Top Newsmaker: Perrigo's growth soars at strong pace
Its generic drug products help contain health care costs.
While businesses of all kinds were squeezed last year by a combination of the financial crisis, the weak economy, spiking fuel prices and sagging sales, Perrigo Co. in Allegan continued strong growth and several expansions throughout 2008, elevating it as the Grand Rapids Business Journal Newsmaker of the Year.
Perrigo officials accepted a plaque in recognition of the distinction during today’s Economic Club of Grand Rapids luncheon at the Amway Grand Plaza, Ambassador Ballroom.
For its ability to continue to grow amid difficult economic challenges Perrigo was recognized by a panel of Business Journal staff members as providing a leadership role in pushing Michigan toward long-term vitality and status in the global market.
“Selecting the top Newsmaker spurred interesting and pointed discussions once again this year,” said Carole Valade, editor of the Business Journal. “We spoke with economic analysts who reviewed the list of nominees with an eye toward the entities’ long-term economic impact on West Michigan, in particular. Perrigo rose to the top of the Business Journal editorial board list based on its record of advancement during the past several months, as well as its ability to provide promise for long-term growth opportunities. It is especially interesting that the company’s products are a main defense in health care cost containment.”
“We are honored to receive this recognition,” Arthur Shannon, Perrigo vice president for investor relations and communication, said in accepting the award. He acknowledged it is a further sign of Perrigo’s impact in West Michigan and on the global market.
Perrigo began the year with the acquisition of Galpharm Healthcare Ltd. for $86 million in cash. The privately held Galpharm, based in Barnsley, Yorkshire, U.K., is a leading supplier of over-the-counter store brand pharmaceutical products sold by U.K. supermarkets, drug stores and pharmacies. The acquisition expanded Perrigo’s global presence, added more than $55 million in annual sales, which was accretive to earnings in the first year.
In July, Perrigo announced plans to invest $10.5 million to expand its Allegan headquarters and add 400 jobs over the next five years, as well as new operations and training space to set the stage for future growth.
“In these tough economic times, Perrigo continues to help the consumer by providing quality, affordable health care products,” said Joseph C. Papa, Perrigo’s president, chairman and CEO, said at the time of the announcement. “We see many new opportunities to further reduce consumer health care costs. Many brand products’ exclusivity rights will expire soon, and this will allow us to develop additional high-quality, store-brand versions at an affordable price.”
Business Journal Publisher John Zwarensteyn noted the “long-term economic potential Perrigo’s ongoing efforts bring to this region. The company’s global reach represents the innovative spirit exemplified by the organization’s founders. There were a lot of difficult economic stories to tell in the past 12 months. Perrigo certainly rose above the challenges this evolving economy has created.”
Perrigo’s growth efforts had a significant impact regionally, with the purchase of a long-time area supplier.
In September, the company purchased privately held, Holland-based JB Laboratories for $44 million. All of JB’s 375 employees at its two Holland facilities became part of the Perrigo family. JB Labs is expected to add more than $70 million to Perrigo’s annual sales. JB Labs manufactures vitamins, pharmaceuticals and nutritional supplements. It has been manufacturing products for Perrigo for 25 years, noted Perrigo spokesman Art Shannon. He said JB Labs was attractive to Perrigo because it’s a high-quality, FDA-approved manufacturer with a good history and it’s already Current Good Manufacturing Processes Compliant, so it will hit the ground running. JB Labs also brings to Perrigo’s table additional capacity and contract manufacturing, an area in which Perrigo has not concentrated.
In October, Perrigo acquired Guadalajara, Mexico-based Laboratorios Diba, S.A., for $25 million in cash. Perrigo has been in the Mexican market for more than 65 years and still reigns as the leading supplier of prescription and OTC products there. The purchase of Laboratorios Diba enabled Perrigo to market an additional 150 formulas and 50 trademarks in Mexico’s expanding store brand market and will add nearly $15 million in annual sales. Perrigo also announced a $25 million expansion of its manufacturing and production facilities in Allegan.
In mid-November, the company purchased privately held Unico Holdings of Florida for approximately $49 million in cash. Unico is the leading manufacturer of store brand pediatric electrolytes, enemas and feminine hygiene products for retail customers in the United States. The acquisition is expected to add nearly $50 million to annual sales, which will be accretive to earnings in the first 12 months.
“In the prescription world today, when a product goes generic, its price will drop almost 90 percent,” Papa noted.
In addition to the Perrigo Co. story, nine other developments displayed significant economic impact and were finalists for the Grand Rapids Business Journal Newsmaker of the Year.
Emerging technolgies received a boost in West Michigan.
Banking, credit hit
The housing bubble, subprime implosion, foreclosures, high fuel prices, tightening credit and continuing fallout spotlighted.
Bus Rapid Transit
The BRT line is on track. The BRT project will cost slightly more than $40 million.
GM announces closing
General Motors announced that it would close its plant in Wyoming, eliminating about 1,520 jobs.
Robert Israels expanded The Israels Designs for Living campus and purchased the Klingman’s Furniture Co., moving it to the former Roger’s Department store. Several building renovations and planned several new projects were pursued.
Business Tax Woes
The Michigan Business Tax became more reviled than the Single Business Tax.
Priceline.com leased space in the former Siemens Dematic facility on Eastern Avenue for a call center. It’s estimated it will create 424 jobs over the next five years.
Rockford Construction & Cherry Street Landing: The more than decade-long project invested over $100 million into a decayed section south of Van Andel Arena.
Spartan Stores Inc. becomes one of the gems of West Michigan, making numerous retail acquisitions and stepping up as a community supporter.