CMO Patheon is investing in a U.K. site to increase capacity and add capabilities, including automated capsule filling. The expansion comes as Patheon prepares to merge with DSM's pharma business under the ownership of JLL Partners.
Private equity outfit JLL Partners bet big on contract manufacturing last week with its $2.6 billion deal to combine Dutch Royal DSM with its portfolio CMO Patheon, and the fund's co-founder said the company's not done yet.
Paul S. Levy, co-founder of the investment group that just announced a $2.6 billion deal to buy DSM Pharmaceutical Products and merge it with Patheon, sees opportunity in rolling up more players into a larger company. But with other private investors in the market, he may find competition looking over the same targets.
Private investment firm JLL Partners this week laid out its plan to combine Patheon, a Canadian contract manufacturer it already controls, with the CMO operations of Dutch Royal DSM in a $2.6 billion deal that will make the new company a significant force in the industry. Now, it has laid out its plan to pay for the deal.
Royal DSM and Patheon will join in a deal valued at $2.6 billion that they say will make them a major force in the pharma services business.
Netherlands-based Royal DSM has for several years been doing smaller deals to beef up its pharma contract development and manufacturing business into something more substantial. So has Canada-based Patheon. Now, the two operations will join in a deal valued at $2.6 billion that they say will make them a major force in the pharma services business with sales approaching $2 billion.
Contract manufacturer Patheon is still reaping the benefits of its high-dollar buyout of Banner Pharmacaps, wrapping up the integration process and reporting a 30.4% leap in quarterly profits.
There has been a significant amount of M&A in the contract drug manufacturing sector, and established players are investing to get their piece of the growth as well. Canada's Patheon is now reaping the rewards of its own decision to expand.
Lots of drug companies have been pointing to growth in emerging markets as a bright spot in their earnings reports. Now, Patheon can not only say it has seen growth from investments in new markets, but that they provided it with a return to a profit, however small.
Banner acquisition gives Patheon four new plants and 1,200 additional employees, which the company hopes will help it cross $1 billion in annual revenue this year.