November 7, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Belgian drugmaker UCB Group announced today that it is selling Kremers Urban Pharmaceuticals Inc. (KU), to two private equity firms, Advent International and Avista Capital Partners, for $1.525 billion. Kremers Urban is UCB’s U.S.-based specialty generic subsidiary.
As part of the deal, UCB will receive gross cash proceeds of $1.525 billion. The company indicates it will use the money to cut debt and increase its strategic investment and strengthen its research and develipment pipeline.
“This is another step for UCB to enhance focus on our core business in neurology and immunology,” said Roch Doliveux, UCB executive officer in a statement. “Our growing core business and UCB’s progressing early and late-stage pipeline now allow us to focus even more on providing innovative solutions to patients living with severe diseases.”
Unanimously approved by UCB’s board, the deal is expected to be finalized in first quarter of 2015. “It is logical that UCB focuses on its core business,” said Bank Degroof analyst Benard Hanssens in a note to investors. “The reinvestment remains the key question.”
Kremers Urban’s primary product is Concerta, used to treat attention deficit hyperactivity disorder (ADHD) and attention deficit disorder (ADD). The company has more than 20 marketed products, including treatments for gastroesophageal reflux disease, ADHD, angina/hypertension and respiratory disease. Part of its strategy in the generics business has been to utilize extended release formulas and alternate dosing methods such as patches, liquids and injectables.
The deal was part of an auction run by financial advisory and asset management firm Lazard. Other companies that expressed interest included Lake Forest, Ill.-based Akron Inc., and other private equity companies. The requested bid was $2 billion.
Brian Markison, now an Industry Executive at Avista, will step up to act as KU’s president and CEO. George Stevenson, formerly in those positions at KU, is stepping down to pursue other interests.
“KU is a strong, specialty player in a rapidly growing and changing global generics industry, and we believe it will thrive as an independent entity as the adoption of generics continues to rise worldwide,” said John Maldonado, a managing director at Advent in a statement. “We are excited to partner with Avista and the KU leadership team to position the company for continued long-term growth.”
“KU is an important player in a dynamic sector with numerous growth opportunities,” said Markison in a statement. “I’m looking forward to leading the KU team and, in partnership with Advent and Avista, driving enhancements throughout the organization to ensure KU meets its strategic objectives as an independent company.”
