Nicholas Piramal to Acquire Pfizer’s Morpeth, UK Facility

PharmaManufacturing.com
06/19/2006

Nicholas Piramal India Ltd. (NPIL), Mumbai, on June 15 announced its intention to acquire the Morpeth, UK, manufacturing facility of Pfizer, Inc. The site is one of Pfizer’s global, high-quality integrated facilities. It has end-to-end production and supply chain capabilities that cover APIs, finished dosage, packaging and distribution.

NPIL’s 100% UK subsidiary, NPIL Pharmaceuticals (UK) Ltd. (earlier, Avecia Pharmaceuticals, UK) has entered into an agreement to acquire the Morpeth Facility on an asset purchase basis. The transaction includes:

1. A supply agreement through November 2011 totaling potential revenues above $350 million.



2. Site fixed assets and property.



3. Certain net current assets.

NPIL anticipates funding the total consideration to be paid and any needed incremental net current assets from its projected pre-acquisition internal accruals of FY2007.

The transaction is on a liability and cash free basis. Completion is subject to required regulatory and other approvals, which are expected by June 19.

Morpeth’s team of about 450 people has rich experience in new product launch, site technical transfer and operational excellence initiatives such as JIT & Right-First-Time. Its facilities are approved by the U.S. FDA and UK's MHRA. Morpeth is a supply hub for certain Pfizer products supplied to the USA, Europe and Japan.

Nicholas Piramal expects significant synergies of its current operations and business pipeline with Morpeth. The Morpeth acquisition will be EPS accretive from FY2007.

This transaction is NPIL’s third acquisition in the UK after its acquisition of Rhodia’s Inhalation Anaesthetics business in December 2004 and acquisition of Avecia’s Custom Manufacturing business in December 2005.

With the acquisition of the Morpeth facility, NPIL has gained strategic entry into the global sourcing network of Pfizer, Inc. This transaction is a second step in the sourcing relationship that the Company began with Pfizer in December 2005. In that month, Nicholas Piramal secured a 7-year contract manufacturing-related R&D services agreement with Pfizer International LLC under which NPIL is to provide process development and scale-up services to Pfizer’s animal health division. With the acquisition of Morpeth, NPIL will become the biggest supplier (in terms of spend) within Pfizer’s Global Contract Manufacturing network; with supplies to over 100 global markets.

For Nicholas Piramal, the acquisition of Morpeth is consistent with its intent to become a global leader in custom manufacturing across the pharmaceutical value chain. At the transaction’s completion, Nicholas Piramal will emerge as one of the world’s top 10 pharmaceuticals outsourcing companies, across custom synthesis, APIs and finished dosage. In annualized terms, NPIL is expected to have custom manufacturing revenues exceed U.S. $200 million.

For further information, visit www.nicholaspiramal.com.