UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2007
Commission File Number 000-22286
Taro Pharmaceutical Industries Ltd.
(Translation of registrant's name into English)
14 Hakitor Street, Haifa Bay 26110, Israel
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F. Form 20-F |X| Form 40-F |_|
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes |_| No |X|
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-_____.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 30, 2007
TARO PHARMACEUTICAL INDUSTRIES LTD.
By: /s/ Tal Levitt
--------------
Name: Tal Levitt
Title: Director and Secretary
Sun Pharmaceutical Industries Agrees to Acquire Taro Pharmaceutical
Industries in Transaction Valued at $454 Million
First Investment in Israel by Multinational Pharmaceutical Company
Based in India
HAWTHORNE, N.Y.--(BUSINESS WIRE)--May 20, 2007--Taro
Pharmaceutical Industries Ltd. ("Taro," the "Company," Pink Sheets:
TAROF) and Sun Pharmaceutical Industries Ltd. ("Sun," Reuters: SUN.BO,
Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715) today announced that
they have entered into a definitive merger agreement providing for the
acquisition of Taro by Sun for $7.75 per share in cash, a premium of
27% over the closing price of $6.10 per share on May 18, 2007,
representing a transaction with total equity value of approximately
$230 million. Sun will also refinance approximately $224 million in
net debt of Taro. The total enterprise value of the transaction is
approximately $454 million. Taro and Sun also announced that they have
entered into a separate definitive agreement for Sun to provide
immediately $45 million of interim equity financing to Taro by
acquiring 7.5 million of the Company's ordinary shares.
The agreement with Sun represents the culmination of a process
announced by Taro on March 20, 2007, pursuant to which the Company
sought to address its significant liquidity issues in a manner that
would permit it to remain in existence and continue to grow. The
process involved contact with over 20 entities, and extensive due
diligence or discussions with several interested parties. With the
assistance of the Company's financial advisors, The Blackstone Group,
Taro's Board of Directors unanimously determined that the transactions
with Sun were clearly preferable to all other available alternatives
and are in the best interests of the Company, Taro's shareholders,
employees, customers, suppliers and financial institutions.
Merger Agreement
Pursuant to the definitive merger agreement between Taro and Sun,
a newly formed Israeli subsidiary of Sun will merge with Taro, and
each ordinary share of Taro will be converted into the right to
receive $7.75 cash. The merger is subject to a number of terms and
conditions, including the approval of Taro's shareholders and
regulatory review. Merrill Lynch, Pierce, Fenner & Smith Incorporated
provided a fairness opinion to the Board of Directors of Taro in
connection with the proposed merger.
Sun will pay all shareholders, including the Levitt and Moros
families, who founded the Company, $7.75 for each ordinary share.
There will be no consideration paid to Dr. Levitt for the Founders'
Shares, which have one-third of the voting power in the Company.
"We are pleased that this transaction meets our objectives of
achieving value for our shareholders and establishes Taro as an
integral platform for growth within the Sun organization," said Barrie
Levitt, M.D., Chairman of Taro. "Sun is a highly respected,
multinational pharmaceutical company and is an excellent home for our
employees and our products. We very much appreciate the support of our
employees, customers and financial institutions during the recent
months and believe that the transaction with Sun will put Taro on a
course towards financial stability and growth in its worldwide
markets," Dr. Levitt stated.
Sun Chairman & Managing Director, Dilip Shanghvi, stated, "We look
forward to working with Taro and its employees going forward. This is
a good opportunity for Sun and Taro to work together to create
increasing value and add a complementary multinational organization to
Sun's business. We intend to build on Taro's expertise in dermatology
and pediatrics along with specialty and generic pharmaceuticals, and
over-the-counter products. With the addition of 170 talented
scientists to our team we look forward to an increasing number of
product filings of higher complexity."
Established in 1983, listed since 1994 and headquartered in India,
Sun Pharmaceutical Industries Ltd. is an international, integrated,
specialty pharmaceutical company. It manufactures and markets a large
basket of pharmaceutical formulations as branded generics as well as
generics in India, the U.S. and several other markets across the
world. In India, the company is a leader in the niche therapy areas of
psychiatry, neurology, cardiology, diabetology, gastroenterology, and
orthopedics. The company has strong skills in product development,
process chemistry, and manufacturing of complex active pharmaceutical
ingredients, as well as dosage forms. For the year ended March 7,
2007, Sun recorded net sales of Rs. 20,792 million (representing a
compounded annual growth rate of 30% over the last 10 years) and net
profit of Rs. 7,740 million (compounded annual growth of 30% over the
last 10 years). Based on the latest closing price on the Indian stock
exchanges, Sun's market cap is USD$5 billion. International sales
comprise 43% of revenues. Of this, U.S. generic sales are 23%. Sun has
filed 111 ANDAs in the U.S. of which 34 are approved. Over 12% of net
sales has been invested in R&D every year for the last 5 years. Sun
employs a team of more than 550 scientists who work on complex
products for all its geographies.
Litigation Relating to the Transaction
On May 10, 2007 Franklin Advisers, Inc. and Templeton Asset
Management Ltd., the beneficial owners of approximately 9% of the
Company's ordinary shares, filed an initiating motion in Tel-Aviv
District Court seeking certain remedies intended to prevent alleged
oppression of minority shareholders. They also filed a motion for the
appointment of a special interim manager to review the Company's
efforts to identify an appropriate transaction.
On May 19, 2007 Franklin Advisers and Templeton filed a
supplemental request with the court indicating that they believed a
transaction involving Taro was imminent, and seeking a temporary
injunction to prevent the Company from entering into any transaction
that might result in oppression of minority shareholders. If the court
blocks the interim equity financing with Sun, Taro will not be able to
make timely payment of the principal and interest payment due on its
2003 bonds on May 21, 2007. The motion for a temporary injunction is
scheduled to be heard on May 21, 2007.
The Company believes that the proceedings initiated by Franklin
Advisers and Templeton are without merit and are detrimental to the
best interests of shareholders and the Company. The Company intends to
contest the action vigorously.
Thomas E. McClary Appointed to Position of Chief Financial Officer
Taro Pharmaceutical Industries Ltd. also reported today that it
has appointed Thomas E. McClary, C.P.A., to the position of Group Vice
President and Chief Financial Officer, effective immediately. Ron
Kolker, Group Vice President and Corporate Controller of Taro, has
served as interim Chief Financial Officer of the Company following the
departure of the Company's former CFO in October 2006.
Mr. McClary, 53, comes to Taro with more than 27 years of
experience in finance and accounting. Prior to joining Taro, he was
employed as Vice President of International Finance and Chief
Accounting Officer at Ivax Corporation. Mr. McClary held increasingly
senior positions at Ivax from 1998 until its acquisition by Teva
Pharmaceutical Industries Ltd. in 2006. Prior to Ivax, Mr. McClary
held positions that included Corporate Controller and Treasurer of
Solopak Pharmaceuticals, Inc., and Senior Manager at Deloitte and
Touche.
About Taro and Sun
Taro is a multinational, science-based pharmaceutical company,
dedicated to meeting the needs of its customers through the discovery,
development, manufacturing and marketing of the highest quality
healthcare products. For further information on Taro Pharmaceutical
Industries Ltd., please visit the Company's website at www.taro.com.
Established in 1983, listed since 1994 and headquartered in India,
Sun Pharmaceutical Industries Ltd. is an international, integrated
specialty pharmaceutical company. It manufactures and markets a large
basket of pharmaceutical formulations as branded generics as well as
generics in India, the U.S., and several other markets across the
world.
SAFE HARBOR STATEMENT
Certain statements in this release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements include, but are not limited to, statements
that do not describe historical facts and statements that refer or
relate to events or circumstances the Company "believes," or "expects"
to happen, or similar language, and statements with respect to the
various transactions with Sun described in this press release, all of
which are contingent and subject to various conditions. Although Taro
Pharmaceutical Industries Ltd. believes the expectations reflected in
such forward-looking statements to be based on reasonable assumptions,
it can give no assurances that its expectations will be attained.
Factors that could cause actual results to differ include failure to
consummate the agreements with Sun, actions of the Company's lenders,
creditors and Sun, general domestic and international economic
conditions, industry and market conditions, slower than anticipated
penetration of new markets, changes in the Company's financial
position, the outcome of current litigation by Franklin Advisers and
Templeton Asset Management, litigation in any court in Israel, the
United States, or any country in which Taro or Sun operate,
litigation, regulatory actions and legislative actions in the
countries in which Taro operates, future demand and market size for
products under development, marketplace acceptance of new or existing
products, either generic or proprietary, and other risks detailed from
time to time in the Company's SEC reports, including its Annual
Reports on Form 20-F. Forward-looking statements speak only as of the
date on which they are made. The Company undertakes no obligations to
update, change or revise any forward-looking statement, whether as a
result of new information, additional or subsequent developments or
otherwise.
CONTACT: Taro Pharmaceutical Industries Ltd.
Daniel Saks, 914-345-9000 ext. 6208
Vice President, Corporate Affairs