An API maker and a drug services company, each owned by a private equity firm, will merge into a chemistry, manufacturing and controls (CMC) specialist.
Cambridge Major Laboratories (CML), a Germantown, WI, API maker, and AAIPharma Services Corp., a Wilmington, NC-based company that specializes in pharmaceutical analytical testing, product development and manufacturing services, have decided to join forces, believing there will be growth by offering a wider range of services. The deal is expected to close by the end of the month and terms were kept under wraps by their private-equity owners.
A combined company will have the "ability to execute with equal strength across API development, analytical services and finished dosage form manufacturing," said Brian Scanlan, CEO of CML.
CML was acquired in a $212 million deal late last year by American Capital ($ACAS). The investor said at the time that it had been attracted by the growth of CML and its FDA-approved facilities in the U.S. and Europe. American said the API maker last year produced 14 APIs for commercial drugs and more than 100 APIs for drugs in clinical trials. American Capital also controls heparin maker Scientific Protein Laboratories. Water Street Healthcare Partners in 2009 acquired AAIPharma Services and committed $75 million to its expansion.
There has been a fair amount of private equity investment in drug and API manufacturing in the last year. Earlier this year, for example, Warburg Pincus paid $195 million to buy JHP Pharmaceuticals, the majority of which was owned by Morgan Stanley Principal Investments. JHP is a sterile injectable drug manufacturer in Parsippany, NJ.
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