API and finished drug manufacturer DSM Sinochem Pharmaceuticals has been sold to London-based private equity firm, Bain Capital.
Singapore-headquartered DSM Sinochem Pharmaceuticals (DSP) is a 50/50 joint venture between Royal DSM and Sinochem Group.
According to the terms, DSM will receive approximately €250m ($292.4m) for its equity stake, excluding an estimated €50m earn-out and transaction costs. When the sale is finalised, DSM expects to receive approximately €275m in cash. The transaction is expected to close in the fourth quarter of 2018
DSP develops, manufactures and sells intermediates, active pharmaceutical ingredients (APIs) and finished dosage form pharmaceuticals across its network in China, India, the Netherlands, Spain, the US and Mexico. The firm employs approximately 2,000 staff.
According to DSP CEO Karl Rotthier, the sale is in line with DSM’s long-term strategy, which focuses on core activities in nutrition, health and sustainable living: “Royal DSM, as one of the shareholders of DSP, announced in 2015 that ‘DSM aims to exit the Pharma and Bulk Chemicals joint ventures in the coming years.’”
DSP’s management team will remain with the company, we were told: “Bain Capital has stated that they look forward to partnering with the management team of DSP to support the company in this new stage of its development.”
“Together with Bain Capital, we remain a global leader in high quality APIs and drug products,” Rotthier added.
According to a Bain Capital spokesperson, the private equity firm is “fully supporting DSP’s strategy around forward integration to finished dosage form pharmaceuticals as well as continuing to improve its position as the leading API supplier in its products delivering highest quality and reliability.”
DSM’s long-term strategy has not hindered DSP’s continued investment in the ingredient and finished drug product space. In April last year, DSM Sinochem announced plans to increase capacity at its antibiotic intermediates plant in Delft, the Netherlands. In addition, last month DSP launched its generic Atorvastatin drug product in Europe.