In a transaction valued at around $2.4 billion including net debt, US small molecule innovator and API specialist Cambrex has agreed to be acquired by an affiliate of the Permira private equity funds.

Under the terms, shareholders of the company based in East Rutherford, New Jersey, will receive $60 in cash for each share of common stock they hold. This represents a 47.1% premium to the closing price on Aug. 6, 2019 and a 37.3% premium to the volume weighted average closing price in the 60-days preceding the deal’s announcement.

Permira plans to stem the acquisition through a combination of debt and equity financing. Closing is expected during this year’s fourth quarter, subject to approval by Cambrex’s shareholders, along with regulatory approvals and other customary closing conditions.

A leading contract development and manufacturing organization in the small molecule segment, Cambrex itself has been very active in M&A over the past two years, buying Halo Pharma for $425 million and Avista Pharma Solutions for around $252 million.

 Steve Klosk, president and CEO of Cambrex, said at the time the acquisitions would bring the company a large number of new customer relationships that would provide cross-selling opportunities for its API and finished dosage form services as well as “significantly increasing” the funnel of molecules that may advance to commercial status.

As seen in other deals this year, the acquisition announcement may not be the final chapter. Cambrex said it may actively solicit acquisition proposals from third parties during a 45-day “go-shop” period starting from the date of the agreement – which under certain circumstances could be extended for an additional 15 days.  It could also examine a superior proposal if such is offered.

The company said it doesn’t intend to disclose developments during this process unless and until its board makes a decision with respect to any superior proposal it may receive.

Facility in Edinburgh to be expanded

In separate news, Cambrex said it is expanding its solid form screening and crystallization process development facility in Edinburgh, Scotland, thus doubling its current footprint. The expansion will add additional laboratory space to enable the recruitment of up to 40 more scientists, with the potential for further growth in the future. The site currently employs 50 people.

Fit-out is expected to begin in later this month, with a target completion date of the end of 2019. Cambrex picked up the Scottish firm formerly known as Solid Form Solutions with the acquisition of Avista. It said the Edinburgh site is a world-leader in providing solid form development services for drug substance and drug product.

The expanded lab space will allow the installation of additional instruments and reactors for larger scale crystallization studies and solid form screening capabilities. Cambrex said plans also are in place for the installation of new ultra-performance liquid chromatography (UPLC) and gas chromatography instruments, as well as additional process analytical technology (PAT) tools.