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Mallinckrodt completes merger with Questcor

BY Ryan Chavis

DUBLIN — Mallinckrodt announced that it has completed the acquisiton of Questcor Pharmaceuticals in a transaction valued at $5.8 billion. Under the terms of the merger, Questcor shareholders will receive $30 in cash and 0.89 of a Mallinckrodt ordinary share for each Questcor share, the company stated.

"We are pleased to complete this transformative transaction and believe it will provide a strong, durable, well-diversified and sustainable platform, capable of generating significant future revenue and earnings growth for Mallinckrodt shareholders," said Mark Trudeau, president and CEO of Mallinckrodt. "HP Acthar Gel has demonstrated success in treating patients suffering from a variety of devastating and difficult-to-treat autoimmune and inflammatory illnesses. We are confident that Acthar will be a strong complement to Mallinckrodt's broadening portfolio of leading specialty pharmaceutical brands, and we look forward to leveraging our extensive manufacturing and scientific expertise, as well as our experience with advocacy and payer communities, to capitalize on the many opportunities it presents."

Commercial operations supporting HP Acthar gel will function as a separate business within the company's specialty pharmaceuticals segment. It will be referred to as the autoimmune and rare diseases business within Mallinckrodt.

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Walmart awards grants to ignite innovation in U.S. manufacturing

BY Mike Troy

BENTONVILLE, Ark. — Walmart held its second U.S. Manufacturing Summit in Denver on Thursday, using the occasion to dole out the first of $10 million in grants designed to stimulate innovation and the creation of U.S. jobs.
 
The initial grants presented this week were given to organizations focused on reducing the cost of textiles manufacturing, including home textiles and apparel, in the U.S. by addressing obstacles throughout production and improving common manufacturing processes with broad application to many types of consumer products.
 
“Innovation is part of the heart and soul of Walmart,” said Michelle Gloeckler, Walmart’s EVP of consumables and U.S. manufacturing. “By investing in American ingenuity originating everywhere from the research lab to the assembly line, we can transform our approach to manufacturing to be more cost-effective and efficient. We can bring more jobs and more production back into American communities.”
 
Grant recipients included:

  • The Georgia Tech Research Corporation for innovation of thread-count-based fabric motion control, a critical enabling technology for the automated production of sewn goods.
  • Indiana University-Purdue University at Indianapolis (IUPUI) to advance and accelerate the industrial implementation of metal 3-D printing for the manufacturing of plastic injection tooling as an alternative to current metal-shaping practices.
  • North Carolina State University College of Textiles to address challenges to manufacturing of furniture cushions in the U.S. by implementing new technologies in both fabric printing and cut-and-sew automation.
  • Oregon State University to develop two novel alternative mold fabricating approaches, and evaluate for functionality, precision and cost reduction potential.
  • Texas Tech University to support collaborative research on cotton breeding and biotechnology, cotton production, and various aspects of textile manufacturing, dyeing efficiency and specialty finishes.
  • The University of Texas at Arlington to develop a novel manufacturing system that will autonomously prepare small motor sub-systems and assemble the motor components.
  • The University of Georgia Research Foundation to develop an innovative approach to fabric dyeing that will greatly reduce, and perhaps eliminate, the need for water in dyeing cotton and cotton/polyester fabrics and yarns.

 
The grants awards are part of a larger domestic sourcing commitment the company made in January 2013 when plans were unveiled to buy an additional $250 billion in products supporting American manufacturing and American jobs by 2023.

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Estée Lauder reports net sales increase of 8% for Q4

BY Vivian Gomez

NEW YORK — The Estée Lauder Cos. achieved record net sales and reported overall strong financial results for the fourth quarter and fiscal year ended June 30.

For the year, the company achieved record net sales of $10.97 billion, an 8% increase compared with $10.18 billion in the prior year. Even excluding the impact of foreign currency translation, net sales still increased 8%.

The company reported a 170 basis-point increase in operating margin, and net earnings for the year rose 18% to $1.20 billion, compared with $1.02 billion last year. Diluted net earnings per common share rose 19% to $3.06, compared with $2.58 reported in the prior year.

“Fiscal 2014 was another outstanding year for our company. We achieved record results across many metrics, including sales, operating margin, earnings per share and operating cash flow. Our topline growth was nearly double that of prestige beauty and was broad-based across regions, product categories and channels, despite slower industry growth in some key countries,” Fabrizio Freda, president and CEO, said. “Our emerging markets, makeup and luxury brands, and our online, freestanding store and travel retail channels led our growth. At the same time, we made careful investment choices to support the fastest areas of growth, while continuing to eliminate non-value-added costs. This excellent performance further demonstrates the resilience and consistency of our strategic business model and strengthened our leadership in global prestige beauty.”

Additionally, the company’s fiscal 2014 fourth-quarter and full-year results included the acceleration of sales orders by some retailers of approximately $178 million in advance of the company’s July 2014 implementation of its strategic modernization initiative in certain of its largest remaining locations. These orders would normally have been expected to occur in the company’s fiscal 2015 first quarter. This amounted to approximately $127 million in operating income, equal to approximately $.21 per diluted common share.

“Fiscal 2014 marks the fifth consecutive year that we achieved outstanding results for our company and stockholders and is a testament to our ability to execute our winning strategy,” Freda said. “The cornerstone of our success is powerful brands, a robust innovation pipeline and a sharp focus on fast-growth areas prioritized in our strategy. We are a growth company well positioned to identify, create and capture the best global opportunities in the growing prestige beauty industry. Increased efficiency and effectiveness, along with benefits from the recent substantial completion of our strategic modernization initiative, should allow us to reinvest for future growth, increase our profitability and continue to generate value for our stockholders.”

For the quarter, the company reported net sales of $2.73 billion, a 13% increase from $2.41 billion in the comparable prior-year period. Excluding the impact of foreign currency translation, net sales also increased 13%. Along with the accelerated retailer orders, fourth-quarter sales benefited from new products and growth in emerging and developed markets.

The company’s fourth-quarter sales growth reflects double-digit gains in the United States and travel retail, as well as double-digit local currency increases in many European emerging markets. In Asia/Pacific, local currency growth was led by strong increases in Japan, China and Hong Kong. Sales gains in the United States, travel retail and Japan include the effect of the accelerated retailer orders.

Looking ahead to fiscal 2015, the company estimates global prestige beauty will grow approximately 3% to 4%. The company expects to grow ahead of the industry by bringing highly innovative products to market and focusing on the fastest growing countries, product categories and channels. The company also expects to leverage its strong sales growth and continue to reduce non-value-added costs to further improve its operating margin in fiscal 2015.

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