AMRI Completes Acquisition of Euticals

AMRI has completed the EUR 315 million ($349 million) acquisition of Prime European Therapeuticals S.p.A., also known as Euticals, a privately held company headquartered in Lodi, Italy, specializing in custom synthesis and the manufacture of active pharmaceutical ingredients (APIs). This completes the transaction initially announced on May 5, 2016.

“We are delighted to have Euticals join the AMRI family as we create an industry leader in global contract research and manufacturing. Euticals’ API platform is a significant addition to AMRI’s capabilities, and we are excited about the future opportunities our company will have as a result of this pivotal acquisition,” said William S. Marth, AMRI’s president and chief executive officer, in a company statement “This significantly expands AMRI’s customer base, further diversifies our revenue streams, and moves us significantly closer to our goal of reaching $1 billion in annual revenues by 2018. The Euticals acquisition accelerates our company’s strategy to become a global, preeminent provider of contract research, development and manufacturing services to the pharmaceutical industry while at the same time enhancing our ability to expertly serve our customers.

AMRI financed the EUR 315 million ($349 million) transaction through the issuance of approximately 7.1 million shares of AMRI common stock (valued at signing), seller notes totaling EUR 55 million ($61 million) and the remainder in cash. In connection with the acquisition, AMRI secured $235 million ($260 million) in incremental borrowings under its existing senior secured revolving credit Facility, which bears interest at LIBOR with a floor of 1% plus 475 basis points, and repaid its $30 million revolving credit facility.

At the time of the announced acquisition, AMRI outlined the key strategic benefits of the deal. (1) it significantly expands AMRI’s capabilities in custom and complex APIs; (2) it provides AMRI with an established European custom synthesis presence; (3) it expands AMRI’s expertise in multiple areas: sterile API, steroids, generics, fermentation, controlled substances and monobactams; and (4) it provides AMRI an API portfolio that includes 50 active US drug master files (DMFs), 17 EU certificates of suitability (COS) or compliance with the European Pharmacopeia (CEP), 13 Japanese DMFs, and 6 South Korean DMFs, with several APIs having filings in more than one of these areas and over two dozen other international filings. ,/p>

sThe move also provides AMRI with global scale and a diverse customer and revenue base. Euticals brings over 400 customers with no customer concentration. With 75% of revenue outside North America, Euticals opens up many new markets for AMRI; more than half of AMRI’s combined proforma revenue is expected to be ex US. Euticals also brings additional portfolio diversification in generics; AMRI to leverage US base to include Euticals’ strong generic portfolio.

Euticals operated an API, custom synthesis and fine chemical development and manufacturing business with 2015 revenues and EBITDA of approximately $245 million and $27 million, respectively. On a stand-alone basis, Euticals’ full year 2016 revenue is forecast to be between $245 million and $255 million, with adjusted EBITDA of between $34 million and $38 million, based on estimates offered in May 2016.

Source: AMRI

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