Growing Catalent Takes Out Cook Pharmica in $950 Million Deal

Published: Sep 20, 2017

Growing Catalent Takes Out Cook Pharmica in $950 Million Deal September 19, 2017
By Alex Keown, Breaking News Staff

SOMERSET, N.J. – Drug delivery company Catalent Inc. struck a deal to acquire privately-held Cook Pharmica LLC, a contract manufacturing organization, for $950 million in cash.

Catalent said the acquisition of Bloomington, Ind.-based Cook Pharmica will strengthen the company’s position as a leader in the rapidly growing area of biologics development and analytical services, manufacturing, and finished product supply. Cook Pharmica is part of parent company Cook Group.

The acquisition will provide Catalent with Cook Pharmica’s 875,000 square foot development and manufacturing facility in Bloomington. The large facility offers Cook Pharmica capabilities across biologics development, clinical and commercial cell culture manufacturing, formulation, finished-dose manufacturing, and packaging, Catalent said. Cook Pharmica’s Bloomington facility has extensive biomanufacturing capacity and deep expertise in sterile formulation and fill/finish across liquid and lyophilized vials, prefilled syringes, and cartridges. It perfectly augments Catalent’s expertise in cell line engineering, bioconjugate development, analytical services, biomanufacturing, prefilled syringe, and blow/fill/seal technologies, the company said.

When the deal is complete, Catalent said it intends to “invest aggressively” at the Cook Pharmica site in Indiana. Additionally, the company will also make an investment at its Madison, Wis. Facility to expand capabilities there, John Chiminski, chairman and chief executive officer of Catalent said in a statement. Catalent announced its intentions to expand its Wisconsin facility last year. In October, the company said it will add an additional 22,000 square feet of manufacturing, office and laboratory space. The site had about 100,000 square feet before the expansion. The addition is expected to allow Catalent to hire an additional 100 employees at the facility over the course of two years. Total costs of that expansion was expected to be approximately $34 million.

For the most recent year, Cook Pharmica generated approximately $179 million in revenue.

“The complementary biologics development, biomanufacturing, and fill-finish capabilities of Catalent and Cook Pharmica will provide biopharmaceutical firms with a single, integrated partner supporting a wide range of clinical and commercial needs,” Chiminski said.

Cook Pharmica has approximately 750 employees. They are expected to become part of Catalent, the company said. There were no indications if any jobs cuts are expected due to redundancies.

Under terms of the deal, Cook Pharmica will receive $750 million in an upfront payment and the remaining $200 million will be pain in additional installments over four years. Catalent said it intends to finance the acquisition with new unsecured notes and equity. Catalent has secured financing from the likes of Morgan Stanley Senior Funding, Inc., J.P. Morgan, RBC Capital Markets, and BofA Merrill Lynch. The acquisition is expected to be accretive to Catalent’s adjusted net income per share in the first full fiscal year following the completion of the transaction, the company said.

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