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Mar 11, 2014

$2.65B Patheon Deal Closes, DPx Launched

  • After acquiring the majority stake in Patheon from private-equity firm JLL Partners in a $2.65 billion deal, Royal DSM and JLL have joined to launch a new global contract development and manufacturing organization (CDMO) that will combine the acquired company’s operations with those of two other companies.

    DPx Holdings—formerly known by the provisional name of NewCo—is 51% owned by JLL Partners, with Royal DSM owning the remaining 49%. DPx will serve as corporate parent to business units focused separately on pharmaceutical services, fine chemicals, and products and proprietary technologies. The units were formed by combining Patheon operations with those of DSM Pharmaceutical Products (DPP), and Banner Life Sciences.

    A pharmaceutical unit—to operate under the Patheon Pharma Services brand name—will include the CMO capabilities for a full array of solid and sterile dosage forms, as well as the pharmaceutical product development services, and Biosolutions and Biologics businesses of DPP. A unit focused on fine chemicals, or the ES/IM and active pharmaceutical ingredients (API) businesses, will operate under the brand name DSM Fine Chemicals.

    The third unit, which will operate under the Banner Life Sciences brand name, will specialize in proprietary technologies and softgel formulations for over-the-counter, prescription, and nutritional consumer products.

    “We will lead the way in changing how services are purchased by our customers and in doing so we will create great value for our customers and enhance our leadership position,” Jim Mullen, CEO of DPx, said in a statement. “This key strategic principle will drive future growth and position us as the global leader in the CDMO industry, with offerings unmatched by our competitors.”

    JLL contributed $500 million in equity to DPx, while DSM contributed DSM Pharmaceutical Products (DPP) and received approximately $115 million cash and $75 million of Preferred Partnerships Interest. DPx in turn acquired Patheon for $9.32 per share in cash resulting in a total enterprise value for Patheon of approximately $1.98 billion.

    Headquartered in Durham, NC, DPx has more than 8,000 employees and 24 locations worldwide. The new company anticipates 2014 sales of about $2 billion (pro forma). JLL was founded in 1988 and has since committed about $4.2 billion across six funds, focused on healthcare and other sectors.



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