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LDC-backed Aescia completes European acquisitions

LDC-backed Aesica Pharmaceuticals has successfully completed the acquisition of three manufacturing sites in Germany and Italy from leading biopharma company, UCB.

Aesica was formed in September 2004 through a management buyout of a former BASF site in Cramlington, Northumberland, backed by LDC, which took a significant stake in the business and has continued to provide strategic and financial support.

To fund the acquisitions of the European sites in Monheim, Zwickau and Pianezza, additional debt facilities were provided by the Acquisition Finance team at Lloyds Bank Corporate Markets, which took the lead in a two bank club alongside HSBC Corporate Banking. This, and LDC’s continued backing, has given Aesica access to the capital required to support its ongoing programme of organic growth and complementary bolt-ons.

This deal demonstrates Aesica’s commitment to continually enhancing its service offering to the global pharmaceutical and biotechnology industries. It is the company’s first acquisition outside the UK and will almost double the capabilities of the business.

Moreover, the arrangement is particularly important to Aesica as it represents the beginning of a strategic partnership with UCB, which comprises a long-term supply agreement between both companies, providing a strong platform for Aesica to develop new business streams for the sites.

In addition to establishing a presence in Europe, the deal represents an extension to the current Aesica offer and technological capability. While Aesica currently offers extensive services in relation to the manufacture of formulated products, its move into Europe will enable it to enhance its injectables and oral liquid dosage capability, as well as introducing hard encapsulation technology to its service portfolio.

Furthermore, the sites at Monheim and Pianezza will bolster Aesica’s current packaging capabilities and the company will operate a line dedicated purely for the Japanese market, which is strategically vital as the company focuses on expansion across Asia.

Steve Harrison, director at LDC, says: “Over the years, with our ongoing support, Aesica has become a key performer in our portfolio, increasing its footprint with site acquisitions, extending its capabilities and capacity, and adding new products and customers to its portfolio. The business is now a global supplier to pharmaceutical and drug companies and we look forward to continuing our relationship with the experienced management team.”

Simon Dixon, associate director in the Acquisition Finance team at Lloyds Bank Corporate Markets, says: “The acquisition of UCB’s sites creates Aesica’s first manufacturing presence outside the UK. The deal will help the company extend its global sales coverage and will boost the firm’s already strong reputation in the market, which should lead to further opportunities for strategic bolt-ons. Aesica is a hugely experienced, well-invested customer with strong visibility of revenues, supported by key partnerships, and we are proud to be backing the firm as it looks to build on its success for the future.

“This transaction is a crucial step in Aesica’s strategic development and a real success story for Yorkshire and the North East’s corporate finance community. The company’s European expansion and ongoing development ambitions mark it out as one of the North East’s leading corporates and highlight the potential for similar mid-market manufacturing businesses in the region to grow through private equity investment.”

Tony Leech, HSBC Senior Corporate Banking Manager, North East, adds: “These are transformational acquisitions for Aesica, reshaping its footprint across Europe and broadening the opportunities open to the company. This latest strategic move highlights the quality of management behind this global business, and we look forward to supporting their enhanced European presence.”

Dr.Robert Hardy, Chief Executive, Aesica, says: “The acquisition of the three UCB manufacturing sites is strategically crucial for our business as we extend and enhance our current offering and establish a presence in Europe. We will fully utilise the expertise and knowledge across the current team at each of the sites to facilitate our continued expansion and to achieve our vision of becoming the number one supplier of Active Pharmaceutical Ingredients and Formulated Products to the pharmaceutical industry.

“We believe Europe will be a key market for us in 2011 and to have secured such high profile sites as well as agreeing a long-term strategic partnership to supply UCB, is testament to our commitment to being recognised as a leader in the industry. Our unique proposition lies in our flexible and bespoke approach to service delivery, coupled with our ability to develop products from the initial clinical stage through to final commercial supply. Furthermore, the long established and proven expertise we provide enables us to provide primary and secondary contract manufacturing services to the highest possible standards. By acquiring the sites in Europe we have not only almost doubled our workforce but we have gained new technological capability, which will further enhance and strengthen our unique service proposition.”

He concludes: “It is this full service offer and our dedication to exceptional service standards that truly sets Aesica apart from our counterparts and we believe we are now in a position to compete fully with the current market leaders.”

While all staff across the three sites have transferred to Aesica, a new team from the UK have relocated to aid the transition and direct operations at the sites. Simon Clough, who has been with Aesica for over three years has been appointed Managing Director, Formulated Products Business Unit and will lead the new team from his base at the Monheim site.

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