CRO

Patheon buys softgel specialist for $255M

Patheon ($PTI) is looking to expand its softgel formulation business, spending $255 million on Banner Pharmacaps, makers of gelatin-based dosage forms.

The deal, expected to close by the end of the year, gives Patheon the world's second largest softgel business, bringing in Banner's four manufacturing facilities and all of its intellectual property. Banner's proprietary softgel formulations cover over-the-counter, prescription and nutritional consumer products, and Patheon CEO James Mullen said the acquisition fits his company's goal of becoming the leader in oral dosage development and manufacturing.

"The transaction provides us with a well-balanced portfolio of proprietary products, state-of-the-art facilities with enhanced capabilities, as well as an expanded geographical presence," Mullen said in a statement. "We believe our visibility within the industry will be further strengthened as we pass the $1 billion revenue mark."

Patheon has been in transition of late, selling off its secondary clinical packaging and clinical distribution services business last month after failing to find a buyer for its Swindon, U.K., plant. Mullen said at the time that Patheon needed to focus on its core CMO business, and the Banner buy falls right in line with that.

For $255 million, Patheon gets all of Banner's shares from parent company VION N.V., which operates out of the Netherlands. UBS Securities is advising the company in the acquisition.

- read Patheon's statement