UPDATE 3-Perrigo to buy private baby-food maker for $808 mln

* Deal to add 10 cents to Perrigo’s FY 2011 GAAP EPS

* Deal to add $300 mln in sales in first full FY

* Perrigo not assuming any PBM Holdings debt

* Perrigo to fund deal by cash on hand, debt

* Perrigo shares rise 9 percent to touch lifetime high
(Adds conference call details; updates stock movement)

March 23 (BestGrowthStock) – Generic drugmaker Perrigo Co (PRGO.O: )
said it would buy privately held PBM Holdings Inc, a
store-brand baby food manufacturer, for about $808 million in
cash to expand its presence in infant formula and baby food,
sending its shares up 9 percent to a lifetime high.

On a conference call with analysts, Perrigo’s finance chief
Judy Brown said results from the company’s ongoing core
business operations would continue to track its fiscal 2010
outlook provided last month. [ID:nSGE6102FF]

The deal, expected to close in the fourth quarter of
Perrigo’s fiscal 2010, would add a minimum 10 cents to net
earnings per share in fiscal 2011 and about $300 million in

The company also sees about $150 million in tax savings
from the deal, over the next 15 years.

Perrigo, which is not assuming any PBM debt, plans to fund
the deal using about $175 million of cash on hand and $300
million available under the terms of its existing debt

The balance amount is expected to be raised through one or
more sources of new debt financing, Perrigo said in a
statement. The company has received a bank bridge financing
commitment for up to $350 million to fund the deal.

Gordonsville, Virginia-based PBM manufactures and
distributes over-the-counter store-brand infant formula and
baby foods sold by retailers in the mass, club, grocery and
drug channels in the United States, Canada, Mexico and China.

On the call, Perrigo said the global market for children’s
nutrition and infant formula products has expanded from an
estimated $12 billion in 2003 to about $23 billion in 2009.

Perrigo, which is the largest U.S. maker of store-brand
generic medicines, had said in an interview to Reuters last
September that it would like to gain a larger store-brand
presence in infant formula, ophthalmics and home diagnostics.

The company had said it would like to do more tuck-in
acquisitions rather than larger transactions.

Perrigo is being advised by J.P. Morgan Securities and PBM
has Citigroup as its financial adviser.

Perrigo shares were up 8 percent at $55.15 in morning trade
on Nasdaq. They touched a lifetime high of $55.6099 earlier in
the session.
Stock Market

(Reporting by Esha Dey in Bangalore; Editing by Ratul Ray

UPDATE 3-Perrigo to buy private baby-food maker for $808 mln