Permira initiated the transaction after Cambrex flexed its own M&A muscle and acquired Avista and Halo.
Shares of Cambrex Corporation are up more than 46% in morning trading after the company announced it signed an agreement to be acquired by an affiliate of the Permira funds for $60 per share, about $2.4 billion.
Steve Klosk, president and chief executive officer of Cambrex, said the company was excited about the deal with Permira, a global private equity firm.
“This agreement is a strong endorsement of our strategy and represents significant value for our shareholders. Cambrex will continue to invest aggressively in our commitment to our global customer base, where we are constantly looking at ways to provide the broadest possible range of world-class services,” Klosk said in a statement issued this morning.
New Jersey-based Cambrex is a contract development and manufacturing organization specializing in the small molecule space. Over the past several years Cambrex has grown through its own M&A activity, including the $252 million acquisition of Avista Pharma Solutions, which closed earlier this year. Last year, Cambrex snapped up Halo Pharma in a $425 million deal. The acquisition of Avista allowed Cambrex to enter the large and growing market for early-stage small molecule development and testing services. The acquisition of Halo allowed Cambrex to enter the growing finished dosage form Contract Development and Manufacturing Organization market.
Henry Minello, a principal in the Global Healthcare Group of Permira, said the equity fund was excited to back Cambrex in its next phase of growth. Minello noted that over the past several years, Cambrex has established itself as a leader with “best-in-class capabilities and facilities,” as well as a strong leadership team with an “excellent reputation.”
“We look forward to partnering with Cambrex’s talented management and employees to support the growth of its integrated services offering,” Minello said.
Under terms of the agreement, Cambrex shareholders will receive $60 in cash for each share of Cambrex common stock, which represents a 47.1% premium to the Aug. 6 closing price. The deal is valued at about $2.4 billion, including Cambrex’s net debt. Completion of the transaction is expected to occur during the fourth quarter of 2019. The transaction will be financed through a combination of debt and equity financing.
Morgan Stanley & Co. LLC is acting as exclusive financial advisor and Kirkland & Ellis, LLP is serving as legal advisor to Cambrex. RBC Capital Markets is acting as exclusive financial advisor and provided committed debt financing to the Permira funds.
