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Eyes on Europe
ALBANY, N.Y.—In an effort to expand its geographic footprint and extend its market share into Europe, AMRI has acquired Excelsyn Ltd., a leader in providing chemical development and manufacturing services to the pharmaceutical industry on that continent, for approximately $19 million in cash.
Located on a 14-acre site in Holywell, North Wales, U.K., Excelsyn has 60 employees and generated revenue of $15 million in 2009. Excelsyn provides development and large scale manufacturing services to large pharmaceutical, specialty pharmaceutical and biotechnology customers throughout Europe, Asia and North America. Manufacturing services include preclinical and Phase I-III product development as well as commercial manufacturing services for approved products. The 24/7 operation is focused on providing rapid response solutions using an innovative model for accelerated product changeovers in the plant.
In addition to an expanded European customer base made of up predominantly large pharma customers, Dr. Thomas E. D'Ambra, AMRI chairman and CEO, says Excelsyn proved to be an attractive acquisition target for acquisition for several reasons, including the expansion of AMRI's small- and large-scale manufacturing business in Europe, which complements AMRI's existing discovery operations in Budapest; the increase in proximity to small- scale development and manufacturing customers who prefer to conduct early-stage development business closer to their operations; the enhancement to AMRI'ss ability to compete for intermediates business by being able to offer a more competitive cost solution; the addition of a turnkey operation; and opportunities to attract new and pull-through business to clients in the United States and other locations through established, positive relationships.
D 'Ambra says the acquisition of Excelsyn "builds out AMRI's global continuum spanning the United States, Asia and Europe, and is a significant milestone in its strategy to continue to expand our services platform and global footprint."
D'Ambra says the acquisition also enhances the company's ability to offer low-cost solutions at a time when cost has been become a major factor in outsourcing decisions, particularly in the large pharma sector.
"AMRI remains committed to generating significant value from this segment of our business. We believe this acquisition will increase our ability to penetrate a market space relatively untapped to date, including customers in large pharma based in Europe," D'Ambra says.
Excelsyn's production of chemical intermediates also made the company an attractive pick-up for AMRI.
"It was definitely a positive contributor to our decision to complete the acquisition, as it increases our ability to compete in the advanced intermediates business because of its lower/competitive cost structure, in comparison to our ability to do this work in the U.S.," D'Ambra notes.
Success of the acquisition, D 'Ambra notes, will be based on "our ability to make progress in achieving our growth strategy."
The acquisition of Excelsyn also expands AMRI's portfolio of development and large scale manufacturing facilities as well as its customer portfolio, with little overlap of customers between the two companies.
"We anticipate the time-to-transition to be minimal given the close alignment of company cultures, with a focus on the highest quality, customer service and commitment to excellence," says Dr. Steve Hagen, AMRI's vice president of pharmaceutical development and manufacturing.
Excelsyn CEO Ian Shott says his company is looking forward to joining the AMRI team.
"The similarities in both operations and company cultures create an even more compelling reason for our customers to continue to partner with the combined organization as their outsourcing provider of choice," he says. "We will continue to provide the high-quality services and products Excelsyn has built its reputation on, and we can now offer the expanded technologies, locations and cost structures that make AMRI the leader in the provision of integrated contract outsourcing."
The acquired Excelsyn site will be managed by Dr. David Rowles, who will report to Hagen. Rowles has been chief operating officer at the site since it became Excelsyn in 2004. Shott has accepted a consulting relationship and will continue to assist with customer relationships for the U.K. site and also work with AMRI's business development team to build further relationships for all of AMRI's locations with potential customers in Europe.