In $205 million deal, Recipharm buys Kemwell's US, India CDMO businesses
- Swedish company Recipharm is buying Kemwell's US, Indian, and Swedish CDMO operations in a $205 million deal, improving its access to the US market and adding an emerging market presence. The acquisitions will expand Recipharm's bottom line by a little over 20%, as measured by 2015 net sales.
- The buyout is structured as two separate deals, an $85 million buy for Kemwell's US and Swedish operations, and a second $120 million purchase of its business in India. Both are expected to close this year.
- Recipharm aims to use the US acquisition as a launch pad into the pharmaceutical market there, while moving into India gives the company an opportunity to offer reduced cost manufacturing.
Recipharm's expansion will also give it additional manpower, in addition to capacity, reach and capabilities. Kemwell employed 50 employees at its Research Triangle Park, North Carolina location, 210 in Sweden, and 1,400 in India (for its CDMO business).
“These transactions represent a significant step in both the consolidation of the CDMO industry and the transformation of Recipharm into a global leader. We now have a US footprint which we can use to further penetrate the world’s largest pharmaceutical market and the business in Sweden provides us with several opportunities for synergies," said Recipharm CEO Thomas Eldered.
In India, the transaction will hand over a US- and EU-approved solid dosage plant and an oral liquids plant which manufactures for the Indian market.
Notably, Recipharm also gains a right of first negotiation to acquire Kemwell's biopharma business in India, should it wish to expand further.
In BioPharma Dive's first State of Drug Development survey, 72% of respondents expected the rate of consolidation to increase over the next five years. They appear to be spot on in their expectations, given news of this acquisition along with reports the Swiss life sciences company Lonza Group is seeking to buy Catalent.
- in-Pharma Technologist Recipharm to buy Kemwell's AP and formulations business for SEK1.7 bn