Altaris Acquires Drug Business from 3M

Altaris Capital Partners has acquired Kindeva Drug Delivery, formerly known as 3M Drug Delivery Systems, from 3M for $650 million.

Kindeva Drug Delivery is a contract development and manufacturing organization (CDMO) that specializes in formulation, product development, and commercial manufacturing for the pharmaceutical and biotechnology sectors. The company has specific expertise in developing inhalation, transdermal, and microneedle drug delivery technologies for the treatment of respiratory illnesses and cardiovascular conditions.

Kindeva, led by CEO Aaron Mann, has 900 employees and operates facilities in St. Paul, Minnesota (headquarters); Northridge, California; and Loughborough and Clitheroe, United Kingdom.

“Over the years, 3M has built a unique drug delivery technologies platform, and I look forward to the opportunities ahead for Kindeva as an independent company in partnership with Altaris,” said Mr. Mann. “We will be executing on an ambitious growth plan that involves significant capital investments and the addition of new jobs across all our operating regions.”

As part of the transaction, 3M will retain a 17% minority interest in Kindeva alongside Altaris. “We are excited to be partnering with 3M and the Kindeva team in this corporate carve-out transaction,” said George Aitken-Davies, a managing director of Altaris. “We believe Kindeva is well-positioned to build on its successful track record as a leading provider of drug delivery technologies.”

Altaris Capital Partners invests from $15 million to $50 million of equity in companies that operate across the healthcare industry, including the pharmaceuticals, medical devices, services, and IT sectors. The firm is headquartered in New York City.

3M (NYSE: MMM) is a diversified conglomerate with operations in multiple sectors including consumer, telecommunications, security, healthcare, and transportation. The company is headquartered in St. Paul, Minnesota.

MidCap Financial was the Administrative Agent, Sole Lead Arranger, and Sole Bookrunner for a $300 million senior secured credit facility that supported the buy of Kindeva from 3M. MidCap’s deal team was led by Managing Director Bryan Rupprecht. MidCap Financial, in alliance with its investment manager Apollo Capital Management, is a middle-market focused finance firm that provides debt instruments of $10 million to $750 million to companies across all industries.

Monroe Capital was a co-syndication agent on the senior credit facility and also made an equity co-investment. Monroe was founded in 2004 and is headquartered in Chicago with additional offices in Atlanta, Boston, Los Angeles, New York, and San Francisco.

© 2020 Private Equity Professional | May 5, 2020

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