Recipharm may be paring back some after several years of rapid expansion, but the Swedish CDMO has decided to buy the piece of Indian sterile drugmaker Nitin Lifesciences that it doesn’t currently own.
Recipharm will pay 351 million Swedish kroner (about $43 million) cash and about $10 million in shares for the remaining 26% of the shares in Nitin still owned by the founding Sobti family.
Recipharm struck a $105.2 million agreement two years ago to buy a 74% stake in the sterile injectables CMO. The deal had an option for the remaining shares that had to be exercised by the end of 2017.
“I have been particularly pleased with the way the performance in Nitin Lifesciences has developed since it became part of the Recipharm Group,” Recipharm CEO Thomas Eldered said in a statement. “Both sales and margins have grown in the business despite the recent macro-economic volatility in India and we foresee this favorable development to continue.”
He said the deal will allow Recipharm to better realize “synergies” with its other Indian operations.
That original deal was part of the expansion splurge Recipharm undertook when it decided that to compete it needed a larger global footprint. That included a $200 million purchase of operations in India, Sweden and the U.S. from India’s Kemwell that expanded both its drug development skills and API manufacturing.
Last fall it bought a plant in Spain from Roche, getting a supply deal with the Swiss drug giant in the process. It spent about $164.5 million several years ago to buy Italian CMO Corvette, getting API, finished dose and sterile injectables facilities in that deal.
But bulking up has taken a toll on the company, and when last quarter’s financial results slipped, the drugmaker indicated it would cut some costs by closing two plants in Sweden and laying off 225 workers.