Patheon and DSM complete $2.65bn merger to form private company 'DPx'
Plans for the merger were announced in November last year, but the deal only completed yesterday. Under the new structure Patheon's owner JLL Holdings has a 51% share in DPx with Royal DSM who controlling the remaining 49%.
The new company will consist of three businesses; fine chemicals and API production, operated under the brand DSM Fine Chemicals; pharmaceutical services (including contract manufacturing) to be run under the Patheon brand; and proprietary products and technologies falling under Banner life Science – acquired by Patheon in October 2012.
“We believe that combining the capabilities and experience of both Patheon and DPP [DSM Pharmaceutical Products] immediately positions us as the pharmaceutical industry’s partner of choice,” said Jim Mullen who takes the helm of CEO at DPx.
“Today we are better positioned to add scale, new value chain capabilities and technologies, as well as expand our end-to-end service offerings to our customers as a global, comprehensive solution provider to the industry.”
According to a report by Canadian Investment Bank BMO Capital, Patheon is currently the world’s largest pharmaceutical development services (PDS) provider and the third largest contract manufacturing organisation (CMO), with 2012 revenues from the latter business representing around 5% of the $13bn (€9.4bn) market.
With the addition of the DSM business, total revenue would push the new CMO into second position behind Catalent replacing either Famar or Aenova, which . For contract manufacturing, Patheon reported 2013 sales of $877m, up 44% on the year prior, while DSM reported revenue from its manufacturing services of $158m, up 5% year over year.
Last month, DSM said this growth showed the firm had “made significant progress” and “will support a good start for the value-creating venture with JLL Partners.”
DPx - consisting of 24 locations across North America, Europe, Latin America and Australia and employing over 8,000 employees - has predicted total revenue across all sectors to be around $2bn for 2014.