Recipharm to Acquire Corvette for SEK 1.1 Billion
News Aug 30, 2014
The contract development and manufacturing organization, Recipharm AB, has signed an agreement to acquire Milan based Corvette Pharmaceutical Services Group (Corvette) from Italian private equity Group LBO Italia Investimenti s.r.l.
• Corvette had 2013 revenue and EBITDA of EUR 57.7 million (SEK 499 million) and EUR 15 million (SEK 130 million) respectively.
• The combined entity will enhance Recipharm’s scale and profitability. Based on 2013 proforma financials, the combined entity’s revenue and EBITDA would have been SEK 2.6 billion and SEK 408 million respectively.
• The transaction values Corvette at an enterprise value EUR 120 million (SEK 1.1 billion) with estimated net debt of EUR 20 million (SEK 183 million).
• The estimated equity consideration of EUR 100 million will be paid for by 50% cash and 50% in the form of a convertible bond. No additional financing is required.
• The deal provides access to highly interesting geographical areas including Italy and a number of emerging markets, many of which are new to Recipharm.
• Recipharm will have an asset base in each of the five largest European pharmaceutical markets.
• Corvette has a stable and reputable customer base with little overlap with Recipharm thus presenting significant cross-selling opportunities.
• Increases manufacturing capacity and strengthened capability in the highly sought after technology of lyophilization.
• Corvette will contribute to Recipharm’s Intellectual Property (IP) backed manufacturing business as Corvette’s IP portfolio supports circa 40% of their sales.
• Accretive to profitability and EPS with both set to increase already in 2014.
• Closing expected on 1st October 2014 following Recipharm’s Extraordinary General Meeting (“EGM”) to authorize the Board of Directors to issue the convertible bond.
Thomas Eldered, CEO: “The acquisition of Corvette is very much in line with our strategic plan and we are very excited to have secured such a high quality company. We will be gaining access to a first class and largely new customer base as well as new capabilities and capacities that will add to our technology base. Italy is an extremely interesting market made up of many small and mid-size companies where Recipharm currently has little presence. This combined with the significant sales in emerging markets represents an exciting opportunity. We are therefore looking forward to combining the assets of both organizations and working together with the management of Corvette to deliver benefit to all of our stakeholders.”
University of Wisconsin–Madison Professor of Chemistry Shannon Stahl has received the Steenbock Professorship in Chemical Sciences. In addition to advancing the fundamental science in this area, Stahl has been involved in numerous industrial collaborations that have led to practical applications, including target applications relevant to pharmaceutical synthesis.READ MORE