Pfizer on the acquisition trail again, snapping up King Pharmaceuticals for $3.6 billion

Global pharmaceuticals behemoth Pfizer (NYSE: PFE), which is still digesting its mega $68 billion buy of Wyeth last year, has now set its sights on a smaller target, the fellow USA-based specialty drugmaker King Pharmaceuticals (NYSE: KG), in a deal valuing the later at $3.6 billion, or $14.25 a share, in cash, a 40% premium to its closing price the previous day and 46% average over the past month. King’s shares leapt 39% to $14.14 on the news yesterday morning.

The transaction was approved by the boards of both companies and is expected to be accretive to Pfizer's adjusted diluted earnings per share by around $0.02 annually in 2011 and 2012, and about $0.03-$0.04 annually from 2013 through 2015.

Pfizer, which soon faces patent expiry on its best ever selling drug Lipitor (atorvastatin), has done 30 deals in the past five years with an average size of $4.13 billion, but this does not included the $60 billion acquisition of Pharmacia in 2002 nor the $110 billion merger with Warner-Lambert in 2000. The average premium paid for pharmaceutical acquisitions over the past 12 months was 24%, according to data compiled by Bloomberg.