Sweden's Recipharm in April issued additional shares, preparing itself for expansion. Now the midsized contract and development group is putting those plans into play, buying an Italian company for more than $160 million, getting new business in Italy and emerging markets, as well as new capabilities.
The company said today that it will pay 1.1 billion Swedish kroner ($164.5 million) to acquire the Milan-based Corvette Pharmaceutical Services Group from the Italian private equity Group LBO Italia Investimenti. The deal will be paid half in cash and half with a convertible bond, the company said in a statement.
The Swedish company picks up three plants, new capabilities and a portfolio of products that account for about 40% of Corvette's sales. Corvette last year had revenues of about €57.7 million ($77 million). Combined revenues, based on pro forma numbers, would be 2.6 billion kroner ($380 million), Recipharm said.
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| Recipharm CEO Thomas Eldered |
"Italy is an extremely interesting market made up of many small and midsize companies where Recipharm currently has little presence," Recipharm CEO Thomas Eldered said in a statement. "This combined with the significant sales in emerging markets represents an exciting opportunity."
With the deal, Recipharm picks up three plants in the Milan area, each with a specialty, the company said. One makes sterile injectable drugs including hormones sold in Japan, one active pharmaceutical ingredients and finished dosage forms and the third facility manufactures bulk lyophilisation of sterile beta lactam antibiotics, much of it sold in Japan. About 265 people are employed at the three facilities, Recipharm said.
There has been a fair amount of expansion in the contract manufacturing segment in recent years, with operators looking for scale and a larger footprint around the globe to serve clients with aims on expanded markets. The most prominent example of that is the merger of Patheon with Netherlands-based DSM Pharmaceutical Products, which renamed itself DPx. It came online with 24 locations across North America, Europe, Latin America and Australia, and more than 8,000 employees. It is projecting $2 billion in 2014 revenues and claims to be the second largest contract manufacturer in the world.
- here's the announcement