Investor buys Italian CDMO with plans to roll up others

Doppel Farmaceutici's Rozzano facility in Milan--Courtesy of Doppel

Seeing a big upside to contract manufacturing, the European arm of a New York private equity group has picked up controlling interest in an Italian CDMO, which it says it will use as its base to start buying up others.

Trilantic Capital Partners Europe has bought a 90% stake in Doppel Farmaceutici. It said it assembled its position by buying up shares from a number of Italian entrepreneurs, including Pierluigi Busca, who is says will hold the other 10% of the company. Busca will become chairman of the operation and contract manufacturing veteran Giuseppe Cassis has been named CEO.

Doppel, which was founded in 1994, manufactures and packs pills, granules, creams, tablets, oral solutions, sprays, as well as and sterile injectables. It has plants in Cortemaggiore and Rozzano in Northern Italy and 460 employees. It also does some production of nutraceutical and cosmetic supplements as well as some medical devices.

Terms of the deal were kept under wraps but Trilantic said in the announcement that Doppel had had sales of about €83.4 million ($93.4 million) last year with EBITDA of €12.3 million. The majority of that business, 63%, came from work in Italy, including for what it referred to as "blue-chip Italian and international clients." The other 37% of its work is from international markets.

But Trilantic's plans are to build particularly the international piece of the biz, focusing on the U.S. and the Far East, the company said. It said the strategy is to build the company both organically and by acquiring other CDMOs. It intends to strengthen Doppel's R&D operation, and looks to buy operations that have niche capabilities such as developing and producing injectable biologics. It also intends to build some new facilities.

The playbook sounds a lot like the one being used by JLL Partners, which in 2013 pulled off a $2.6 billion deal to merge its CDMO Patheon with Royal DSM's, DSM Pharmaceutical Products. At the time, Paul Levy, cofounder of JLL, said the contract manufacturing industry looked ripe for consolidation. Since then what has become DPx has bought several specialty CDMOs in the U.S., including a sterile injectables company. It also has invested in its existing operations. In its first full year as part of DPX, Patheon had revenues of $1.7 billion.

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