Procaps Group, an integrated LatAm healthcare and pharmaceutical conglomerate, has signed a definitive agreement to buy Grupo Somar, which includes Grupo Farmacéutico Somar and Química y Farmacia and, Gelcaps and associated entities from Advent International, a private equity investor.
Grupo Somar is an integrated pharmaceutical company with focus on developing, manufacturing, and marketing branded generic, private label and OTC products aimed at the private market and providing CDMO services across important market segments in Mexico.
Grupo Somar provides a diversified portfolio of products across important categories and has R&D and manufacturing capabilities.
It runs six production facilities, of which two manufacture Softgel capsules in Mexico, including three FDA-approved facilities with the ability to export to the US.
Grupo Somar reported around $184m in net revenues on an expected combined basis.
Procaps CEO Ruben Minski said: “We are thrilled to execute an important milestone on our long-planned rollup strategy with an ideal acquisition target for Procaps.
“We believe Grupo Somar´s diversified portfolio of innovative products alongside its management and technical capabilities will help accelerate Procaps top and bottom-line growth into the near future in an accretive manner.
“With this acquisition, Procaps continues to diversify its products and geographies based on being a leader in innovative oral delivery systems. I´m excited to finally have a physical presence in Mexico, a country for which we have had great admiration for many years. This is something that we have been working towards for quite some time. This announcement marks an incredibly proud day in our company´s 45-year-old history. Procaps went public in September 2021 to make acquisitions just like this one.”
Advent managing director in Mexico Ariel Blumenkranc said: “We are proud of the pharma platform we have built and are thrilled about the outcome, which was only possible with the dedication and collective effort of Grupo Somar´s strong management team.”
Procaps expects to finance the cash part of the deal consideration with a mix of cash from its balance sheet and incremental debt.
In relation to the deal, Procaps has secured a completely committed bridge credit facility with Bank of America, JP Morgan and Morgan Stanley.
The deal is expected to close in Q4 2022, subject to the satisfaction of customary closing conditions, including approval of the Federal Economic Competition Commission (COFECE) in Mexico.