Ampac Fine Chemicals, a U.S.-based contract development and manufacturing organization (CDMO), has been sold to SK Holdings, an investment holding company of conglomerate SK Group of South Korea. According to the company, it is the largest M&A transaction to date in the Korean pharmaceutical industry. The Korea Herald said SK is paying $455 million for Ampac.

Established in the 1990s, Ampac Fine Chemicals (AFC) is a global supplier of high value-added active pharmaceutical ingredients (APIs) and intermediates in medical indications such as cancer, CNS, cardiovascular and anti-viral, having grown more than 15% a year over the past several years. 

AFC is strategically located with facilities on the west, east and south coasts of the U.S., providing services to a large number of pharma and biotech companies throughout the entire life cycle of their products.

With the rapidly aging population, the pharmaceutical industry is set to grow at 4% annually; however, leading CDMOs continue to grow at a much faster rate of approximately 16% annually. SK Holdings has identified pharmaceuticals as a growth engine.

“Pharmaceuticals is one of SK Holdings’ key pillars of growth and the acquisition of AFC is an important step towards becoming a global player in the market,” said Donghyun Jang, president and chief executive officer, SK Holdings. “AFC’s development and manufacturing capabilities and outstanding regulatory track record, evidenced by the fact that the California plant is utilized by the FDA as a training site, are an excellent complement to SK.”

Aslam Malik, chief executive officer, AFC, said, “We are excited to join SK Holdings. SK and AFC are highly complementary and together we will be able to offer our customers a much broader portfolio of offerings including a global supply chain. Together we will achieve SK’s goal of becoming a global top-tier CDMO.”

SK Biotek, a wholly-owned subsidiary of SK Holdings, has built a strong relationship with major global pharmaceutical companies since its inception in 1998 as an API manufacturer. Its portfolio of technologies includes the world’s first low-temperature continuous flow technology. The combination of SK Biotek’s presence in Europe and Asia and AFC’s presence in the U.S. will create a platform to become a global CDMO in the next 5 years.