Ashland Global Holdings has agreed to buy Pharmachem Laboratories for $660 million in cash.  Pharmachem’s CEO, Colin Macintyre, said the deal combines its custom manufacturing capabilities with Ashland’s formulation knowledge and excipients expertise.

New Jersey, US-based Pharmachem develops, manufactures and supplies custom and branded nutritional and fragrance products from 14 manufacturing facilities in the US and Mexico. The company generates annual sales of about $300 million across three end-markets: nutrition and health (43% of total sales); fragrance and flavors (33%); food, beverage and personal care (15%); and custom manufacturing (9%).

William Wulfsohn, Ashland’s chairman and CEO, said the acquisition offers a number of exciting growth opportunities in higher-margin end-markets while also strengthening its specialty product line. “This combination will enhance our position in fast-growing nutraceutical end-markets, open a new opportunity within fragrances and flavors and strengthen Ashland’s food ingredient business by adding customized functional solutions,” he said.

Ashland said it expects to realize “meaningful” cost synergies by leveraging combined capabilities, as well as tax synergies from integrating Pharmachem into its global business structure.

The transaction, which remains subject to the usual closing conditions and required regulatory approvals, is expected to complete before the end of June.