Philip Morris to Acquire Vectura Group for $1.2B; Street Says Buy

Philip Morris International (PM) has agreed to acquire Vectura Group, an innovative inhaled drug delivery solutions provider, in an all-cash deal of approximately $1.2 billion. The deal is expected to close in the second half of 2021, subject to shareholders’ vote and regulatory approvals.

Based in New York, Philip Morris manufactures and sells cigarettes, tobacco, nicotine-containing products, smoke-free products and associated electronic devices and accessories in over 180 countries.

The transaction value represents a multiple of around 14 times Vectura’s 2020 EBITDA. Phillip Morris seeks to fund the transaction with existing cash balance.

With this buyout, Phillip Morris seeks to create a fully-owned pipeline of products in the prescription drug and over-the-counter categories that will complement Vectura’s CDMO business and meet requirements of its existing client base. (See Philip Morris stock chart on TipRanks)

CEO of Philip Morris Jacek Olczak said, “The market for inhaled therapeutics is large and growing rapidly, with significant potential for expansion into new application areas. PMI has the commitment to science and the financial resources to empower Vectura’s skilled team to execute on an ambitious long-term vision.”

On July 2, Morgan Stanley analyst Pamela Kaufman reiterated a Buy rating on the stock with a price target of $110 (11.8% upside potential).

The stock has a Strong Buy consensus rating based on 6 Buys and 1 Hold. The average Philip Morris price target stands at $111.43, implying upside potential of 13.3% from current levels.

TipRanks data shows that financial blogger opinions are 97% Bullish on Philip Morris, compared to the sector average of 72%.

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