Mid-market private equity firm LDC has exchanged contracts to sell its stake in pharmaceutical manufacturer Penn Pharmaceuticals in a GBP127million transaction with Packaging Coordinators.
LDC took a significant stake in Penn in April 2007, investing GBP33million in the business. The exit will deliver nearly a 3x return on its original investment.
Established in 1979 and headquartered in Tredegar in South Wales, Penn provides a selection of contract development and manufacturing organisation (CDMO) services to its customer base that comprises some of the world’s leading pharmaceutical and biotech companies. Its reach spans Europe, Japan and the US, and it provides direct access to the European market for its global customers.
In September 2013 the business opened a brand new GBP14million 15,000 sq ft, purpose built contained manufacturing facility in South Wales, investing in cutting edge technology, primarily to enable the development and manufacture of tablets and capsules containing highly potent compounds.
During LDC’s investment period, Penn’s annual turnover has increased from GBP17million to more than GBP30million for the financial year ended March 2014, with EBITDA up 51 per cent in the same timeframe.
The transaction was completed for LDC by Candida Morley and Peter Latham of LDC’s Bristol team.
Morley says: “Since investing in Penn, we have worked closely with the management team to enhance the business’ capabilities as a manufacturer of highly potent compounds. The new purpose-built facility in South Wales has enabled the business to compete more effectively on a global scale, thereby driving future revenue and shareholder value.
“This exit to Packaging Coordinators Inc highlights how private equity working in partnership with a high quality management team can help to grow a business, and ensure that it is strategically positioned to embark on the next phase of its development with the right buyer.”
Dr Richard Yarwood, chief executive of Penn Pharmaceuticals, says: “LDC’s support and strategic input to our business has been invaluable, and ensures that we are now well placed to embark upon the next stage of our growth plans. The deal with Packaging Coordinators Inc, represents a great outcome for our business, providing us with a solid platform from which to build further scale in the global pharmaceutical manufacturing market.”
