Cambrex has now entered a 45-day “go-shop” period for a superior third-party proposal to counter $2.4bn from Permira Funds
Cambrex Corporation has signed a definitive agreement to be acquired by an affiliate of the European equity firm Permira funds. The sale of the contract development and manufacturing (CDMO) has been valued at approximately US$2.4 billion, including Cambrex’s net debt.
New Jersey-based Cambrex has grown to become a premier CDMO in the small molecule space over the last several years. The recent acquisitions of Halo Pharma in 2018 and Avista Pharma Solutions in 2019 added drug product manufacturing and a full range of early-stage and analytical testing services to the company’s offerings in drug substance manufacturing.
This aggressive acquisition record has allowed Cambrex to broaden customer relationships over the full product lifecycle, from pre-clinical through commercial.
Completion of the transaction is subject to customary closing conditions, including receipt of approval by Cambrex’s shareholders and customary regulatory approvals. Closing is expected to occur during the fourth quarter of 2019. The transaction will be financed through a combination of debt and equity financing.
“We are excited to announce this transaction with Permira, a global private equity firm that has made significant investments in the pharma services space. This agreement is a strong endorsement of our strategy and represents significant value for our shareholders,” commented Steve Klosk, President and CEO of Cambrex. “Cambrex will continue to invest aggressively in our commitment to our global customer base, where we are constantly looking at ways to provide the broadest possible range of world-class services.”
On the other hand, under the terms of the agreement, Cambrex may actively solicit acquisition proposals from third parties during a 45-day “go-shop” period starting from the date of the agreement (which period may be extended under certain circumstances for an additional 15 days), and subject to customary requirements included in the agreement, enter into or recommend a transaction with a person or group that makes a superior proposal. There can be no assurance that this process will result in a superior proposal. Cambrex does not intend to disclose developments during this process unless and until the Board makes a decision with respect to any superior proposal it may receive.
Assuming the Permira agreement is approved, Cambrex shareholders will receive $60.00 in cash for each share of Cambrex common stock, which represents a 47.1% premium to the 6 August closing stock price and a 37.3% premium to the 60-day volume-weighted average closing price leading up to this announcement.
“We are very excited to back Cambrex in its next phase of growth,” said Henry Minello, Principal in the Global Healthcare Group of Permira. “Over many years, Cambrex has built a leading position with best-in-class capabilities and facilities, backed by an excellent reputation for quality and technical expertise. We look forward to partnering with Cambrex’s talented management and employees to support the growth of its integrated services offering.”
Permira is a global investment firm. Founded in 1985, the firm advises funds with a total committed capital of approximately $48bn and makes long-term investments, including majority control investments as well as strategic minority investments, in companies with the objective of transforming their performance and driving sustainable growth. The firm has made more than 250 private equity investments in five sectors: Technology, Consumer, Financial Services, Industrial Tech and Services, and Healthcare.