The deal includes a fixed consideration of $175m (£141m), comprised of an upfront payment of $135 (£109m) and a long-term note for $40m (£32m), as well as contingent payments of up to $75m (£60.7m).
BioVectra is a contract development and manufacturing organisation (CDMO), which serves pharmaceutical and biotech companies with full-service cGMP outsourcing solutions for intermediates and active pharmaceutical ingredients (APIs).
With a unique mix of capabilities, the company is specialised in cGMP microbial fermentation, complex chemistry, biologics and formulation development.
The deal will include all of BioVectra’s sites in Prince Edward Island and Nova Scotia, Canada, in addition to its staff.
Mallinckrodt president and CEO Mark Trudeau said: “This transaction continues to advance Mallinckrodt’s strategic focus on branded, high-growth biopharmaceuticals by monetizing a non-core business.
“While we recognize the longer-term growth potential for BioVectra, we believe that the structure of this deal enables us to participate in the future success of the business, and therefore we see this sale as the best option for both Mallinckrodt and BioVectra moving forward.”
Subject to customary closing conditions, the deal is expected to be completed in the fourth quarter of this year.
Mallinckrodt is planning to use the proceeds from the deal in line with its previously disclosed capital allocation priorities.
H.I.G. Capital managing director Mike Gallagher said: “BioVectra demonstrates a tremendous ability to generate robust organic growth and utilizes a broad set of technical capabilities to deliver outstanding service and quality.
“They are completing major capital expenditure programs to significantly expand capacity and the company is well positioned to capitalize on growing demand for their services.”
In January 2018, Mallinckrodt agreed to sell several hemostasis products to Baxter International for about $185m (£149.8m).
The products are expected to complement and strengthen Baxter’s current portfolio of hemostats and sealants, offering surgeons additional products to meet patients’ varying needs.