Biopharmaceutical giant Mallinckrodt has agreed to sell its subsidiary BioVectra to H.I.G. Capital for $250 million. The purchase price is comprised of cash at closing of $135 million, a long-term note for $40 million, and contingent payments of up to $75 million.
BioVectra is a contract development and manufacturing company that supplies ingredients for pharmaceutical and biotechnology companies in North America and Europe. The company’s products are used in the treatment of cancer, kidney disease, cardiovascular disease, multiple sclerosis, and other serious diseases.
BioVectra will continue to supply pharmaceutical ingredients to Mallinckrodt’s specialty brands business under a long-term agreement. This transaction includes all BioVectra’s Canadian facilities in Prince Edward Island and Nova Scotia (with a combined 110,000 sq. ft. of manufacturing space), as well as its employees. BioVectra is headquartered in Charlottetown, PE (www.biovectra.com).
“We are excited to support BioVectra’s exceptional leadership and highly dedicated employees,” said Mike Gallagher, a managing director at H.I.G. “BioVectra demonstrates a tremendous ability to generate robust organic growth and utilizes a broad set of technical capabilities to deliver outstanding service and quality. They are completing major capital expenditure programs to significantly expand capacity and the company is well-positioned to capitalize on the growing demand for their services.”
H.I.G. specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing and service businesses. H.I.G. has more than $30 billion of capital under management. The firm is based in Miami with additional offices across the US, Europe, and South America (www.higcapital.com).
Mallinckrodt (NYSE: MNK) develops, manufactures, and distributes branded and generic specialty pharmaceutical products. The stock of the company has performed poorly in 2019, declining nearly 78% over the past three months, amid concerns on what affect opioid litigation will have on the company. Mallinckrodt, with annual revenues of more than $3 billion, has US headquarters in St. Louis and global headquarters near London in Staines-upon-Thames (www.mallinckrodt.com).
“This transaction continues to advance Mallinckrodt’s strategic focus on branded, high-growth biopharmaceuticals by monetizing a non-core business,” said Mark Trudeau, president and chief executive officer of Mallinckrodt. “While we recognize the longer-term growth potential for BioVectra, we believe that the structure of this deal enables us to participate in the future success of the business, and therefore we see this sale as the best option for both Mallinckrodt and BioVectra moving forward.”
Goldman Sachs was the financial advisor to Mallinckrodt on this transaction and Wells Fargo Securities was the financial advisor to H.I.G.
The sale of BioVectra to H.I.G. is expected to close in the fourth quarter of 2019.
© 2019 Private Equity Professional | September 10, 2019
H.I.G. Capital has agreed to sell AMPAC Fine Chemicals to South Korean conglomerate SK Holdings.
“AFC is a terrific organization with exceptional leadership,” said Fraser Preston, Managing Director of H.I.G. “Dr. Malik and his team have transformed the business since we acquired it – adding technical capabilities, diversifying the customer base, building an expanded and flexible manufacturing footprint and delivering industry-leading organic growth every year since our acquisition.”
“H.I.G. has been thoughtful and supportive of AFC since our partnership began several years ago,” said Dr. Malik. “In addition to supporting AFC with growth capital; allowing us to expand our Rancho Cordova facility; start AMPAC Analytical; restart operations at our La Porte site; and acquire the state-of-the-art plant in Petersburg, VA, H.I.G. has provided us with the freedom and flexibility needed to grow the business and served as a dynamic thought partner to our senior leadership team.”
H.I.G. specializes in providing capital to small and medium-sized companies and invests in management-led buyouts and recapitalizations of manufacturing and service businesses. H.I.G. has more than $25 billion of capital under management. The firm is based in Miami with additional offices in New York, Boston, Chicago, Dallas, Los Angeles, San Francisco, Atlanta, London, Hamburg, Madrid, Milan, Paris, Bogotá, Mexico City and Rio de Janeiro (
SK Capital has signed an agreement to acquire Perrigo API, the active pharmaceutical ingredients business of publicly-traded Perrigo Company. The transaction is expected to close during the fourth quarter and the company will be renamed prior to closing.
“Perrigo API is a proven industry leader with strong innovation and manufacturing capabilities and a quality and customer-centric culture,” said Aaron Davenport, Managing Director at SK Capital. “The skills and expertise of the leadership team, dedicated employee-base and the quality of the manufacturing facilities have enabled the business to establish a strong market position.”
SK Capital specializes in the specialty materials, chemicals and healthcare sectors and typically invests equity of $100 million to $200 million in each portfolio company. SK Capital’s portfolio companies generate revenues of approximately $6 billion annually and employ approximately 8,700 people. The firm has more than $1.9 billion of assets under management and is based in New York (
“We believe tremendous value can be created through further investments in people, company culture, processes and technologies,” said Mr. Seri. “We look forward to collaborating with the management team and employees to support their continued growth and building a successful working relationship with Perrigo through our long-term supply agreement.”
