Canadian Packaging

Pharma services company created in $2.6 billion transaction

By Canadian Packaging Staff   

General Canadian Pharmaceutical merger CDMO contract development and manufacturing organization DSM Pharmaceutical Products (DPP) JLL Partners NewCo Patheon Inc. Pharmaceutical merger Royal DSM

Combining DSM Pharmaceutical Products with Canadian firm Patheon creates new pharmaceutical global contract development and manufacturing organization.

JLL Partners, an American leading middle-market private equity firm, and Dutch multinational firm Royal DSM, the global life sciences and materials sciences company, have announced the creation of a new company to be provisionally called NewCo, which will be a leading global contract development and manufacturing organization (CDMO) for the pharmaceutical industry.

It will be 51 per cent owned by JLL and 49 per cent by Royal DSM.

The official name of the company will be announced in the coming months.

NewCo is formed by combining Royal DSM’s business group DSM Pharmaceutical Products (DPP) with Patheon Inc., a company incorporated in Canada, but with its headquarters in Raleigh, North Carolina, USA. It was founded in 1974 in Fort Erie, Ontario as Custom Pharmaceuticals Ltd.


NewCo will be a global contract development and manufacturing organization with anticipated 2014 sales of about US $2-billion (pro-forma) and a strong EBITDA and operational cash flow.

NewCo will have an end-to-end offering from finished drug products to active substances and a global footprint of 23 locations across North America, Europe, Latin America and Australia with about 8,300 employees.

Patheon is a leading provider of contract development and commercial manufacturing services to the global pharmaceutical industry, with a focus on drug products, having recorded revenues of US$943-million for the 12 months ending July 31, 2013. The company has around 5,900 employees.

DPP (DSM Pharmaceutical Products) is a leading provider of contract development and manufacturing services to the pharmaceutical, biopharmaceutical and agrochemical industries with a focus on drug products and APIs. In 2012 DPP realized net sales of US $734.6 million with around 2,400 employees.

With the combination of goods and services, NewCo will have a unique breadth of service offerings with a focus on drug products and active substances with a wide range of technologies and will be able to offer comprehensive end-to-end solutions to a broad spectrum of companies ranging from large pharmaceutical and biotech companies to specialty pharma companies, generics and emerging pharma companies.

The combined company will also become a leader in proprietary softgel formulations for over-the-counter, prescription and nutritional consumer products. The exclusive synthesis products and intermediates are targeted to the crop protection, personal care, and fine chemicals products industries.

Jim Mullen, who joined Patheon as it chief executive officer in 2011, will be appointed to the same position of NewCo upon completion of the transaction.

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