Swedish pharmaceutical contract development and manufacturing organization (CDMO) Recipharm has signed two separate agreements to acquire Kemwell’s pharmaceutical CDMO businesses.
Kemwell has integrated facilities in India, Sweden and the US and a portfolio of services for sterile and non-sterile products from preformulation to commercial supply worldwide. It offers expertise in inhaled, nasal, oral, parenteral and topical dosage forms.
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The first acquisition, comprising US and Swedish operations, is expected to close during the second quarter of this year, after review by the Swedish Competition Authority, while the second, comprising India operations, is conditional on governmental and Foreign Investment Promotion Board approvals and is expected to close before the end of the year.
The US and Swedish part of the transactions will be financed by already available funds, existing credit facilities, a share issue in kind to the sellers and a proposed share issue of approximately 693 million Swedish kronor (US$85 million) with preferential rights for existing shareholders.
The acquisition price for the operations in India amounts to US$120 million on a cash and debt-free basis. The consideration will be paid in cash to the sellers – the founding Bagaria family and parties related to the family – at the closing of the acquisition.
The agreement also includes a right of first negotiation to acquire Kemwell’s Indian biopharma business, which is not included in the transaction and will be retained by the sellers.
The deal strengthens Recipharm’s business by aligning US and Indian development and technology operations with the combined company’s manufacturing capabilities in India and Europe. Recipharm also hopes to exploit potential commercial synergies from greater customer offerings and cross-selling.
Recipharm’s legal advisers were Swedish firm Calissendorff Swarting Obermayer Rebmann Maxwell & Hippel and Indian firm Veritas Legal. Partner Nandish Vyas led the Veritas team with assistance from associates Natasha Sethna and Tejasvi Saxena.
AZB & Partners advised the Kemwell group on the deal. The team consisted of partners Srinath Dasari and Nanditha Gopal and associates Bhuvana Veeragavan and Gautam Suseel.
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