Recipharm Acquires OnTarget Chemistry
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Recipharm has announced that it has completed the acquisition of OnTarget Chemistry in Uppsala, Sweden. OnTarget Chemistry is a fast growing CRO company with a turnover in 2014 of close to SEK 29 million that is specialized in medicinal chemistry offering synthesis and analytical services which include rare and demanding specialties.
With the acquisition of OnTarget Chemistry, Recipharm will significantly broaden its pharmaceutical development capabilities. The inclusion of preclinical chemistry services will give Recipharm the possibility to engage much earlier in high potential customer projects.
Furthermore, OnTarget Chemistry’s synthesis capabilities will be of great value for the GMP development of APIs in Recipharm’s Italian subsidiary, Edmond Pharma. Sales in 2015 show more than 60 % of total revenue outside Sweden with substantial sales in Germany, Japan and the UK. The business is profitable and the acquisition is expected to be accretive to EPS from 2016.
Carl-Johan Spak, EVP of Development & Technology commented, “With the acquisition of OnTarget Chemistry we will be able serve both existing and new customers with high quality development services. OnTarget Chemistry has a very skilled staff with a high number of PhDs working in a modern laboratory of very high standard. The acquisition is of strategic importance for Recipharm as it will together with the existing development organization fuel manufacturing sales in the long term.
Fredrik Lehmann, CEO of OnTarget Chemistry added “The fit with Recipharm’s development organization is very good for us. We believe we can add preclinical competence and capabilities to Recipharm and we also look forward to contributing with a broad range of both local and international customers. This will be a great opportunity for us to continue to grow our business within Recipharm”.
The purchase price was SEK 15.1 million, of which 50% is paid in cash and the remaining 50% is paid through an issue in kind of 45.838 series B shares in Recipharm. The share issue was resolved upon 15 June 2015 by the board of directors of Recipharm, based on an authorization given by the AGM 7 May 2015.
Approximately 36% of the B shares in Recipharm the seller receives are subject to a lock-up of 2 years. The remaining B shares will be distributed by the seller to certain individuals that contributed their shares in OnTarget Chemistry to the seller before the transaction was consummated.