Clariant Sells Pharma Fine Chem Business

Clariant today announced the sale of its Pharmaceutical Fine Chemicals unit to TowerBrook Capital Partners, L.P. for a transaction value of approximately $86.8 million. The sale is part of Clariant’s strategy to focus its portfolio on core activities.  The unit manufactures building blocks, regulatory starting materials, intermediates and active pharmaceutical ingredients (APIs) for both the branded and the generic pharmaceutical industry. At the deal’s completion, the new autonomous entity will be one of the world’s largest businesses based solely on pharmaceutical fine chemicals, with 2005 sales of around $166 million and about 800 employees. It will operate all manufacturing sites of Clariant Pharmaceutical Fine Chemicals and will be headquartered in Frankfurt am Main, Germany.
 
According to a Clariant statement, the new entity has strong opportunities for profitable growth as a result of the restructuring efforts and the successful implementation of its new strategy in the pharmaceutical business. As previously announced, new contracts with major customers were signed in recent months. For example, Clariant Pharmaceutical Fine Chemicals was selected by Roche as a supplier for key materials in the manufacturing supply chain of Tamiflu.

The agreed selling price of $86.8 million includes an earn-out participation of $31.5 million. This participation, to be paid in two years, reflects the strong prospects of the unit, according to Clariant. The deal is expected to close in the second quarter after approval of the competition authorities, resulting in net cash proceeds of approximately $31.5 million and a book loss of approximately $63 million. All assets and personnel will be transferred and the business will be managed on a stand-alone basis.

Jan Secher, Clariant’s chief executive officer, said: “The Pharmaceutical Fine Chemicals business sharpened its strategy and improved its efficiency, enabling it to become one of the industry’s leading suppliers. As an independent entity supported by a committed investor, it has an excellent opportunity to perform well in the future. On the Clariant side, this is another important step in focusing our business portfolio on innovative applications with value-increasing service components.”

James Harrison, managing director of TowerBrook, said: “As a supplier to the pharmaceutical industry, the Pharmaceutical Fine Chemicals business is in an excellent position to benefit from the increasing trend towards outsourcing to specialist providers. Together with management, we plan to grow the business through new capital investment and through appropriate acquisitions.”