Date: 2014-08-19
Type of information: Company acquisition
Acquired company: Corvette Pharmaceutical Services (Italy)
Acquiring company: Recipharm (Sweden)
Amount: SEK 1.1 billion (€120.1 million)
Terms: * On August 19, 2014, the contract development and manufacturing organisation, Recipharm AB, has signed an agreement to acquire Milan based Corvette Pharmaceutical Services Group (Corvette) from Italian private equity Group LBO Italia Investimenti.
Corvette had 2013 revenue and EBITDA of € 57.7 million (SEK 499 million) and € 15 million (SEK 130 million) respectively. The combined entity will enhance Recipharm’s scale and profitability. Based on 2013 proforma financials, the combined entity’s revenue and EBITDA would have been SEK 2.6 billion and SEK 408 million respectively. The transaction values Corvette at an enterprise value € 120 million (SEK 1.1 billion) with estimated net debt of € 20 million (SEK 183 million). The estimated equity consideration of € 100 million will be paid for by 50% cash and 50% in the form of a convertible bond. No additional financing is required.
The closing of the transaction is expected to be 1st October 2014. There are no material conditions to closing. To obtain authorisation for the Board of Directors to issue the convertible bond, Recipharm will convene an Extraordinary General Meeting, scheduled for 11th September 2014. B&E Participation AB, owned by Thomas Eldered and Recipharm Chairman Lars Backsell, that controls 44.6 % of the Recipharm total share capital and 86.4 % of the voting rights, will vote in favour of the convertible bond issue.
Details: The deal provides access to highly interesting geographical areas including Italy and a number of emerging markets, many of which are new to Recipharm. Corvette Pharmaceutical Services Group (consisting of Corvette Group SpA and LIO Immobiliare s.r.l.) has three manufacturing facilities located in the Milan region of Northern Italy. Each facility specialises in a different technology and business area: • Masate - Sterile injectable manufacturing facility with capabilities for both lyophilisation and liquid filling of vials and ampoules including hormones supplied to numerous territories including Japan. The operation also supports Recipharm’s ambition to include more IP in its offering. Currently some 40% of Corvette’s sales are backed by own IP (including marketing authorisations, product rights and patents) with a promising pipeline of new products. Future potential royalties from the possible approval of Erdosteine as an orphan drug in the US for the treatment of bronchiectasis.
• Paderno Dugnano - API and finished dose form development and manufacturing facility with a number of owned product rights including Erdosteine, an important mucolytic product. The facility supplies the global market including the US and Japan.
• Lainate - Bulk lyophilisation of sterile beta lactam antibiotics supplied to numerous markets including Japan.
Around 265 people are employed across the three facilities and over 100 customers are served including big pharma, mid-size speciality pharma as well as global generic companies.
Recipharm will now have manufacturing assets in the five largest European pharmaceutical markets. The company also gains access to a new customer base presenting significant opportunities for cross selling. Approximately 80% of Corvette sales are to customers new to Recipharm. 45% of Corvette’s sales are in Italy and 20% of sales are to Emerging Markets. The operation also increase Recipharm\'s lyophilisation capacity and capabilities.
Related: CDMO
