Patheon to Merge with DSM Pharmaceutical Products - Pharmaceutical Technology

Latest Issue
PharmTech

Latest Issue
PharmTech Europe

Patheon to Merge with DSM Pharmaceutical Products


Private-equity firm JLL Partners (JLL) and the Dutch chemical company Royal DSM announced a deal to create a new global contract development and manufacturing organization (CDMO) formed by combining Patheon Inc. with DSM Pharmaceutical Products (DPP). The name of the company (provisionally called NewCo) will be announced in the coming months, the companies report.

The new CDMO, with anticipated 2014 sales of about $2 billion (pro-forma) and 8300 employees, will offer services for finished drug products and active pharmaceutical ingredients through 23 locations across North America, Europe, Latin America, and Australia. The new company, which will operate independently, will be 51% owned by JLL and 49% by DSM.

As part of the transaction, JLL will contribute $489 million in cash to NewCo; DSM will contribute DPP and receive a seller note of $200 million, valuing DPP at $670 million. NewCo will acquire Patheon for $9.32 per share in cash, resulting in a total enterprise value for Patheon of approximately $1.95 billion. This represents a 64% premium to Patheon’s closing share price on Nov. 18, 2013.

Financing of $1.65 billion has been secured from J.P. Morgan, UBS, Jefferies, Morgan Stanley, and KeyBank. The transaction is expected to close in the first half of 2014, at which time DSM will deconsolidate DPP and Patheon's Restricted Voting Shares will no longer be traded publicly.

Jim Mullen, currently CEO of Patheon, will be appointed CEO of NewCo upon completion of the transaction. Mullen joined Patheon in 2011 as CEO. Prior to joining Patheon, he served as CEO and president at Biogen Idec from 2003 to 2010.

Sources: Patheon Inc. and DSM

 

 

ADVERTISEMENT

blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
|Monthly
| Weekly

Survey
Which of the following business challenge poses the greatest threat to your company?
Building a sustainable pipeline of products
Attracting a skilled workforce
Obtaining/maintaining adequate financing
Regulatory compliance
Building a sustainable pipeline of products
21%
Attracting a skilled workforce
29%
Obtaining/maintaining adequate financing
8%
Regulatory compliance
42%
View Results
Eric Langer Outsourcing Outlook Eric LangerBiopharma Outsourcing Activities Update
Cynthia Challener, PhD Ingredients Insider Cynthia Challener, PhDAppropriate Process Design Critical for Commercial Manufacture of Highly Potent APIs
Jill Wechsler Regulatory Watch Jill Wechsler FDA and Manufacturers Seek a More Secure Drug Supply Chain
Sean Milmo European Regulatory WatcchSean MilmoQuality by Design?Bridging the Gap between Concept and Implementation
Medicare Payment Data Raises Questions About Drug Costs
FDA Wants You!
A New Strategy to Tackle Antibiotic Resistance
Drug-Diagnostic Development Stymied by Payer Concerns
Obama Administration Halts Attack on Medicare Drug Plans

Click here