Albany Molecular Research, Inc. Acquires Manufacturing Facilities in India

PharmaManufacturing.com
06/04/2007

Albany Molecular Research, Inc. has signed a definitive agreement to acquire two pharmaceutical manufacturing sites, along with additional land for future expansion, in Aurangabad and Navi Mumbai, India.

Under the terms of the agreement, AMRI will acquire the assets — including facilities, employees, products and equipment — of Ariane Orgachem Pvt. Ltd. in Aurangabad and Ferico Laboratories Ltd. in Navi Mumbai for approximately $11 million in cash. All of the facilities are currently owned by the Runwal Group and manufacture a range of pharmaceutical intermediates and bulk active ingredients, including treatments for diabetes, heart disease and asthma.

As part of the purchase, AMRI will obtain additional land in Aurangabad and plans to invest approximately U.S. $15 million to expand capabilities there over the next three years.

The proposed expansion includes increasing capacity, as well as bringing these facilities into compliance with U.S. Food and Drug Administration regulations for manufacturing clinical trial materials and commercial drug substances. Subject to customary closing conditions, the transaction is expected to close during the second or third quarter of 2007.

The purchase is projected to be neutral to slightly dilutive to AMRI’s earnings by approximately ($0.01) to ($0.02) this year, and accretive by the end of 2008. In fiscal year 2006, these assets collectively generated approximately U.S. $5 million in revenue.

“We are pleased to announce the globalization of our manufacturing operations,” said AMRI Chairman, president and CEO Thomas E. D'Ambra, Ph.D. “Initially, the purchase of these sites augments and provides a reliable and cost-effective supply chain for AMRI’s U.S. based manufacturing operations. It offers us the flexibility to produce raw materials and process intermediates to support our Rensselaer, New York plant. Longer-term, as we increase capabilities in India, we expect to leverage AMRI’s small-scale/development resources on two continents—including our laboratory operations in Hyderabad, India—and offer our customers cost-competitive solutions for their outsourcing needs.”

The aggregate size of the facilities, including both the Aurangabad and Navi Mumbai sites, is over 9,100 square meters, with additional land available for expansion. To ensure a smooth transition, AMRI has established an integration team and plans to continue the employment of the approximately 200 people working at the facilities. Harold Meckler, Ph.D., vice president of science, technology and support services at AMRI, will lead the integration effort during the transition process.

Aurangabad and Mumbai are both located in Maharashtra, one of India’s largest and most populous states. The Maharashtra Industrial Development Corporation has developed land into industrial estates and Special Economic Zones to provide an infrastructure that encourages industrial development. As a leading education center in India, Aurangabad offers a burgeoning pharmaceutical sector, as well as a skilled work-force in engineering and bulk manufacturing.