EXHIBIT 99.1
Pfizer to Acquire
King Pharmaceuticals, Inc.
King Pharmaceuticals, Inc.
October 12, 2010
Chuck Triano
Senior Vice President,
Investor Relations
Investor Relations
3
Forward-looking Statements and
Non-GAAP Financial Information
Non-GAAP Financial Information
● Our discussions during this conference call will include forward-
looking statements. Actual results could differ materially from those
projected in the forward-looking statements. The factors that could
cause actual results to differ are discussed in Pfizer’s 2009 Annual
Report on Form 10-K and in our reports on Form 10-Q and Form 8-K.
looking statements. Actual results could differ materially from those
projected in the forward-looking statements. The factors that could
cause actual results to differ are discussed in Pfizer’s 2009 Annual
Report on Form 10-K and in our reports on Form 10-Q and Form 8-K.
● Also, the discussions during this conference call will include certain
financial measures that were not prepared in accordance with U.S.
generally accepted accounting principles. Reconciliations of those
non-U.S. GAAP financial measures to the most directly comparable
U.S. GAAP financial measures can be found in Pfizer’s Current
Report on Form 8-K dated August 3, 2010.
financial measures that were not prepared in accordance with U.S.
generally accepted accounting principles. Reconciliations of those
non-U.S. GAAP financial measures to the most directly comparable
U.S. GAAP financial measures can be found in Pfizer’s Current
Report on Form 8-K dated August 3, 2010.
● These reports are available on our website at www.pfizer.com in the
"Investors—SEC Filings" section.
"Investors—SEC Filings" section.
Additional Information
● The tender offer discussed in this presentation has not yet commenced, and
this presentation is neither an offer to purchase nor a solicitation of an offer
to sell securities. At the time the tender offer is commenced, Pfizer will
cause a new subsidiary, Parker Tennessee Corp., to file a tender offer
statement on Schedule TO with the SEC.
this presentation is neither an offer to purchase nor a solicitation of an offer
to sell securities. At the time the tender offer is commenced, Pfizer will
cause a new subsidiary, Parker Tennessee Corp., to file a tender offer
statement on Schedule TO with the SEC.
● Investors and King shareholders are strongly advised to read the tender
offer statement (including the offer to purchase, letter of transmittal and
related tender offer documents) and the related solicitation/recommendation
statement on Schedule 14D-9 that will be filed by King with the SEC,
because they will contain important information.
offer statement (including the offer to purchase, letter of transmittal and
related tender offer documents) and the related solicitation/recommendation
statement on Schedule 14D-9 that will be filed by King with the SEC,
because they will contain important information.
● These documents will be available at no charge on the SEC's website at
www.sec.gov. In addition, a copy of the offer to purchase, letter of
transmittal and certain other related tender offer documents once they
become available may be obtained free of charge by directing a request to
Pfizer at www.pfizer.com. A copy of the tender offer statement and the
solicitation/recommendation statement will be made available to all
shareholders of King free of charge at www.kingpharm.com.
www.sec.gov. In addition, a copy of the offer to purchase, letter of
transmittal and certain other related tender offer documents once they
become available may be obtained free of charge by directing a request to
Pfizer at www.pfizer.com. A copy of the tender offer statement and the
solicitation/recommendation statement will be made available to all
shareholders of King free of charge at www.kingpharm.com.
4
Frank D’Amelio
Senior Vice President,
Chief Financial Officer
Chief Financial Officer
6
● Provides significant and immediate value creation by leveraging
Pfizer’s scale and business unit structure
Pfizer’s scale and business unit structure
● Enables continued diversification of product revenues, mitigating
single product and single product pipeline risk
single product and single product pipeline risk
● Enhances position within strategically important pain market
● Immediately accretive based upon pre-acquisition revenue and initial
projected cost synergy targets
projected cost synergy targets
● Bolt-on acquisition consistent with our stated strategy
Acquisition Thesis
7
● Tender offer for $14.25 per share, or ~$3.3 billion (net of cash & cash equivalents1)
● Closing subject to tender of at least a majority of King’s shares as well as
customary regulatory approvals
customary regulatory approvals
● Utilizes existing cash
● Immediately accretive to Adjusted Diluted EPS2
Financial Overview
Acquisition Terms
Financial Impact
2011 | 2012 | 2013 | 2014 | 2015 | |
Projected Pfizer Adjusted Diluted EPS2 Impact | $0.02 | $0.02 | $0.03 | $0.04 | $0.04 |
Reaffirm Pfizer’s 2012 Financial Targets
1 Net Cash defined as cash, cash equivalents, investments in debt and marketable securities, less short-term and convertible debt as of 6/30/2010.
2 Adjusted Diluted EPS is defined as Reported Diluted EPS, excluding Purchase Accounting Adjustments, Acquisition-Related Costs, Discontinued
Operations and Certain Significant Items. Reported Diluted EPS is defined as Reported Diluted EPS attributable to Pfizer Inc. common shareholders.
Operations and Certain Significant Items. Reported Diluted EPS is defined as Reported Diluted EPS attributable to Pfizer Inc. common shareholders.
8
King Pharmaceuticals, Inc. Overview
Company Description
● Publicly traded company incorporated in 1993
and headquartered in Bristol, TN
and headquartered in Bristol, TN
† Commercial operations in Bridgewater, NJ
† R&D facilities in Cary, NC
† Manufacturing plants owned in
various locations
various locations
Branded Prescription Products
2009 Sales: $1.2 billion
Meridian Medical Technologies
2009 Sales: $250 million
Animal Health
2009 Sales: $360 million
● US and Puerto Rico presence
● Leading portfolio of opioids
designed to discourage abuse
and misuse
designed to discourage abuse
and misuse
● Business is based on auto-
injector devices
injector devices
● Manufacturer of EpiPen® (sold
by Mylan in US) and antidotes
for the Department of Defense
by Mylan in US) and antidotes
for the Department of Defense
● Acquired via 2008 Alpharma
acquisition
acquisition
● Largely medicinal feed additives
business
business
Company Financial Information | |
Market Cap (10/11/10) | $2.5 B |
2009 Revenues1 | $1.8 B |
2009 EBITDA | $555 M |
2009 Employees | ~2,600 |
Company Operates in Three Key Segments
1 2009 branded prescription products revenues include royalties and other of $50 million
9
Sum-of-the-Parts Value
Meridian Medical
Technologies
Technologies
Animal Health
Branded Prescription
Products
Products
Pipeline
Base Business
Initial Projected Cost Synergies
Potential Additional Synergies (not included in the valuation )
Net Cash and Other Securities
Marketed
Products
Products
Marketed
Products
Products
• Multiple Business Segments with
Existing In-line Value
Existing In-line Value
• Pipeline Expands Pfizer’s Pain
Portfolio
Portfolio
Valuation Diversification
10
Cost Synergies
● Initial projected cost synergies from operating expenses of at
least $200 million
least $200 million
● Majority of savings projected to come from Corporate G&A,
Pharmaceutical and Animal Health marketing and promotion
Pharmaceutical and Animal Health marketing and promotion
● 50% of savings anticipated to be realized in year 1, 75% in
year 2 and 100% in year 3
year 2 and 100% in year 3
● Will maintain portions of King’s infrastructure, where
appropriate, to maximize asset value
appropriate, to maximize asset value
● Cost synergy opportunities will continue to be assessed
Significant Opportunities to Realize Cost Synergies
11
● King’s assets map directly to Pfizer’s current business unit structure
and offer the following:
and offer the following:
† Diversification of revenues and business mix
† Enhanced presence in the strategically important pain therapeutic area
† Potential upside driven by future substantiation of novel abuse-deterrent
technologies
technologies
† Significant cost savings potential
● Acquisition is financially attractive and projected to be immediately
accretive to adjusted diluted EPS1
accretive to adjusted diluted EPS1
● Potential to achieve attractive revenue synergy opportunities enabled
by Pfizer’s scale and competitive strengths
by Pfizer’s scale and competitive strengths
● Reaffirming 2012 financial targets
Key Takeaways
1 See Slide 7 for definition