German firm Sartorius has merged its biotech unit with biopharmaceutical supplier Stedim Biosystems, forming a company anticipated to generate sales of €400-420m during 2007.
The merger, announced last week, will see Sartorius become Stedim's majority owner, with Sartorius set to file a tender offer for Stedim's entire capital. The overall transaction is expected to be completed by summer 2007.
Sartorius is carving out its biotechnology division, which generated sales revenues of €271m in 2006, into a new legal entity which will be combined with Stedim to form a new company – Sartorius Stedim Biotech S.A.
Pro-forma 2006 sales for the new company totalled €362m, with 2007 revenues predicted to hit €400-420m.
This latest merger fits neatly with Sartorius' expansion plans for its biotechnology business unit, with Stedim now contributing expertise in disposable bag systems for biopharmaceutical applications.
Just last month Sartorius' also announced the acquisition of thermoplastics firm Toha Plast, further strengthening the company's position in biopharmaceutical disposables, and consistent with CEO Joachim Kreuzburg's plans for the biotech division to systematically expand its product catalogue.
"Our two companies' product array, technology platforms and regional strengths are highly complementary," said Kreuzburg of the Stedim agreement.
"Given the strong growth rates in the biopharmaceutical markets and the shift in markets toward disposable solutions, this is the ideal time for our Biotech Division and Stedim to come together."
Pro-forma sales revenues for the Sartorius group are now forecast to reach €660-680m in 2007, up from the €521.1m reported for 2006. Costs of the merger are anticipated to set Sartorius back around €5-10m during 2007.
Stedim Biosystems, the "undisputed market leader in disposable bag systems and freeze-thaw technology," according to chairman Bernard Lemaître, was originally intended to stay as a standalone company, but following talks with Sartorius merger plans were signed.
"We initiated a number of talks with companies with technologies complementary to ours in the past," said Lemaître at conference announcing the merger in Germany last week.
"We understood that even though long-term growth was assured for our products, it was interesting also to consider an alliance with a company offering complementary technology in bio-processing activities. This is why we decided to initiate talks with Sartorius."
The merger of the two companies is not expected to result in job losses or site closures, according to Kreuzburg, due to the complementary nature of the firms' product catalogues and the fast-growing market they serve.
The seven-member board of directors for the new company will be comprised of three Stedim representatives and four from Sartorius. While the new company will officially be headquartered in Stedim's main office in Aubagne, France, major global functions will be located at Sartorius' headquarters in Goettingen, Germany.