Cambrex branches out with $425M deal for Halo Pharma

By Eric Strauss
East Rutherford/Whippany | Jul 23, 2018 at 10:42 am

Cambrex Corp., the East Rutherford-based generic drugmaker, has agreed to acquire Whippany-based Halo Pharma for about $425 million in cash, it announced Monday.

Cambrex will buy the dosage form contract development and manufacturing organization, or CDMO, which is majority owned by funds managed by investment firm SK Capital Partners. The deal for the specialist in oral solids, liquids, creams and ointments will give it entry into the growing CDMO market, Cambrex added.

“We are excited to announce our acquisition of Halo, which underscores our commitment to providing comprehensive, best-in-class services to address the needs of our global pharmaceutical, biotech and generic customers,” Steve Klosk, Cambrex’s CEO and president, said in a prepared statement. “This acquisition opens a completely new segment of the market for Cambrex in finished dose development and manufacturing.”

Halo, which operates facilities in Whippany and Montreal, is expected to generate more than $100 million in revenue in 2018. The company’s 450 employees will join Cambrex’s 1,200 workers in the U.S. and Europe.

“This transaction affirms the reputation we have developed as a trusted CDMO with a strong track record of regulatory compliance and quality, technical expertise and growth,” Halo CEO Lee Karras said in a statement. “We are very excited to be joining the Cambrex team and look forward to growing the combine company together and providing our customers the expansion of services this creates.”

Cambrex will fund the deal with cash on hand and borrowing against its credit facility.

“We believe the combination of Cambrex and Halo will attract new customers to the combined company and allow us to more efficiently broaden our pipeline of products, while continuing to capitalize on the rapidly-growing pharmaceutical services market,” Klosk said.

The transaction is expected to be completed in the third quarter, pending customary approvals and conditions.

RBC Capital Markets LLC is Cambrex’s financial adviser, and Ropes & Gray LLP and Fasken are its legal counsel. Wells Fargo Securities LLC is lead financial adviser for Halo, with Mizuho Securities USA LLC serving as co-adviser. Morgan, Lewis & Bockius LLP is Halo’s legal counsel.

Eric Strauss | estrauss@roi-nj.com | acerimrat