Taking Pills From Newcastle

European private equity firm Silverfleet Capital is to invest in Aesica Pharmaceuticals, one of the UK’s fastest growing companies. Completion, which is subject only to obtaining clearance from the German authorities, is expected to occur within the next four weeks.

Headquartered near Newcastle, Aesica, we learn, has the expertise to both develop and manufacture primary (API) and secondary stage (finished product dosage forms) pharmaceuticals. Aesica partners with pharmaceutical companies throughout the key stages of a drug’s life cycle to supply product from the early stage through to final commercial supply.

Silverfleet Capital has agreed a majority investment with Aesica replacing that of LDC and members of Aesica’s Executive will reinvest a significant amount of money for a large minority stake. Debt is being provided by Lloyds, HSBC and Yorkshire Bank.

Aesica is described as one of the top 12 pharmaceutical contract manufacturers globally; it has manufacturing and development facilities in the UK, Germany and Italy and forecasts turnover in excess of €180m for 2011. The company’s proposition lies in its flexible and bespoke approach to service delivery, coupled with its ability to develop products from the initial clinical stage through to final commercial supply.

The company recently ranked number three in the Sunday Times Deloitte Buyout Track 100 for 2011, having grown every year for the last three years.

Silverfleet Capital describes healthcare as one of its core sectors. During the past 12 months the firm has realised returns from successfully selling Sterigenics International and European Dental Partners (EDP), two international healthcare businesses within its portfolio.  

Key to the success of both Sterigenics and EDP was the delivery of strong earnings growth through the successful execution of buy and build and roll out strategies which extended their international footprint.

Adrian Yurkwich, the partner at Silverfleet Capital with responsibility for healthcare who led the transaction, will join the board as a non-executive director. He comments: “Global outsourcing of pharmaceutical manufacturing was worth $44bn in 2010 and is forecast to grow at c.7% per annum for the foreseeable future. Aesica is in a strong position to benefit from that growth through further expanding its international footprint in Europe, the US and Asia and by increasing the number of strategic partners it works with.”

Dr Robert Hardy, CEO of Aesica, adds: “We have known the team at Silverfleet Capital for a number of years and chose them as our financial partner because of their deep knowledge of our market and their experience and successful track record of building global businesses of scale though buy and build strategies.

“Aesica is founded on over 30 years of pharmaceutical manufacturing expertise. Most recently the three recent acquisitions of manufacturing sites in Germany and Italy demonstrate our commitment to enhancing Aesica’s service offering to the global pharmaceutical and biotechnology industries. The support from Silverfleet Capital will prove invaluable as we continue to expand into new markets, evolve and grow.”

Also working on the deal for Silverfleet Capital were David Mackenzie, who joins the board as a non-executive director, and Joachim Braun from Silverfleet Capital’s Munich office.

 

Advisers:

Silverfleet Capital: Legal – Travers Smith; Due diligence – PwC.

Company:

Corporate finance – PwC; Legal – Ward Hadaway.