Advent International and Avista Capital Partners, two private equity firms with a strong healthcare focus, have agreed to acquire UCB’s U.S. specialty generics subsidiary, Kremers Urban Pharmaceuticals (KU). UCB is a multinational biopharmaceutical manufacturing company headquartered in Brussels, Belgium.
UCB will receive gross cash proceeds of $1.525 billion upon closing, subject to regulatory approval and other customary closing conditions. UCB plans to use the proceeds from this divestiture to reduce indebtedness and increase the company's capacity strategic investments, to further accelerate growth and/or to further strengthen its innovative medicines pipeline.
Over the past seven years, KU has diversified and grown its product portfolio from one major product to more than 20 marketed products across a number of indications, including gastroesophageal reflux disease, attention deficit hyperactivity disorder, angina/hypertension and respiratory disease. KU has established itself in the generic pharmaceuticals sector by focusing on high barrier to entry drugs with characteristics such as extended release formulas, unusual dosage forms such as patches, liquids and injectables and scheduled substances.
As part of the transaction, Brian Markison, currently a healthcare industry executive at Avista, will become president and CEO of KU, succeeding George Stevenson, who is pursuing other interests. Markison has more than 30 years of experience in the pharmaceuticals sector, most recently as president and CEO of Fougera Pharmaceuticals, a dermatology-focused specialty pharmaceuticals company spun off from Nycomed in 2011 and sold to Sandoz, the generics division of Novartis, in July 2012. Previously, he was chairman and CEO of King Pharmaceuticals.
“KU is a strong, specialty player in a rapidly growing and changing global generics industry, and we believe it will thrive as an independent entity as the adoption of generics continues to rise worldwide,” said John Maldonado, a managing director at Advent International. “We are excited to partner with Avista and the KU leadership team to position the company for continued long-term growth.”
“The KU team has a long track record of success, and we are excited to be a part of its bright future as an independent company,” said Sriram Venkataraman, a partner at Avista. “We are delighted to continue working with Brian Markison as well as the Advent team to drive growth at KU both organically and through additional acquisitions.”
“We believe Advent and Avista are best positioned to drive Kremers Urban’s growth to the next stage in the specialty generic market,” said Roch Doliveux, CEO of UCB. “UCB’s growing core business and rapidly progressing early and late stage pipeline now allows us to focus even more on innovative solutions in neurology and immunology.”
Advent and Avista both have extensive investment experience in the healthcare sector. Advent has invested in more than 30 healthcare companies worldwide over the past 25 years, with pharmaceuticals as a key sub-sector focus. The acquisition of KU will be the firm’s fourth pharmaceutical investment in the past three years following the purchase of three specialty pharmaceutical companies: Biotoscana in Colombia, Laboratorio in Argentina and United Medical (acquired by Biotoscana) in Brazil.
Avista has substantial healthcare expertise, having acquired or invested in 24 companies across the healthcare industry, with several notable transactions in the pharmaceutical sector including Acino Pharma, Fougera Pharmaceuticals, Lantheus Medical Imaging, Nycomed and Vertical / Trigen.
The transaction has been unanimously approved by UCB's board of directors and is expected to close by the first quarter 2015, subject to the satisfaction of customary closing conditions.