Adams Respiratory to be acquired for $2.3 billion

NEW YORK (MarketWatch) – Drug maker Adams Respiratory Therapeutics Inc., maker of Mucinex, said Monday it would be acquired by Reckitt Benckiser Group for $2.3 billion, as the household-products company seeks to broaden its footprint in consumer healthcare.

Under the terms of the deal, London-based Reckitt Benckiser (RB) will pay $60 a share in cash for Adams. The offer is a 37% premium to Adams’ Friday closing price of $43.68 a share.

Adams shares jumped 35% to $59.10 in midday trading.

Adams, whose products are focused on treating respiratory conditions, currently has the over-the-counter cough expectorant Mucinex and cough suppressant Delsym on the market. Mucinex represents most of Adams’ sales.

Reckitt Benckiser makes a wide variety of well-known household brands include Lysol, Airwick, Veet and Woolite. The company also has a portfolio of popular European healthcare treatments, such as the sore throat product Strepsils, the analgesic Nurofen, and acne treatment Clearasil.

“The acquisition of Adams Respiratory Therapeutics is another step forward in Reckitt Benckiser’s growth strategy in consumer health care,” adding the cough and congestion reliever Mucinex and giving the company entry into the U.S. health-care market, said Bart Becht, chief executive of Reckitt Benckiser, in a statement.

Both companies’ boards have approved the terms. The acquisition remains subject to conditions including antitrust clearance.

Reckitt Benckiser’s board was advised by Merrill Lynch while Morgan Stanley served as financial adviser to Adams.

Adams’ net sales have grown to $332 million for the fiscal year ended June 2007 from $14 million in the year ended June 2003. A key driver of the company’s growth has been, Mucinex, also known as guaifenesin, which was approved by the U.S. Food and Drug Administration in 2002 for the treatment of chest congestion.

Adams has a manufacturing facility in Fort Worth, Texas, to produce adult Mucinex. Delsym is produced for Adams under a manufacturing supply agreement.

Reckitt expects a one-off charge of $60 million for the cost of integrating and restructuring Adams and further restructuring of the enlarged company.

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