Patheon, a Durham, N.C.-based provider of contract development and manufacturing services, has signed a definitive agreement with Vion, a global manufacturer of foodstuffs and ingredients based in the Netherlands, to acquire Banner Pharmacaps, a High Point, N.C.-based specialty pharmaceutical business dedicated to the research, development and manufacturing of unique gelatin-based dosage forms.

The acquisition will be structured as a purchase of all of the shares of the entities through which Banner conducts its operations, for a purchase price of $255 million, subject to working capital and other adjustments. The acquisition is subject to applicable regulatory approvals and other customary terms and conditions, and is expected to close by the end of calendar 2012.

Through the acquisition, Patheon will gain Banner’s High Point location, as well as research labs and manufacturing facilities in The Netherlands, Canada and Mexico.

"The acquisition of Banner advances our strategic plan put in place in 2011, fully aligning with Patheon's intent to be the leader in oral dosage development and manufacturing services,” said James C. Mullen, CEO of Patheon. “The transaction provides us with a well-balanced portfolio of proprietary products, state-of-the-art facilities with enhanced capabilities, as well as an expanded geographical presence. We believe our visibility within the industry will be further strengthened as we pass the $1 billion-revenue mark."

Peter Beckers, chairman of Banner Pharmacaps and executive board member of Vion, said, "Patheon shares many interfaces with Banner's field of activities and offers opportunities for further growth over the coming years. The sale of Banner is a strategic transaction for both organizations. It allows Vion to focus on its core business of food and ingredients, while aligning Banner with a global company that is known for its focus on quality and customer service in the pharmaceutical industry. We are convinced that this transaction represents the best outcome for Banner's customers, partners and for our people, who will benefit from the scale opportunities of being a part of an organization such as Patheon."

In support of the transaction, Patheon has received commitments for financing that will be applied to fund the acquisition and associated expenses, retire existing debt and used for general corporate purposes. Such commitments are subject to customary terms and conditions.

UBS Securities is acting as exclusive M&A advisor, and Reed Smith and Skadden, Arps, Slate, Meagher & Flom are acting as legal advisors to Patheon. Rabobank International and Rothschild are acting as exclusive financial advisors, and Becker, Glynn, Muffly, Chassin & Hosinski is acting as legal advisor to Vion.