KKR Takes Undisclosed Stake In Arbor Pharmaceuticals As Specialty Funding Heats Up

December 5, 2014

By Riley McDermid, BioSpace.com Breaking News Editor

Heavy hitting investment firm KKR will take an minority stake in Atlanta-based Arbor Pharmaceuticals for an undisclosed sum, the companies said Friday, as large investors continue their interest in specialty pharmaceutical investments.

KKR said it would finance the deal from its North America XI private equity fund, with an early closing as soon as the first quarter of 2015. Lazard Middle Market was a book runner on the deal for Arbor, while King & Spalding LLP served as its legal counsel. Simpson Thacher & Bartlett LLP served as legal counsel to KKR.

Arbor focuses on marketing branded prescription products for the cardiovascular, hospital and pediatric sector, and also markets generic products through its Wilshire division. It has been on a buying streak over the last four years, completing over 20 acquisition or licensing deals as it seeks to build out its pipeline and regulatory unit.

Arbor has around 400 employees, with over 300 salespeople that they use to promote its products to hospitals and physicians. Acquired by its current investor group, JW Asset Management LLC, in 2010.

“Arbor is led by an accomplished management team with a track record of building and scaling specialty pharmaceutical platforms,” said Ali Satvat, director on KKR’s Health Care investing team, in a statement. “We believe that Arbor, with its diversified product portfolio, late-stage development pipeline, and proven business development acumen, is well positioned for continued growth.”

KKR is a marquee name in health care and biotech investing, with past stakes including Alliance Boots, Biomet, Gland Pharma, HCA, Jazz Pharmaceuticals and PRA Health Sciences. KKR is funding the Arbor investment. Its new stake in Arbor appears to be driven by its interest in acquiring part of an already establish biopharma company with a strong pipeline and projected growth profile.

“We are pleased to be adding KKR, with its extensive industry experience, to our shareholder base,” said Jason Wild, chairman of the board of Arbor and president of JW Asset Management LLC. “We selected KKR based on a number of factors, including compatibility with Arbor and a shared vision for achieving future growth. This is an important next step as we continue building a fully integrated pharmaceutical company focused on products that improve patients’ lives.”