The contract development and manufacturing organization Cambrex Corp. said it’s agreed to a $2.4 billion acquisition by an affiliate of the Permira funds.
Shareholders in the New Jersey-based CDMO will receive $60 per share, a 47.1% premium to Tuesday’s closing price, according to a release from the company.
Under the agreement, Cambrex has 45 days to solicit a better deal. The company said it won’t disclose any developments during this “go-shop” period unless the board decides on a different agreement.
The purchase is the latest in a run of mergers in the CDMO field. In March, Thermo Fisher agreed to buy Brammer Bio for $1.7 billion. A month later, Catalent nabbed Paragon Bioservices for $1.2 billion.
Pharmaceutical and biotech companies are increasingly relying on CDMOs as they create more complex therapies and struggle to align their manufacturing networks with their needs. Thermo Fisher CEO Marc Casper recently highlighted the growth potential in the industry, calling it “the golden age for the CDMO space.”
There’s ample precedent for private equity firms buying into the CDMO market. Earlier this year, Ampersand Capital Partners agreed to buy Vibralogics, a contract developer of biological therapies. That followed PE acquisitions in 2017 of Albany Molecular Research Inc. and Parexel International.
With the latest deal, Permira gains a specialist in small molecules and a company that has expanded in the last year with its own acquisitions of Halo Pharma and Avista Pharma Solutions. In its release, Cambrex said those purchases allowed it to broaden customer relationships while adding drug product manufacturing capabilities and early stage and analytical testing services.
"Cambrex will continue to invest aggressively in our commitment to our global customer base, where we are constantly looking at ways to provide the broadest possible range of world class services," Cambrex President and CEO Steve Klosk said in the company’s statement.
The company has a number of locations in North America and Europe and says it can offer customers services across the entire drug life cycle, from substance manufacturing to testing.
The $2.4 billion deal includes Cambrex’s net debt, which stood at $430 million at the end of the first quarter. Permira plans to pay with a combination of debt and equity financing, Cambrex said.
The companies expect the deal to close in the fourth quarter, pending approvals from regulatory authorities and shareholders.