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July 16, 2015

AMRI Acquires Gadea for $174M

  • Albany Molecular Research (AMRI) said today it has acquired Gadea Pharmaceutical group for $174 million, in a deal intended to expand the buyer’s portfolio of active pharmaceutical ingredients (APIs), as well as its presence outside the U.S.

    AMRI said the deal positions the global contract research and manufacturing organization as a source of specialty and generic APIs through Galdea’s Crystal Pharma division. Crystal’s API portfolio includes 22 active U.S. Drug Master Files (DMFs), 17 EU Certificate of Suitability (COSs), 13 Japanese DMFs and 2 South Korean DMFs. Several of Crystal’s APIs have filings in more than one region.

    Crystal also has capabilities in sterile API production capabilities that AMRI said will complement its sterile drug product business. Gadea also extends AMRI’s API development and manufacturing capabilities in steroids and hormones, as the acquired company is backward-integrated to fermentation of certain steroidal and hormonal intermediates, and further develops other families of non-steroidal final APIs.

    Beyond APIs, AMRI said, the deal adds its sterile drug product offerings with ophthalmic and parenteral suspension dosage forms, as well as prefilled syringe and lyophilization capability. As a result, the buyer said, Gadea and its customers will be able to make use of AMRI's end-to-end sterile drug product services, from pre-formulation to commercial filling of complex API.

    Based in Valladolid, Spain, privately-held Galdea focuses on API and finished dose development and manufacturing, and finished 2014 with revenue of approximately $83 million, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $17 million. Adjusted EBITDA excludes any deal related costs or purchase accounting impacts.

    For this year, Gadea has estimated its revenue as between $80 million and $90 million, with adjusted EBITDA of between $18 million and $20 million.

    Galdea has more than 400 customers selling into 70 countries. Approximately 80% of its revenue is generated outside the U.S. AMRI said the acquisition will enable it to establish a strong European base for sales and operations, while “significantly” increasing its non-U.S. presence.

    Gadea is expected to continue to operate independently within AMRI's API segment, AMRI said.

    "The acquisition of Gadea marks another milestone in our company's path towards becoming the preeminent supplier of custom and complex drug development services and product to both the branded and generic pharmaceutical industry," William S. Marth, AMRI's president and CEO, said in a statement.

    AMRI paid $97 million of the purchase as cash, $43.8 million through issuance of 2.2 million shares of common stock to Gadea owners, and the remaining $33.2 million through assumption of existing net debt.

    AMRI said it has secured $230 million of new senior secured credit facilities from Barclays, part of which funded the cash portion of the deal, as well as repay its $75 million revolving credit facility, as well as transaction-related fees and expenses.

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