan. Kalamazoo Gazette. Retrieved 20 August 2011. Sales for the full year were $2.75 billion, up about 21.5 percent from $2.26 billion in fiscal 2010.
  2. Perrigo Co plc: Form 10-Q (29 September 2018). Securities and Exchange Commission. 8 November 2018. p. 9. Disaggregation of Revenue
  3. "Tracking Tax Runaways". Bloomberg News. 1 March 2017. Bloomberg Special Reports: Corporate Tax Inversions
  4. Cantillion (21 December 2018). "The terrible irony of Perrigo's tax planning". Irish Times.
  5. Charly Grant (21 December 2018). "Perrigo Tax Shocker Couldn't Come at Worse Time". Wall Street Journal.
  6. "Perrigo Company - Company History", Funding Universe, retrieved 31 October 2009
  7. "Perrigo Company to Acquire Agis Industries, Creating A Leading Diversified Healthcare Company" (PDF) (Press release). Company press release. Archived from the original (PDF) on 25 October 2006. Retrieved 31 October 2009.
  8. "UPDATE 4-U.S. drugmaker Perrigo to buy Ireland's Elan for $8.6 bln". Reuters. 29 July 2013. DUBLIN, July 29, 2013 (Reuters) - U.S. drugmaker Perrigo agreed to buy Elan for $8.6 billion in a deal that will hand it tax savings from being domiciled in Ireland and royalties from a blockbuster multiple sclerosis treatment.
  9. Emily Stewart (22 July 2017). "As Treasury Moves to Bring Back Inversions, Here are 7 of the Biggest Recent Deals". TheStreet.
  10. Danielle Douglas-Gabriel (6 August 2014). "These are the companies abandoning the U.S. to dodge taxes". The Washington Post.
  11. Janet Novack (10 September 2014). "The Tax Inversion Rush: One Handy Graphic". Forbes Magazine. The U.S. company is in black, as is the share of the merged company its current shareholders will own; it must be less than 80% for the tax trick to work under the current law.
  12. "Generic drugmaker Mylan offers $29 billion for Perrigo" (Press release). Reuters. 8 April 2015.
  13. "Investor Sues Perrigo Over Disclosures in Mylan Hostile Bid".
  14. "Lawsuit filed against former Mylan acquisition target Perrigo - Pittsburgh Business Times".
  15. "Perrigo Investor Slams Co. Over Mylan's Failed Takeover - Law360".
  16. Lopez, Linette (28 April 2016). "Now we know why Valeant's new CEO took the job, and it seems politicians are upset about it". Business Insider UK. Retrieved 13 March 2018.
  17. Wright, Rob (9 January 2018). "Can Joseph Papa Save Valeant?". Life Science Leader. Retrieved 13 March 2018.
  18. Helfand, Carley (6 June 2017). "Floundering Perrigo's CEO Hendrickson to depart after rocky 13-month tenure". FiercePharma. Retrieved 13 March 2018.
  19. "Valeant: Joseph Papa Joins Pharmaceutical Company As Chief Exec As Perrigo Names Hendrickson New CEO". International Business Times. 25 April 2016. Retrieved 13 March 2018.
  20. "Perrigo hires Gerresheimer ex-boss Rohrhoff as new CEO". 8 January 2018 – via www.reuters.com.
  21. "Press Releases". Perrigo InvestorRoom.
  22. Authur Beesley (20 December 2018). "Drugs group Perrigo hit with €1.64bn Irish back tax bill". Financial Times. The tax assessment is Ireland’s largest since the European Commission directed Apple to pay €14.3bn in disputed back taxes to Dublin in a record-breaking ruling that the Irish authorities have taken to the European courts for an appeal.
  23. Cliff Taylor (21 December 2018). "What's the massive Perrigo tax bill all about?". Irish Times. A twist is that Elan used accumulated losses to avoid paying any up-front tax bill at the time on the initial payment from Biogen.
  24. "Archived copy" (PDF). Archived from the original (PDF) on 9 October 2011. Retrieved 5 July 2011.CS1 maint: archived copy as title (link)
  25. "Official Perrigo Company Press Release" (PDF). Archived from the original (PDF) on 29 November 2010. Retrieved 13 March 2012.
  26. "Official Perrigo Company Press Release" (PDF). Archived from the original (PDF) on 14 March 2012. Retrieved 13 March 2012.
  27. "Archived copy" (PDF). Archived from the original (PDF) on 23 June 2011. Retrieved 5 July 2011.CS1 maint: archived copy as title (link)
  28. "Archived copy" (PDF). Archived from the original (PDF) on 15 July 2011. Retrieved 5 July 2011.CS1 maint: archived copy as title (link)
  29. "Archived copy" (PDF). Archived from the original (PDF) on 23 June 2011. Retrieved 5 July 2011.CS1 maint: archived copy as title (link)
  30. "Archived copy" (PDF). Archived from the original (PDF) on 26 June 2011. Retrieved 5 July 2011.CS1 maint: archived copy as title (link)
  31. "Perrigo Closes Acquisition Of Sergeant's Pet Care Products". Perrigo Company.
  32. "Perrigo Company Acquires U.K.-based Rosemont Pharmaceuticals Ltd. For Approximately £180 Million Or $283 Million".
  33. Reuters (29 July 2013). "US-Generikakonzern: Perrigo kauft irische Pharmafirma Elan". handelsblatt.com.
  34. "This page has been removed - News - The Guardian". the Guardian.
  35. Pogatchnik, Shawn (29 July 2013). "Perrigo to buy Elan, reincorporate in Ireland". Boston Globe. Retrieved 20 January 2015.
  36. Risser, David (6 November 2014). "Perrigo to Buy Omega Pharma of Belgium for $4.5 Billion". Bloomberg.
  37. "Belgian newspaper De standaard reports Perrigo to Buy Omega Pharma for €3.6 Billion". De Standaard. 6 November 2014.
  38. "Perrigo Company plc Completes Acquisition Of Omega Pharma Invest N.V., Creating A Top Five Global OTC Company". PR Newswire Association LLC. PR Newswire. 30 March 2015. Retrieved 1 July 2015.
  39. "Struggling Perrigo inks deal agreement for GA-based distributor - FiercePharma".
  40. "Perrigo To Expand Into Adjacent Self-Care Category By Acquiring Ranir Global Holdings LLC, The Leading Global Private Label Supplier Of Oral Self-Care Products". BioSpace.
  41. "Perrigo To Acquire Oral Care Assets Of High Ridge Brands". BioSpace. Retrieved 25 February 2020.
  42. "BRIEF-Perrigo To Acquire Oral Care Assets Of High Ridge Brands". Reuters. 24 February 2020. Retrieved 19 March 2020.
  43. "Perrigo to acquire oral care assets of High Ridge Brands for $113M". www.spglobal.com. Retrieved 19 March 2020.
  44. Editorial, Reuters. "Perrigo board okays separation of prescription pharma business". U.S. Retrieved 9 August 2018.
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