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Report No. : |
322969 |
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Report Date : |
22.05.2015 |
IDENTIFICATION DETAILS
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Name : |
PERRIGO API LTD. |
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Registered Office : |
P.O. Box 2231
(5112102), 31 Lehi Street, Industrial
Zone, Bnei Brak 5120052 |
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Country : |
Israel |
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Financials (as on) : |
28.06.2014 |
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Date of Incorporation : |
21.08.1986 |
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Com. Reg. No.: |
51-113965-1 |
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Legal Form : |
Private Limited Company |
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Line of Business : |
Subject is developers, manufacturers, exporters and marketers of
active pharmaceutical ingredient (API), |
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No. of Employee : |
500 |
RATING & COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Status : |
Good |
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Payment Behaviour : |
No complaints |
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Litigation : |
Clear |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – December 31, 2014
|
Country Name |
Previous Rating (30.09.2014) |
Current Rating (31.12.2014) |
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Israel |
B1 |
B1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
ISRAEL - ECONOMIC OVERVIEW
Israel has a technologically advanced market economy. Cut diamonds, high-technology equipment, and pharmaceuticals are among the leading exports. Its major imports include crude oil, grains, raw materials, and military equipment. Israel usually posts sizable trade deficits, which are covered by tourism and other service exports, as well as significant foreign investment inflows. Between 2004 and 2013, growth averaged nearly 5% per year, led by exports. The global financial crisis of 2008-09 spurred a brief recession in Israel, but the country entered the crisis with solid fundamentals, following years of prudent fiscal policy and a resilient banking sector. Israel's economy also has weathered the Arab Spring because strong trade ties outside the Middle East have insulated the economy from spillover effects. Slowing demand domestically and internationally and reduced investment due to uncertainties caused by the Gaza conflict in summer 2014 have reduced GDP growth to about 2% during 2014. Natural gas fields discovered off Israel's coast since 2009 have brightened Israel's energy security outlook. The Tamar and Leviathan fields were some of the world's largest offshore natural gas finds this past decade. The massive Leviathan field is expected to come online no sooner than 2017, but production from Tamar provided a one percentage point boost to Israel's GDP in 2013 and a 0.5% boost in 2014. In mid-2011, public protests arose around income inequality and rising housing and commodity prices. Israel's income inequality and poverty rates are among the highest of OECD countries and there is a broad perception among the public that a small number of "tycoons" have a cartel-like grip over the major parts of the economy. The government formed committees and has started splitting up the oligopolies to address some of the grievances but has maintained that it will not engage in deficit spending to satisfy populist demands. Over the long term, Israel faces structural issues, including low labor participation rates for its fastest growing social segments - the ultra-orthodox and Arab-Israeli communities. Also, Israel's progressive, globally competitive, knowledge-based technology sector employs only 9% of the workforce, with the rest employed in manufacturing and services - sectors which face downward wage pressures from global competition.
|
Source
: CIA |
PERRIGO API LTD.
(Also known as CHEMAGIS)
Telephone 972 3 577 36 09;
577 38 80; 636 92 22
Fax 972 3 577 38 23
P.O. Box 2231 (5112102)
31 Lehi Street
Industrial Zone
Bnei Brak
5120052, ISRAEL
A private limited
company, incorporated as per file No. 51-113965-1 on the 21.08.1986.
Originally registered
under the name CHEMAGIS LTD., which changed to the present name on the
08.08.2013.
Authorized share
capital NIS 55,000,000.00, divided into –
55,000,000
ordinary shares of NIS 1.00 each, of which 42,961,680 shares amounting to NIS
42,961,680.00 were issued.
Subject is fully
owned by PERRIGO ISRAEL PHARMACEUTICALS LTD., a wholly-owned subsidiary of
PERRIGO COMPANY PLC., of Ireland, a public limited company, whose shares are
traded on the New York Stock Exchange (PRGO) and the Tel Aviv Stock Exchange
(TASE).
Note: following the
acquisition of ELAN in December 2013 (in cash and share swap), PERRIGO COMPANY
PLC took over all activities of PERRIGO COMPANY INC. (including being traded on
a/m stock exchange).
1. Joseph C. Papa, CEO of
PERRIGO CO.,
2. Ms. Judy L. Brown, Executive
V.P. and CFO of PERRIGO CO.,
3. Sharon Kochan, Executive V.P.
and General Manager, International of PERRIGO CO.
Yoav Greenberg.
Developers, manufacturers,
exporters and marketers of Active Pharmaceutical Ingredient (API), for the
generic pharmaceutical industry.
Over 90% of sales
are for export.
Sales are to
generic and branded pharmaceutical companies worldwide, including to affiliate
PERRIGO manufacturers.
Among local
suppliers: LUXEMBURG INDUSTRIES, MARLOV, YES PHARMA, TAGAD CHEMICALS, SMADAR
TECHNOLOGIES, HOLLAND-MORAN, SIGMA – ALDRICH, TECHNO BEARING TOOLS B.S., BIO
PHARMAX GROUP, etc.
Operating from
main offices in 31 Lehi Street, Industrial Zone, Bnei Brak (PERRIGO Group
headquarters is located in 29 Lehi Street), and from:
1. Offices and laboratories
(rented), on an area of 700 sq. meters in 3 Hashlosha Street, Tel Aviv,
2. A plant, on an area of 69,700
sq. meters (owned by the Group), in Industrial Park Neot Hovav, Ramat Hovav,
south of Beer Sheva, P.O. Box 3593 (the address you provided).
PERRIGO Group also erects an API facility in
India.
In the end of fiscal 2014 year, PERRIGO
consolidated subject's R&D in Tel Aviv into Ramat Hovav.
Having some 500
employees in subject as of end of 2012.
Having 1,300
employees serving PERRIGO ISRAEL Group (similar to 2013, had 1,200 employees in
2012).
There are 10,220
employees in PERRIGO CO. Group worldwide.
PERRIGO CO.
current market value US$ 29.01 billion.
Subject is an
“Approved Enterprise” and as such enjoys tax benefits and State incentives.
In 1999, 2001 and
2003 the Israeli Investment Center (IIC) approved investment plans in volume of
US$ 6.87 million, US$ 8 million & US$ 8 million, respectively, for the
expansion of the plant in Ramat Hovav.
According to
PERRIGO CO.'s financial statements, total assets attributed to API Division,
which subject is a major part of, as of 30.06.2014: US$ 288 million.
In September 2011
PERRIGO CO. issued notes, raising US$ 350 million in a private placement.
In May 2013
PERRIGO CO. raised US$ 600 million issuing bonds.
Financial data is
included in the consolidated B/S of PERRIGO COMPANY PLC which shows (fiscal year
ends June 30th):
US$ (millions)
28.03.2015 28.06.2014
Current assets
Cash
& cash equivalents 3,452.2 805.4
Accounts
receivable 881.7 935.1
Inventories 637.0 631.6
Other
current assets 159.1 178.8
5,130.0 2,550.9
Property & equipment (net) 769.2 779.9
Goodwill 3,467.3 3,543.8
Other intangible assets 6,527.8 6,787.0
Other non-current assets 288.5 218.6
11,052.8 11,329.3
16,182.8 13,880.2
======= =======
Current liabilities 1,284.2 1,074.7
Non-current liabilities 5,312.9 4,111.8
Equity 9,585.7 8,693.7
16,182.8 13,880.2
There
PERRIGO officials reported
in June 2012 that over the last years the Group invested some NIS 280 million
in its Israeli plants, as well as a yearly sum of around US$ 30 million in
R&D. PERRIGO VP further stated that PERRIGO intends to invest further US$
40 million, and will recruit additional 100 employees.
Sales by PERRIGO’s
API segment (which comprises mainly of subject’s activities) for the fiscal
year ending:
June 2011 - US$
155.7 million, making an operating profit of US$ 37.8 million.
June 2012 - US$
165.8 million, making an operating profit of US$ 55.5 million.
June 2013 - US$
159.3 million, making an operating profit of US$ 48.9 million.
June 2014 - US$
137.6 million, making an operating profit of US$ 46.1 million.
Sales for the first
9 months of fiscal year 2015 (ending June 2015) were
US$ 85.5 million, making an operating profit of US$ 24.9 million.
PERRIGO COMPANY
PLC.
Consolidated Statement of Income
US$
(millions)
Fiscal
Year ended 30th June
2014 2013 2012
Sales 4,060.8 3,539.8 3,173.2
Gross profit 1,447.7 1,280.0 1,095.6
Operating income 567.0 679.1 569.2
Income before income
taxes 272.6 607.7 512.0
Net income 205.3 441.9 401.6
======= ======= =======
PERRIGO COMPANY PLC. consolidated revenues for the
first 9 months of 2015 (ending 28.03.2015) were US$ 3,072.3 million (5.3%
increase compared to the parallel period in 2015), making a gross profit of US$
321.8 million, an operating income of US$ 137.2 million, and a net income of
US$ 96.3 million.
PERRIGO API USA,
INC., USA,
PERRIGO API PVT.
LTD., India,
Also: CHEMAGIS
GERMANY GmbH (Germany), CHEMAGIS B.V (Netherlands).
PERRIGO ISRAEL
PHARMACEUTICALS LTD., incorporated 1983, developers, manufacturers, importers,
marketers and exporters of pharmaceuticals: (Rx) drugs (Innovation &
Generics), OTC prescription drugs, API (via subject), etc. Also Operates as
manufacturers of pharmaceuticals as sub-contractors for other companies and as
importers and marketers of medical equipment.
PERRIGO ISRAEL
also controls (all fully owned subsidiaries, unless otherwise mentioned):
PERRIGO ISRAEL
AGENCIES LTD., importers, agents, distributors and marketers of pharmaceuticals
(branded prescription drugs under licenses), including variety of products of
all categories for therapeutic treatment for example: gastro, men's healthcare,
women's healthcare, dermatology etc.
ARGINET
INVESTMENTS AND PROPERTY (2003) LTD.
PERRIGO ISRAEL ENTERPRISES
& INVESTNETS LTD.
PHARMA CLAL (1983)
LTD.
PERRIGO CO. Group
includes, among many others (all foreign companies):
ELAN CORP. LTD.,
manufactures a drug against MS, having many subsidiaries
CRIMAGUA LTD.
L. PERRIGO
COMPANY, PERRIGO COMPANY SOUTH CAROLINA,
PERRIGO NEW YORY INC., latter 3 of USA, handles group's prime
activities,
PERRIGO
SALES CORPORATION,
PERRIGO
RESEARCH AND DEVELOPMENT COMPANY,
PADDOCK
LABORATORIES, LLC
QUIMICA Y FARMACIA
S.A. DE C.V.,
LABORATORIOS DIBA,
S.A.,
WRAFTON LABORATORIES
LIMITED,
GALPHARM
HEALTHCARE LTD.
ORION LABORATORIES
PTY LTD.
PERRIGO INTERNATIONAL INC, which controlls:
PERRIGO ISRAEL
TRADING LIMITED PARTNERSHIP,
PERRIGO ISRAEL HOLDINGS LTD., which controlls:
PERRIGO ISRAEL OPPORTUNITIES II LTD.
VEDANTS DRUG &
FINE CHEMICALS LTD.
Bank Leumi
Le’Israel Ltd., Principal Branch Tel Aviv (No. 800), Tel Aviv.
Mizrahi Tefahot Bank Ltd., Tel Aviv Main Business Center Branch (No.
461), Tel Aviv.
Nothing
unfavorable learned, besides several pending cases handled in courts regarding
drugs patent related issues (which are common in the branch) and alleged
environment violations in Ramat Hovav plant (relatively insignificant).
Despite our efforts, we were unable to speak with subject's officials,
as they were always unavailable. We left messages which so far remain
unanswered.
Subject is veteran
and well-known in its field. Its products comply with the requirements and
standards of leading health authorities including the FDA.
PERRIGO ISRAEL is
the second largest supplier of pharmaceuticals to the local market (after TEVA
PHARMACEUTICALS), with 14% market share. It is the second largest manufacturer
of generic raw materials for the international pharmaceutical market (also
after TEVA). Moreover, PERRIGO ISRAEL is PERRIGO Group's 2nd largest
manufacturing and R&D facilities after the USA.
PERRIGO CO. INC was founded
1887, based in Michigan. PERRIGO CO. PLC is the largest OTC and food supplement
manufacturer for the store brand market, one of the 3 leading companies in USA
in the RX generic dermatology field and one of the 10 leading companies
worldwide in the API field.
In March 2005,
PERRIGO CO. of the USA completed the acquisition of local AGIS INDUSTRIES
(1983) LTD., in return of US$ 450 million in cash and 23% of PERRIGO shares
(the deal reflecting a US$818 million company value to AGIS).
Consequently, AGIS changed its name to PERRIGO ISRAEL PHARMACEUTICALS
LTD., was de-listed from trade and PERRIGO’s (parent) shares began trading on
the TASE in March 2005.
As part of PERRIGO
re-organization in the Group’s activities in Israel, in February 2010 PERRIGO
completed the transaction of selling its Israel Consumer Products business,
i.e. manufacturing, marketing and distribution of consumer products: cosmetics,
toiletries, detergents (CARELINE, NECA, and DAN-AGIS and AGIS DISTRIBUTION)
along with the related production assets in Israel to EMILIA DEVELOPMENT
(O.F.G) LTD. of the Emilia Group, for total sum of NIS 205 million.
In the fourth
quarter of fiscal 2009, PERRIGO decided to close its German API facility
(acquired in 2002 for of €2.9 million), though eventually sold these operations
to a 3rd party.
To further enhance
its API business, in August 2009 PERRIGO acquired 85% in VEDANTS DRUG &
FINE CHEMICALS LTD. for US$12 million (reaching full ownership in Q2-2014 for
US$ 7.2 million), an API manufacturing facility near Mumbai in India, designed
for manufacturing PERRIGO’s high-volume API products, as well as expanding the
Company’s vertical integration of Rx and future candidate Rx-to-OTC switch
products. Manufacturing of API at this facility began in the end of 2014, and
part of API activities were transferred from Israel to India.
Following conflicts
with the Ministry of Environment regarding sewage dumping into collective pools
in Ramat Hovav, in January 2011 it was agreed that subject (together with
another 4 companies) will construct separate sewage pools with a total
investment of NIS 400 million.
In June 2012 it
was reported that PERRIGO will invest US$ 40 million in the expanding of its
plants in Yeruham and Ramat Hovav. In April 2014 it was reported that further
US$ 40 million will be invested in the Yeruham plant. According to the report
further 130 employees will be recruited.
In December 2012
PERRIGO CO reported on the acquisition of 81.5% COBREK PHARMACEUTICALS, INC. of USA (drug development company) on top of
the 18.5% it held, in consideration of US$ 45 million.
In July 2013 PERRIGO
CO completed the acquisition ELAN of Ireland (a generic drug company) for US$
8.6 billion, in cash and in shares. ELAN manufactures a drug against MS,
generating revenues of US$ 1.6 billion in 2012.
Following the
acquisition and share swap, all activities of PERRIGO CO INC. were transferred
to a new company PERRIGO CO PLC.
In November 2014
PERRIGO CO. signed an agreement for the acquisition of OMEGA PHARMA INVEST of
Belgium, an OTC drug manufacturer, for a total sum of US$ 4.5 billion (of which
US$ 3.1 billion in cash – including taking up OMEGA's US$ 1.1 billion debts,
and share allocation). During November-December 2014, PERRIGO CO. raised a
total of US$ 1.6 billion, intended to finance this acquisition.
Annual sales
volume in the local pharmaceuticals market is estimated at NIS 4 billion,
divided into NIS 1.8 billion to the institutional sector (HMO's, hospitals,
etc.) and NIS 1.2 billion to the private sector (including pharma retail
chains).
In 2009 sales of
drugs for human consumption (including from import) reached US$ 1,409 million
(US$ 1,416 million in 2008), of which estimated over US$ 1,100 million were
from import.
Over 90% of sales
by the local Pharmaceutical Industry are for export.
Sales for exports
of pharmaceuticals in 2014 reached US$ 6,513.7 million, representing 3.1%
increase from 2013, a reverse in trend of the past couple of years (7.7%
decrease in 2013, down 6% in 2012) and back to growth trend (10% and 41.5%
increase in 2011 and 2010, respectively, from the previous years).
There are some 13
generic pharmaceutics production companies in Israel and the industry employs
9,000 employees.
Good for trade engagements.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.63.70 |
|
|
1 |
Rs.98.92 |
|
Euro |
1 |
Rs.70.67 |
INFORMATION DETAILS
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Analysis Done by
: |
DIV |
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Report Prepared
by : |
ASH |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively below
average. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
-- |
NB |
New Business |
-- |
This score serves as a reference to assess SC’s
credit risk and to set the amount of credit to be extended. It is calculated
from a composite of weighted scores obtained from each of the major sections of
this report. The assessed factors and their relative weights (as indicated
through %) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend (10%) Operational size
(10%)
This report is issued at your request without any
risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL)
or its officials.