Recipharm said today it has agreed to acquire the CDMO Mitim for SEK640 million (about $75.5 million), expanding the buyer’s operations by adding a niche technology in the filling of injectable beta lactam products. The deal will enable Recipharm to capture growing sales in the largest market for beta lactams, the U.S., as well as capitalize on limited competition for the technology in Europe.

The acquisition will also allow Recipharm to expand its scale and cut costs through commercial and operational synergies as it combines its operations with Mitim's. Recipharm said it saw opportunities for expanded scale because Mitim’s beta lactam business complements Recipharm’s existing beta lactam operations in Sweden and Italy.

Located in Brescia, Northern Italy, Mitim’s product portfolio includes beta lactams in dry sterile powder for injectable solutions, tablets, and oral suspensions. Other products include injectable sterile solutions, oral solids and liquids, as well as semi-solids.

Mitim’s manufacturing site has five production lines. Since 2012, Mitim has invested more than €12 million ($13.2 million) on three new filling lines, including a new production line for injectable beta lactams that began operation last year. The company had pro forma 2015 revenues of €42.5 million ($46.9 million), a figure that represents an increase of almost 12% on Recipharm’s total revenues last year.

Recipharm said the deal will add to both its EBITDA margin and earnings-per-share starting in the second quarter. The buyer will take a SEK 4 million (nearly $472,000 million) charge against first-quarter results to reflect transaction costs.

Through a subsidiary, Recipharm is buying the shares of privately held Mitim from the Italian family that has owned the company since acquiring it in 1981. The sellers will have subscription rights to 1,039,724 RECI B shares, valued at €14 million ($15.4 million), subject to a 12-month lock-up. The deal is set to close on Wednesday.

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