June 6, 2017
By Mark Terry, BioSpace.com Breaking News Staff
The Carlyle Group (CG), a global asset manager with $162 billion of assets under management, and GTCR LLC, are acquiring contract research organization (CRO) Albany Molecular Research for about $922 million in cash.
The deal is for $21.75 per share in cash, which is a 42 percent premium to the 60-day weighted average closing stock price that led up to April 5.
AMRI is a global contract research and manufacturing organization. It has locations in North America, Europe and Asia. Its key business segments include Discovery and Development Services (DDS), Active Pharmaceutical Ingredients (API), Drug Product (DP), and Fine Chemicals (FC).
GTCR is a private equity firm that focuses on investment in the Financial Services & Technology, Healthcare, Technology, Media & Telecommunications and Growth Business Services industries. Since 1980, GTCR has invested more than $12 billion in more than 200 companies.
“This transaction is a strong endorsement of our strategy,” said William Marth, president and chief executive officer of AMRI, in a statement. “Given their deep healthcare industry expertise and financial resources, Carlyle and GTCR are highly attractive partners for us and offer a compelling opportunity to accelerate our growth and enhance delivery of world-class solutions to our customers.”
The sale has been in consideration for some time. In April, there were rumors that AMRI was considering a deal with Carlyle and Pamplona Capital Management, another private equity firm.
AMRI employs about 3,100 people, 700 in the Albany, NY region. The Albany Business Review says, “The drug manufacturer is best known for discovering the active ingredient in allergy medication Allegra. AMRI’s revenue grew by 42 percent last year to $570.5 million following a series of acquisitions in New Mexico, Spain and Italy. Its revenue is expected to increase this year to somewhere between $710 million and $740 million. Over the past three years, the company’s compound annual growth rate was 48 percent.”
Dean Mihas, the managing director and head of GTCR’s Healthcare group, said in a statement, “We strongly believe in AMRI’s strategic direction and have been very impressed with management’s ability to transform the business into a trusted partner for the biopharma industry. We believe AMRI is uniquely positioned to capitalize on an increased trend for outsourcing of pharmaceutical products and services and look forward to partnering with the AMRI team to achieve its strategic objectives and drive value for all of AMRI’s stakeholders.”
The deal will be financed via a combination of debt and equity financing. Both Carlyle and GTCR have received debt financing commitments. Equity capital for Carlyle’s part will be from Carlyle Partners VI, a $13 billion buyout fund. GTCR’s equity capital investment will come from GTCR Fund XI, a buyout fund with $3.85 billion in limited partner capital commitments.
Credit Suisse Securities (USA) will act as an exclusive financial advisor to AMRI. Goodwin Procter is acting as legal advisor to AMRI for the transaction.
“AMRI has a strong track record of delivering world-class solutions to the global biopharmaceutical industry, and we are excited to help the Company create long-term value through targeted growth and superior customer service,” said Stephen Wise, Carlyle’s managing director and global head of Healthcare, in a statement. “We see great potential and talent within the organization, and are eager to partner with AMRI to strengthen and build upon its existing set of products and services.”
