- Two private equity firms are purchasing Albany Molecular Research, Inc., a contract research and manufacturing organization, for $21.75 per share.
- The buyers include asset management company The Carlyle Group and investment firm GTCR LLC. As of Feb. 28, Albany, also called AMRI, had a little more than 42.9 million shares of outstanding common stock, meaning the deal values it at about $930 million.
- While AMRI's board of directors has approved the acquisition, it won't be complete until investors owning a majority of the company's stock give their thumbs up. That decision will take place at a special shareholder meaning slated for sometime in the third quarter, according to a June 6 statement.
AMRI, like many other players in the life sciences sector, is no stranger to investment firm interest. In fact, some of the company's largest shareholders include Lauro Cinquantasette S.p.A., BlackRock Institutional Trust Company, N.A. and Vaughan Nelson Investment Management, L.P.
But it wasn't until Bloomberg issued a report in late April that AMRI went from a company that was simply backed by private equity to one that would be taken over by it. Topping the list of potential suitors included Carlyle and U.K.-based Pamplona Capital Management.
That interest came on the heels of a strong 2016 for AMRI. The contract research and manufacturing organization — known as a CRO and CMO, respectively — offers a slew of products and services, including assay development for drug discovery and active pharmaceutical ingredient production. Last year, its contract revenues jumped more than 45% year-over-year to $560 million.
(It's also worth noting that Carlyle, a frequent investor in healthcare companies, also decided this week to partner with Pacific Equity and buyout iNova Pharma for northwards of $900 million.)
Revenue gains have become common place for CROs and CMOs as of late, due in large part to big pharma outsourcing clinical and manufacturing services as a way to speed up drug development and production.
While service providers have welcomed the added income, they have also had to tackle the challenges that come with it, like maintaining adequate staffing levels and quality of services. Due to those difficulties, there has also been increased consolidation in the space. In May, for instance, InVentiv Health and INC Research announced they were merging.
The $21.75 per share price tag for AMRI represents a 42% premium on the weighted average of closing stock prices across the 60 days leading up to April 5, which was " the last trading day prior to public rumors in the press regarding a potential sale process," according to the Tuesday statement. The company's stock closed at $13.37 per share that day.