AMRI expects its $41M Cedarburg deal to pay off right away

AMRI ($AMRI) has wrapped up its $41 million effort to acquire contract manufacturer Cedarburg Pharmaceuticals, and the company says it's in line for an immediate windfall.

Integrating Cedarburg will contribute as much as $14 million to AMRI's 2014 revenue, the contractor said, leading to about $1.2 million in cost synergies and boosting earnings per share by about 7 cents. AMRI had previously guided for annual revenue of up to $267 million and a high-end earnings per share of 80 cents.

The deal is an effort to better cash in on demand for API production and contract manufacturing, and it's a reflection of AMRI's ongoing transition away from its royalty-reliant past. After posting a string of quarterly losses as it realigned its business, AMRI has soared on high demand for its large-scale manufacturing services, and the Cedarburg buyout is an effort to keep those revenues rolling, CEO William Marth has said.

And the move should help the New York company absorb an expected 29% decline in royalty revenue this year.

AMRI has spent the past few years building up its CMO capacity, and the strategy is already paying off: In 2013, AMRI pulled in $246.6 million in revenue on the year, a 9% increase over 2012, with net income coming in at $12.7 million to beat out the prior year's $3.8 million loss.

- read the statement

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