Recipharm has acquired Lusomedicamenta Sociedade Técnica Farmacêutica for SEK 1.04 billion ($139.7 million), in a deal that consolidates two European contract development and manufacturing organizations into one of the continent’s largest CDMOs.

Lusomedicamenta, which is headquartered in the Lisbon region, will bring to Recipharm a strong presence in Portugal, where the acquired company has a number of distribution agreements with large biopharmas such as Boehringer Ingelheim, Gedeon Richter and OM Pharma (Vifor).

A total 30% of Lusomedicamenta’s sales relate to IP rights, including marketing authorizations, in the Portuguese market. Also attractive to Recipharm, it said, was Lusomedicamenta’s presence in Africa and “significant” export activity, with only “limited” customer overlap between the companies.

”The acquisition of Lusomedicamenta represents an excellent addition to the Recipharm Group and is perfectly in line with our strategic plan to access new markets, establish new customer relationships and consolidate the industry to become a major CDMO,” Recipharm CEO Thomas Eldered said in a statement. “The new customer base combined with significant IP backed sales in Portugal provides us with many new exciting opportunities.

The existing management of Lusomedicamenta and most of the former owners will continue at Recipharm “for the foreseeable future,” the acquiring company said.

Lusomedicamenta is a CDMO specializing in the development and manufacture of solid, liquid and semi-solid dose forms as well as sterile ophthalmic products. It operates from two sites near Lisbon and has invested in the production of effervescent tablets with a new dedicated facility for that purpose. The company is also focused on new products carrying the management of the whole process from product development to the registration dossier.

Lusomedicamenta employs around 340 people and produces over 150 formulations in more than 600 stock keeping units (SKUs), exporting to some 45 countries worldwide.

For the 12 months ending September 30, Lusomedicamenta and a subsidiary had twelve month revenues and adjusted EBITDA for non-recurring items to end September 2014 of €50.7 million (about $63 million) and €12.7 million ($15.8  million) respectively.

The deal is the second acquisition in as many months for Recpharm. On October 1, the company completed its acquisition of Corvette Pharmaceutical Services Group from Italian private equity firm LBO Italia Investmenti for €100 million ($124.2 million)–half in cash, half through a convertible bond. The Corvette deal allowed the acquirer to expand in Italy, giving the company an asset base in each of the five largest European pharmaceutical markets. The deal also expanded Recipharm into several new emerging markets.

The combined CDMO of Recipharm and Lusomedicamenta will have revenue and pre-Corvette  EBITDA of SEK 2.725 billion (about $366 million) and SEK 446 million ($59.9 million) respectively.

Recipharm agreed to shell out SEK 621.6 million ($83.5 million) cash and pay the remaining SEK 406 million ($54.5 million) by issuing 3.5 million B shares. The company will also pay an additional SEK 12 million ($1.6 million) in 2015, based on the 2014 performance of Lusomedicamenta.

Recipharm said it financed the deal through existing credit facilities as well as together with the new share issue.

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