Cambrex, a US-based small molecule innovator and developer of generic Active Pharmaceutical Ingredients (APIs), has agreed to acquire compatriot Contract Development and Manufacturing Organization (CDMO) company Halo Pharma, which is majority owned by private equity SK Capital Partners.

Completion of the transaction, for a price of around $425 million, is subject to customary closing conditions and is expected to take place during this year’s third quarter. Both companies are headquartered in New Jersey.

Halo provides drug product development and commercial manufacturing services and is specialized in oral solids, liquids, creams, sterile and non-sterile ointments. Its core competencies include developing and manufacturing highly complex and difficult to produce formulations, along with products for pediatric indications and controlled substances.

The merger of competencies, Cambrex said, will create a leading small molecule CDMO with a broad range of capabilities and a robust customer base. With the addition of Halo’s capabilities, Cambrex will be able to enter the large and growing finished dosage form CDMO market.

Steve Klosk, president and CEO of Cambrex, said Halo's expertise in its product fields fits well with his company’s small molecule API business and will add a substantial new customer base and pipeline of small molecule products. This, he said, will allow the merged business to more efficiently broaden product its pipeline while continuing to capitalize on the rapidly growing pharmaceutical services market.

Halo operates two state-of-the-art GMP compliant facilities at Whippany, New Jersey, and Montreal, Canada, together employing 450 people. Both sites have regulatory approvals from the US FDA, EMEA, DEA and Health Canada. The company is currently engaged in more than 100 product development projects for more than 70 customers and is expected to generate over $100 million in annual revenue this year. Cambrex employs 1,200 people in the US and Europe.