AMRI To Acquire Cedarburg Pharma For $38.2 Million

Albany Molecular Research, Inc. (AMRI) has announced that it has entered into a definitive agreement to acquire all outstanding shares of Cedarburg Pharmaceuticals, Inc. for a cash payment of $38.2 million. The transaction is valued at $41 million including $2.8 million in assumed liabilities.

AMRI is a global contract research and manufacturing organization that provides fully integrated drug discovery, development, and manufacturing services. Cedarburg Pharmaceuticals is a contract developer and manufacturer of technically complex active pharmaceutical ingredients (APIs) for branded as well as generic clients.

William S. Marth, president and chief executive officer at AMRI, said, “We are very excited to be joining efforts with Cedarburg as they bring a unique blend of expertise in complex API, a scalable business infrastructure and extensive customer relationships that will augment our existing capabilities and services. This transaction represents an important first step in building out our API capabilities, broadens our offerings and customer base and provides us with an ideal platform to pursue additional value creation opportunities.”

Cedarburg’s predicted full year 2014 revenue is estimated at $19 million with adjusted EBITDA of between $5.5 million and $5.7 million. The purchase price for the firm implies a multiple of about twice the year’s revenue and about seven times adjusted EBITDA at midpoint range. The EBITDA adjustment excludes any deal related expenses or purchase accounting impacts.

AMRI stated in its press release, “…Cedarburg Pharmaceuticals is a trusted, long-time partner to many of the industry's leading pharmaceutical companies and is well respected for its expertise in developing technically differentiated APIs, its reliability of supply and track record of quality. Cedarburg's core capabilities include controlled substances, steroids, prostaglandins, vitamin D analogs, conjugation chemistry and inorganics for the analgesic, ophthalmology and oncology therapeutic areas. Cedarburg has provided API development and manufacturing support for 13 approved products. Cedarburg's attractive development pipeline includes multiple late stage products and is expected to be an important contributor for future growth.”

The acquisition is expected to close in early April of this year. Cedarburg will continue to operate independently within AMRI’s API business unit.