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Mallinckrodt to sell Canadian CDMO BioVectra to H.I.G. Capital for $250m

Mallinckrodt sale of BioVectra to H.I.G. Capital : Irish biopharma company Mallinckrodt has agreed to divest its wholly-owned subsidiary BioVectra, a Canadian CDMO (contract development and manufacturing organization) to an affiliate of H.I.G. Capital for nearly US$250 million, as per the latest pharma acquisition news.

The transaction amount to be paid by H.I.G. Capital, which is a US private equity investment firm, includes a fixed consideration of US$175 million.

BioVectra serves pharmaceutical and biotech companies with full-service cGMP outsourcing solutions for intermediates and active pharmaceutical ingredients.

The sale of the Canadian CDMO complements Mallinckrodt’s efforts to advance branded biopharmaceuticals by monetizing a non-core business.

Under a long-term arrangement, BioVectra will continue to supply an active pharmaceutical ingredient supporting the specialty brands business of the Irish biopharma company.

Mallinckrodt sale of BioVectra is expected to include all of the latter’s locations in Prince Edward Island and Nova Scotia, Canada, as well as its employee base.

Mallinckrodt sale of BioVectra to H.I.G. Capital

Mallinckrodt sale of BioVectra to H.I.G. Capital. Photo courtesy of Stuart Miles/Freedigitalphotos.net.

Commenting on H.I.G. Capital acquisition of BioVectra, Mike Gallagher – managing director, H.I.G. Capital said: “BioVectra demonstrates a tremendous ability to generate robust organic growth and utilizes a broad set of technical capabilities to deliver outstanding service and quality.

“They are completing major capital expenditure programs to significantly expand capacity and the company is well positioned to capitalize on growing demand for their services.”

The transaction value comprises an upfront payment of US$135 million and a long-term note for US$40 million, and contingent payments of up to US$75 million, associated with future BioVectra growth potential.

Commenting on Mallinckrodt sale of BioVectra to H.I.G. Capital, Mark Trudeau – president and CEO of Mallinckrodt said: “This transaction continues to advance Mallinckrodt’s strategic focus on branded, high-growth biopharmaceuticals by monetizing a non-core business.

“While we recognize the longer-term growth potential for BioVectra, we believe that the structure of this deal enables us to participate in the future success of the business, and therefore we see this sale as the best option for both Mallinckrodt and BioVectra moving forward.”

Mallinckrodt sale of BioVectra to H.I.G. Capital, which is subject to customary closing conditions,  is expected to close in the fourth quarter of 2019. For more pharma industry news and pharma acquisition news, keep following Pharma News Daily.

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