Clayton, Dubilier & Rice (CD&R) will make an investment in PharMEDium, a compounder of sterile drug preparations used by hospitals. Oak Investment Partners and Baird Capital will exit as part of the transaction, while JVC Management, an investment firm controlled by David Jonas, Chairman and CEO of the company, will retain a minority investment in the company.
PharMEDium’s sterile compounding services are used by hospitals to facilitate ready-to-use intravenous drug delivery to patients. Using FDA-approved drugs, diluents and containers, the company creates compounded sterile preparations (CSPs), which are not otherwise commercially available in the marketplace. PharMEDium provides CSPs in ready-to-use form with safety, labeling, stability, sterility and dating characteristics that are required by its hospital customers. PharMEDium serves more than 2,600 acute-care hospitals, including integrated delivery systems, academic medical centers, hospital groups, and standalone urban, suburban and rural hospitals. The company was founded by David Jonas in 2003 and is headquartered in the Chicago suburb of Lake Forest, IL (www.pharmedium.com).
Following the transaction, David Jonas, Founder, Chairman and CEO, will be succeeded by William Spalding, PharMEDium’s Executive Vice President, Strategy, Legal and Finance, who will become Chief Executive Officer. Mr. Spalding has more than 20 years of management leadership experience in the healthcare industry. Prior to joining PharMEDium, Mr. Spalding was the Executive Vice President, Strategy and Managed Care of CVS Caremark Corporation, and the Executive Vice President, Strategic Initiatives at Caremark Rx.
“Under David’s leadership, PharMEDium has become the preeminent provider of choice for pharmacy outsourced sterile, intravenous admixture compounding services and the national leader in the hospital pharmacy-outsourcing sector,” said CD&R Partner Richard Schnall. “The company has a sterling reputation for ensuring the highest level of patient safety and provides a highly differentiated value proposition to hospitals that are increasingly outsourcing the preparation of customized anticipatory sterile compounds. We look forward to partnering with the PharMEDium team to build upon the company’s exceptional track record of commitment to patient safety and customer service.”
Clayton, Dubilier & Rice focuses on producing financial returns through building stronger more profitable businesses. Since inception, the firm has managed the investment of more than $19 billion in 57 businesses representing a range of industries with an aggregate transaction value of approximately $90 billion. Founded in 1978, Clayton, Dubilier & Rice is based in New York and London (www.cdr-inc.com).
“I am extremely proud of our achievements as a company over the last decade and look forward to seeing PharMEDium continue its track record of innovative solutions for drug delivery with unmatched customer service offerings with our new equity partners,” said Mr. Jonas. “CD&R has a strong track record working with management teams to build businesses. Importantly, the firm shares our vision for growing PharMEDium and deep commitment to putting patient safety first in everything that we do.”
CD&R has obtained committed financing for this transaction from J.P. Morgan Securities, Credit Suisse and Morgan Stanley.
PharMEDium’s financial advisor was JP Morgan and K&L Gates acted as legal advisor. Credit Suisse Securities and Morgan Stanley acted as financial advisors, and Debevoise & Plimpton acted as legal advisor, to CD&R in connection with the transaction.
© 2013 PEPD • Private Equity’s Leading News Magazine • 12-19-13