Contract manufacturer PCI sells off majority stake in expansion play in Europe, Asia

After a rapid fire round of plant expansions last year, Philadelphia's PCI Pharma Services has sold off a majority stake to two investors—one of them a United Arab Emirates sovereign fund—which could tee up the contract manufacturer for even more growth in Europe and beyond. 

Private equity firm Kohlberg & Company and Abu Dhabi-based Mubadala are carving out a controlling share of PCI, which also works in clinical trial services and packaging, according to a release.

New York-based Kohlberg plans to buy a controlling stake of the company from current majority shareholder Partners Group while Mubadala is poised to become a "significant investor" in PCI, the company said. Partners Group OK'd the sale with fellow investors Thomas H. Lee Partners and Frazier Healthcare Partners and plans to retain a minority stake in the company, PCI said in release. 

Kohlberg and Mubadala aim to partner with PCI's management team under CEO Salim Haffar to help expand the company's presence throughout Europe and Asia and boost its offerings to include services like sterile fill-finish of injectable drugs, PCI said.

The companies have kept mum on the financial terms, and a PCI spokesperson could not be reached for comment by press time. 

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Kohlberg, a major private investor out of Mount Kisco, New York, makes its home near PCI, but the Mubadala investment comes from a bit further afield.

Established in 2017, Mubadala is a sovereign wealth fund of the government of Abu Dhabi in the United Arab Emirates. Recently, the state-owned holding company has sought to expand its interests in the healthcare field, with a particular focus on life sciences and medical technology. 

“Outsourced pharmaceutical services has been a key investment theme for us over the past few years, and we are excited to be partnering with one of the global leaders in this industry,” Camilla Macapili Languille, head of pharma and medtech at Mubadala, told UAE state news service WAM. 

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In the meantime, PCI—which offers drug development, manufacturing, clinical trial and commercial packaging services—embarked on its own quest to expand last year. 

Last August, the company braced for Brexit with plans to build a 75,000-square-foot facility near Dublin that could serve as both a primary and secondary packaging, storage, logistics and distribution center.

Then in December, the contract manufacturer debuted a 30,000-square-foot expansion at its plant in Rockford, Illinois, adding a temperature-controlled suite, customer reception area and additional office space to the packaging facility. 

Days later, PCI rolled out plans for yet another expansion, this time at its Welsh solid-dose facility in the U.K. PCI said it would double large-scale granulation and fluid bed drying capacity at the site, along with space for new potent handling capabilities.