BOGOTA, Colombia – Teva Pharmaceutical Industries Ltd. has agreed to acquire Representaciones e Investigaciones Médicas (Rimsa), of Mexico City, in a deal valued at $2.3 billion that will position the Israeli firm as the leading pharmaceutical company in Mexico, the second largest pharma market in Latin America behind Brazil.

Teva is acquiring a Mexican portfolio of products, intellectual property and patents and assets, which ". . . delivers on our strategy of increasing our presence in key emerging markets in order to position Teva for long-term growth in these markets," said Erez Vigodman, president and CEO of Teva.

And Teva's bet is that Rimsa will provide the company with a significant platform for growth in Latin America "by combining the strong Rimsa brand, licensed portfolio of differentiated, patent-protected products, promising pipeline, significant relationships with physicians, patients and health care providers and its strong commercial presence," Vigodman explained.

Rimsa execs were unavailable for comment. The Mexican generics company reported revenue in 2014 of $227 million with an annual growth, year over year of 10.6 percent since 2011.

The deal is expected to close by the first quarter of 2016. The acquisition isn't expected to impact 2016 non-GAAP earnings and is expected to be accretive starting Q1 2017. The transactions will be funded through a combination of cash on hand and lines of credit.

The deal, according to Jefferies analyst Tom Tarrant, could be a little hefty. "Initial inspection suggests that the price paid may be on the high side. . . . Prior media reports indicated that Rimsa was seeking a $1 billion valuation and that several large pharma cos were interested in the asset – including Sanofi, Pfizer, Abbott and Takeda."

However, in order to boost its presence in Latin America, it was a much-needed move for Teva. "We have long believed that Teva needed to increase its exposure to Latin America," Tarrant wrote in his analysis. "Hence, the acquisition certainly makes sense strategically."

Teva is boosting its international presence with Rimsa, a 45-year-old company that operates in a region covering 120 million people.

Mexico's deal is not Teva's first acquisition this year. The Petah Tikva-based company surprised investors and the market back in July when it announced the acquisition of Allergan plc´s global generic business. July´s deal was valued at $40.5 billion. (See BioWorld Today, July 28, 2015.)

"The conjunction of moves we have conducted during the last 18 months, including this transaction, positions Teva for future growth, which is very powerful cylinder that will fire for us in years to come," said Teva's Vigodman on July 30 during a conference call about the Allergan deal. "We have been developing an emerging late-stage specialty pipeline that will generate an exceptional portfolio of specialty products and solutions. Our net financial profile will enable us to bolster our specialty pipeline and product portfolio in an accelerated manner."

With the Rimsa deal in the works, Tarrant predicted Teva will continue shopping. "With a still relatively unencumbered pro forma balance sheet, we wouldn't be surprised to see similar sized acquisitions in the near to medium term. Now adding Rimsa to the mix, we note that Teva has continued its strong return to the M&A arena in FY15."

In addition to acquiring Rimsa and Allergan's global generic business, earlier this year Teva bought Mylan NV and Auspex Pharmaceuticals Inc. (See BioWorld Today, March 31, 2015, and April 22, 2015.)

"After waiting patiently for the right opportunities to materialize, the company now plans to consummate $46 billion in total transaction value this year alone between the Auspex Pharmaceuticals, Allergan generics and Rimsa transactions – which is unquestionably the largest series of deals in the company's history," said Jefferies.