AMRI To Acquire Euticals for $358 Million
AMRI, a global contract research and manufacturing organization, has agreed to acquire Prime European Therapeuticals S.p.A., also known as “Euticals,” in a transaction valued at approximately $358 million, consisting of shares of AMRI common stock, cash, and a seller note. Euticals is a privately held company headquartered in Lodi, Italy, specializing in custom synthesis and the manufacture of active pharmaceutical ingredients (APIs). It operates a network of API facilities primarily in Italy, Germany, the US, and France.
“The acquisition of Euticals will provide us an established custom synthesis presence in Europe and will further build on our expertise in complex APIs, positioning AMRI as a preeminent provider of contract research, development and manufacturing services to the pharmaceutical industry,” said William S. Marth, AMRI’s president and chief executive officer, in a company statement.
AMRI points to several key strategic benefits of the proposed acquisition: (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.
The 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 operates 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.
On a pro forma basis, including synergies, AMRI’s full year 2017 revenue is forecast to exceed $750 million, with adjusted EBITDA margins of approximately 20%.
In addition to the financing, the closing of the transaction is subject to customary closing conditions, including Hart-Scott-Rodino clearance in the US.