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Albany Molecular Research Inc. (NASDAQ: AMRI) agreed to acquire Prime European Therapeuticals SpA, known as Euticals, from private equity investment consortium Lauro 57, for $358 million (EUR 315 million) in stock, cash, and a seller note. Euticals is a chemical company headquartered in Lodi, Italy, specializing in custom synthesis and the manufacture of active pharmaceutical ingredients (APIs). Lauro 57, which owns 86% of Euticals, is led by Italian private equity fund Clessidra Capital Partners II and leading Sino-European private equity fund Mandarin Capital Partners SCA SICAR. Additional Italian investors include Private Equity Partners and Idea, as well as the Poli and Carinelli families. Fernando Napolitano will be joining AMRI’s board of directors on behalf of Lauro 57. The move comes within a few months after the untimely death of Claudio Sposito, founder and 79% owner of Clessidra, one of Italy’s biggest buyout firms. Clessidra acquired a majority stake in luxury jeweler Buccellati in 2013, and in fashion house Roberto Cavalli a year ago. “Clessidra acted swiftly; within a week of Sposito’s death it appointed incumbent executive vice-chairman Francesco Trapani – the former chief executive of Italian jeweller and luxury goods retailer Bulgari – as chairman, while Maurizio Bottinelli, a partner and head of the investment team, became chief executive officer,” said WSJ Private Equity News editor Yolanda Bobeldijk. “Yet subsequent talks over the sale of Sposito’s 79% stake in the firm proved more tricky and negotiations over Trapani acquiring a 59% stake in the firm from the Sposito family collapsed in March.” Due to the key-man event, Clessidra is said to be unable to do any deals until its equity and management control issues, and succession plans are resolved. Euticals operates a network of API facilities primarily in Italy, Germany, U.S. and France. The company is one of the leading players in the Pharmaceutical & Fine Chemicals industry with a global scale production and diversified manufacturing plants, offering multiple technology platforms. The company has a portfolio of about 200 active ingredients and intermediates for the synthesis of medical products for numerous therapeutic areas, including antibacterial, anticancer, cardiovascular and central nervous system. Euticals has 10 production plants located in Italy (6), France (2), Germany and the United States, and employs approximately 900 people. Margalit Fine, Euticals’ CEO and former head of European API at Teva Pharmaceutical (NYSE: TEVA), will be leading Euticals’ operations as a senior executive of the combined company. “The acquisition of Euticals will provide us an established custom synthesis presence in Europe and will further build on our expertise in complex APIs, positioning AMRI as a preeminent provider of contract research, development and manufacturing services to the pharmaceutical industry,” said William S. Marth, AMRI’s president and CEO. “Euticals’ expertise with niche and high barrier to entry technologies and products, including certain tetracyclines, monobactams, sterile and fermented APIs and controlled substances, will be a tremendous asset to us. Additionally, Euticals’ large base of over 400 customers will provide us with a number of new large pharma, biotech and generics partners, further extending our global reach and diversifying our revenue. “On behalf of Lauro 57 and its investors, we couldn’t be more pleased to be joining AMRI,” said Clessidra CEO, Maurizio Bottinelli. “Its expertise in developing and manufacturing complex pharmaceutical products is well known and we look forward to joining forces to further expand our presence in the European community.” Euticals operates a highly regarded API, custom synthesis and fine chemical development and manufacturing business with 2015 revenue and EBITDA of approximately $245 million and $27 million respectively. On a stand-alone basis, Euticals’ full year 2016 revenue is forecast to be between $245 million and $255 million, with adjusted EBITDA of between $34 million and $38 million, implying a purchase price multiple of 9.9x 2016 adjusted EBITDA. The transaction is expected to be accretive to AMRI’s 2016 non-GAAP diluted earnings per share. AMRI expects to generate operational synergies of $13 to $15 million over the next three years. On a pro forma basis including synergies, AMRI’s full year 2017 revenue is forecast to exceed $750 million, with adjusted EBITDA margins of approximately 20%. AMRI expects to finance the transaction through the issuance of approximately 7 million shares of AMRI common stock (currently valued at $110 million, equal to approximately 19.75% of AMRI common stock); a seller note of $63 million; and the remainder in cash. AMRI has entered into debt financing commitments with JP Morgan and Barclays. The closing of the transaction is subject to customary closing conditions. Nomura acted as exclusive financial advisor to AMRI in connection with this transaction and Goodwin Procter LLP and LCA Studio Legale acted as AMRI’s legal advisors. Lincoln International acted as sole financial advisor to Lauro 57, and Chiomenti Studio Legale and Debevoise & Plimpton LLP acted as Lauro 57’s legal advisors. AMRI is a global contract research and manufacturing organization that has been working with the Life Sciences industry to improve patient outcomes and the quality of life for more than two decades. With locations in North America, Europe and Asia, its key business segments include Discovery and Development Services, Active Pharmaceutical Ingredients, and Drug Product Manufacturing. The company was founded in 1991 and is based in Albany, New York. Photo: Francesco Trapani, Chairman of Clessidra Capital Partners.]]>