AMRI ratchets manufacturing up further with Cedarburg buyout

Albany, NY-based AMRI ($AMRI) saw a big jump in revenues last year as its manufacturing side kicked in additional revenue. Now it wants some more of that action and so is picking up Cedarburg Pharmaceuticals, a specialist in APIs for controlled drugs, in a $41 million deal.

AMRI said Monday that it will pay $38.2 million in cash and pick up another $2.8 million in debt to add the Wisconsin-based Cedarburg to its manufacturing stable. The deal is expected to close in April. AMRI said Cedarburg had projected it would produce $19 million in sales for the full year, and so AMRI expects a $13 million to $14 million boost in revenues this year with the addition of Cedarburg.

AMRI has already been on a bit of a roll in manufacturing. When it reported 2013 earnings in February, it said that its $246.6 million in sales were helped by a 14% jump in its large-scale manufacturing business, which grew to $132.6 million. A big part of that came from its Burlington, MA, plant, which at one time the company had called a "money pit." The contract drug developer spent years and millions of dollars to fix problems at its fill-finish plant in the Boston suburbs. The plant had been under fire from the FDA since 2010, just after AMRI acquired it in a buyout of large-scale manufacturer Hyaluron. The FDA gave the plant the all-clear last November. AMRI finished out the year with about $176 million in cash, and CEO William Marth said the company was on the hunt for deals to further expand its business.

Cedarburg makes steroids, prostaglandins, vitamin D analogs, conjugation chemistry and inorganics for the analgesic, ophthalmology and oncology therapeutic areas. But it has something most API makers don't have: DEA approval to make APIs for controlled substances. Last year, the DEA approved its plant in Denver, CO, to manufacture schedule II-V controlled substances, after Cedarburg made upgrades to the plant and to plant procedures dictated by DEA requirements. Its plant at its Grafton, WI, base was already approved by the DEA.

- here's the announcement