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ICIG buys Tessenderlo's struggling pharma business

By Gareth MacDonald+

13-Dec-2012

International Chemical Investors Group (ICIG) has bought Tessenderlo's underperforming European pharmaceutical intermediates and API business.

The acquisition includes two manufacturing operations - Farchemia in Italy; and Calaire Chimie in France - at which 360 employees make active pharmaceutical ingredients and chemical intermediates for producers of branded and generic drugs.

Tessenderlo announced its intention to sell the unit in October as part of a plan to focus on its core businesses. The move landed the firm with a €35m charge that saw it finish the third quarter with a loss of €40.2m.  

Spokeswoman Kathleen Iwens told in-pharmatechnologist.com that: “The divesture was prompted by the group’s new orientation towards products and services that provide solutions in the areas of food , agriculture, water management and valorizing bio-residuals.

"Activities that do no longer fit the group’s new direction, may be divested during that transformation.

She added that: “As it is a share deal, ICIG becomes the new owner of both companies, while all staff remains employed by Calaire and Chimie Farchemia.”

The firm also said the pharmaceutical unit’s lower sales volumes and higher energy costs played a part in the 69 per cent decline in recurring earnings before interest taxes, depreciation and amortization (REBITDA) seen in its ‘other businesses’ segment in the nine months to September 30.

ICIG

Privately-owned International Chemical Investors Group (ICIG) operates 17 independently managed businesses, all of which have origins in major global chemical or pharmaceutical corporations.

The two Tessenderlo plants are the sixth and seventh pharmaceutical industry-focused manufacturing facilities has acquired since 2009 behind sites previously owned by AstraZeneca, Bristol Myers Squibb, Genzyme and Roche .

What ICIG's long term plans are for the two businesses is not yet clear,  but what is certain is that it will try to make them profitable judging by the mission statement published on its website.

"We don't shy away from difficult restructuring situations but we only get involved once we have thoroughly developed and refined a realistic restructuring plan. ICIG requires well defined restructuring periods with short pay-back times of restructuring measures, as we are not prepared to continuously fund cash operating losses.

ICIG did not respond to in-Pharmatechnologist.com's request for additional information ahead of publication.

Gelatin demand

With the sale complete Tessenderlo's only remaining interaction with the pharmaceutical industry will be through its gelatin unit which produces both hard and soft gel capsules. Again according to the firm's third quarter results, revenue from gelatin increased 7 per cent to €129m despite ongoing raw materials shortages.

At the time the firm said that: "Demand for gelatin remains solid in the current environment. Raw material availability globally continues to represent a challenge to the gelatin industry.

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