Recipharm Acquires Lusomedicamenta for SEK 1 Billion
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Lusomedicamenta, together with its subsidiary, had twelve month revenues and adjusted EBITDA for non-recurring items to end September 2014 of EUR 50.7 million (SEK 456.3 million) and EUR 12.7 million (SEK 114.3 million) respectively representing an adjusted margin of 25%.
The combined entity will enhance Recipharm’s scale and profitability. Based on LTM September 2014, the combined revenue and EBITDA (pre-Corvette) is SEK 2 725 million and SEK 446 million respectively.
The transaction values Lusomedicamenta at an enterprise value of EUR 112.3 million (SEK 1 040 million), which represents an adjusted EBITDA multiple of 8.8 based on LTM September 2014. The preliminary net debt is neglible. The consideration has been paid in a combination of cash and newly issued RECI B shares. This represents EUR 67.1 million (SEK 621.6 million) in cash and 3 500 000 RECI B shares at a value of EUR 43.9 million (SEK 406.0 million). A further supplementary payment of EUR 1.3 million (SEK 12.0 million) will be paid in 2015 subject to the final 2014 performance of Lusomedicamenta.
Lusomedicamenta has an attractive and competitive cost structure, whilst located in the EU, and manufacturing operations well in line with international regulatory requirements.
Lusomedicamenta will contribute to Recipharm’s Intellectual Property (IP) backed manufacturing business as 30% of sales relate to IP rights including own marketing authorisations, mainly in the Portuguese market.
The transaction was financed by already available credit facilities together with the new share issue.
The existing management and most of the former owners will continue for the foreseeable future in the company.
Thomas Eldered, CEO of Recipharm:
”The acquisition of Lusomedicamenta represents an excellent addition to the Recipharm Group and is perfectly in line with our strategic plan to access new markets, establish new customer relationships and consolidate the industry to become a major CDMO. The new customer base combined with significant IP backed sales in Portugal provides us with many new exciting opportunities. I am particularly pleased that we have been able to reach agreement with the former owners of Lusomedicamenta who were working in the company to stay and take the company on to the next level together with us”.
António Barros Ferreira, speaking on behalf of the sellers: “Since we took ownership of Lusomedicamenta in 2004 as a spinoff of a Janssen-Cilag facility, we have been very successful in creating and growing the business particularly in Portugal. We now have a strong export market and emerging business in Africa which we believe we will be able grow with Recipharm. I am very pleased that we are now becoming part of the Recipharm Group which will enable us to compete on a wider scale and provide many benefits to our customers”.
