Recipharm AB has signed two separate agreements to acquire Kemwell’s pharmaceutical contract development and manufacturing (CDMO) businesses. The first acquisition, comprising US and Swedish operations, is expected to close during the second quarter 2016, after review by the Swedish Competition Authority. The second, comprising operations in India, is conditional on governmental approvals and expected to close before year end.
The combined entity will have a significantly enhanced reach and scale. The businesses to be acquired had 2015 preliminary net sales of approximately SEK 745 million, corresponding to 22 percent of Recipharm’s 2015 total net sales.
The acquisition price for Kemwell’s operations in the U.S. and Sweden amounts to about $85 million on a cash and debt-free basis, and will be paid to the sellers, Kemfin Holdings Private Ltd. With regard to the Swedish operations, a minor additional owner, with approximately $30 million in cash as well as through an issue in kind of class B shares in Recipharm corresponding to a value of $55 million.
The acquisition price for the operations in India amounts to $120 million on a cash and debt-free basis. The consideration will be paid in cash to the sellers, the founding Bagaria family and parties related to the family, at closing of the acquisition, which is expected to take place before year end.
Thomas Eldered, CEO of Recipharm AB said, “These transactions represent a significant step in both the consolidation of the CDMO industry and the transformation of Recipharm into a global leader. We now have a U.S. footprint which we can use to further penetrate the world’s largest pharmaceutical market and the business in Sweden provides us with several opportunities for synergies. When we receive the approval in India, Recipharm’s customers will have access to very cost effective development and manufacturing capabilities able to serve international markets including the U.S."
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