Recipharm AB has signed two agreements to acquire Kemwell’s pharmaceutical contract development and manufacturing (CDMO) businesses with U.S. and Swedish operations, in a transaction valued at approximately $104 million. The transactions are expected to close during 2Q16.

These businesses had approximately $91.6 million in 2015 preliminary sales. The acquisitions add U.S. FDA and EU approved manufacturing operations and expanded capabilities in India, as well as established API and dose form manufacturing facilities in Sweden.

The U.S. development business is located in Research Triangle Park, NC and employs around 50 people. Services include development of inhalation, liquid, semi-solid, solid and parenteral products with emphasis on early formulation work as well as development of analytical methods and testing.

The Swedish business is located in Uppsala and employs around 210 people. It consists of two production units including a fully integrated primary and secondary manufacturing facility dedicated to a limited number of products, based on the same API and supplied essentially to one Big Pharma customer. There is also a small general pharmaceutical manufacturing unit with services including APIs, solids and semi-solid formulations.

Kemwell’s India business is expected to employ around 1,400 people at closing, and comprises both development services as well as commercial manufacturing of solid, semi-solid, liquid and topical dose products. The solid dosage plant has approvals from U.S. FDA and EU, among other regulatory bodies. The oral liquids production plant is specialized in automated high throughput large volume manufacturing, mainly for the Indian subcontinent. The development business offers services for formulation development, small-scale manufacturing for clinical trials, and analytical services.

Thomas Eldered, chief executive officer of Recipharm AB said, “These transactions represent a significant step in both the consolidation of the CDMO industry and the transformation of Recipharm into a global leader. We now have a U.S. footprint, which we can use to further penetrate the world’s largest pharmaceutical market and the business in Sweden provides us with several opportunities for synergies. When we receive the approval in India, Recipharm’s customers will have access to very cost effective development and manufacturing capabilities able to serve international markets including the U.S. I am extremely excited about these acquisitions and the benefits they will bring. The current managing director, Anurag Bagaria, and vice president of Corporate Development, Karan Bagaria, will continue in their current positions post closing and I am very much looking forward to working with them.”