Pursuant to the terms of the agreement, AMRI will acquire all the outstanding shares of Cedarburg Pharmaceuticals for $38.2m in cash. The transaction, including $2.8m of assumed liabilities, is valued at $41m and is expected to close in early April 2014.
According to AMRI, the transaction is consistent with the company’s strategy to be the pre-eminent supplier of custom and complex drug development services and product to both the branded and generic pharmaceutical industry.
AMRI president and CEO William S Marth noted that the company is very excited to be joining efforts with Cedarburg as they bring a unique blend of expertise in complex API, a scalable business infrastructure and extensive customer relationships that will augment our existing capabilities and services.
"This transaction represents an important first step in building out our API capabilities, broadens our offerings and customer base and provides us with an ideal platform to pursue additional value creation opportunities," Marth added.
AMRI claims that based on the anticipated timing of the close, this acquisition is expected to add between $13-$14m to its revenue in 2014. AMRI anticipates full year run-rate synergies of approximately $1.5m of EBITDA within 12 months of closing and the acquisition is expected to be accretive to AMRI’s 2014 adjusted diluted EPS in the range of $0.06 to $0.07 per share.
AMRI expects to finance the acquisition and associated fees through cash currently held by the company. Cedarburg is expected to continue to operate independently within AMRI’s API business unit.
Cedarburg Pharmaceuticals business development co-founder and executive vice president Chuck Boland will lead the Cedarburg team and report to AMRI API senior vice president sales and general manager George Svokos.
Wells Fargo Securities acted as exclusive financial advisor to Cedarburg Pharmaceuticals, while Polsinelli PC provided legal support.