Canadian specialty pharmaceutical company Medicure Inc (TSX-V: MPH) has exercised its option to acquire a majority interest in Apicore Inc, a U.S. developer and maker of active pharmaceutical ingredients and pharmaceuticals. The US$33.25 million deal increased Medicure’s stake in Apicore to 64 percent. Winnipeg’s Medicure was backed by a $60 million term loan provided by Canadian specialty finance firm Crown Capital Partners and the Ontario Pension Board, an investor in Crown’s funds. Medicure bought a minority stake in Apicore in 2014 with the help of Signet Healthcare Partners and other investors.
Medicure Exercises Option to Acquire Majority Interest in Apicore
Closes Debt Financing with Crown Capital Partners for Apicore Purchase
WINNIPEG, Nov. 18, 2016 /CNW/ – Medicure Inc. (“Medicure” or the “Company”) (TSXV:MPH, OTC:MCUJF), a leading Canadian specialty pharmaceutical company, is pleased to announce that it and a newly formed and wholly owned Mauritius subsidiary have provided notice to certain investors in Apicore Inc. and Apigen Investments Limited (together “Apicore”) under Medicure’s option rights allowing for the acquisition of 4,717,000 Series A Preferred Shares and 1,250,000 Warrants in both entities for US$33,250,000, which would bring Medicure’s ownership in Apicore to 64% (or approximately 60% on a fully diluted basis). Medicure expects to close the acquisition of the majority position in Apicore by the end of November 2016, subject to regulatory approval.
Medicure’s initial ownership interest and option rights were obtained for its lead role in structuring and participating in a majority interest purchase and financing of Apicore that occurred on July 3, 2014. Medicure continues to have option rights until July 3, 2017 to acquire additional shares in Apicore.
Apicore is a private, New Jersey based developer and manufacturer of specialty Active Pharmaceutical Ingredients (“APIs”) and pharmaceuticals, including over 15 Abbreviated New Drug Applications (“ANDAs”), one of which, is partnered with Medicure. Apicore manufactures over 100 different API’s, including over 35 for which Drug Master Files have been submitted to the FDA and 12 that are approved for commercial sale in the U.S. by customers of Apicore. Apicore specializes in the manufacture of difficult to synthesize, high value and other niche API’s for many U.S. and international generic and branded pharmaceutical companies.
“Medicure is pleased to be acquiring a majority equity position in Apicore and looks forward to working to further increase Apicore’s value for all stakeholders, in particular Medicure’s shareholders.” stated Dr. Albert Friesen, President and Chief Executive Officer of Medicure. Medicure has a long term objective of identifying and advancing new products that are complimentary to the Company’s U.S. specialty pharmaceutical business, securing supply for potential new development products, and diversifying Medicure’s asset base within the pharmaceutical industry. Medicure’s business focus continues to be maintaining and expanding the sales of AGGRASTAT® (tirofiban HCl) in the United States.
The source of funds for the option exercise is a term loan agreement with Crown Capital Fund IV, LP, an investment fund managed by Crown Capital Partners Inc. (“Crown”) (TSX:CRN), in which Crown holds a 40% interest, for CDN$60,000,000, of which CDN$30,000,000 was syndicated to the Ontario Pension Board (“OPB”), a limited partner in Crown’s funds. The funds will be used to pay the option exercise price of US$33,250,000 as well as to refinance Apicore’s existing long-term debt. Under the terms of the loan agreement with Crown, the loan bears interest at a fixed rate of 9.5% per annum, compounded and payable monthly on an interest only basis, matures in 48 months, and is repayable in full upon maturity. Medicure has also granted 450,000 warrants to each of Crown and OPB. Each warrant entitles the holder to purchase one Medicure common share at an exercise price of $6.50 for a period of four years, subject to regulatory approval. PI Financial Corp. acted as an advisor to Medicure on the loan from Crown.
Apicore is a leading process R&D and API manufacturing service provider for the worldwide pharmaceutical industry. Apicore offers a wide portfolio of services ranging from manufacture of API’s for the generic industry to custom synthesis for early phase pharmaceutical research, and branded products. Apicore has 2 FDA-approved facilities. In the U.S., the Somerset, New Jersey facility can produce a few grams up to 200 kg volumes and in India, the Vadodara, Gujarat facility can produce a few kilograms up to 60 metric tons yearly. Both facilities are equipped with state-of-the-art analytical and research capabilities. For more information, please visit Apicore online at www.apicore.com.
Medicure is a specialty pharmaceutical company focused on the development and commercialization of therapeutics for the U.S. hospital market. The primary focus of the Company and its subsidiaries is the marketing and distribution of AGGRASTAT (tirofiban HCl) for non-ST elevation acute coronary syndrome in the United States, where it is sold through the Company’s U.S. subsidiary, Medicure Pharma, Inc. For more information on Medicure please visit www.medicure.com.
About Crown Capital
Crown Capital is a specialty finance company focused on providing capital to middle-market companies. Crown Capital provides structured and tailored financing solutions with minimal or no ownership dilution. These solutions allow client business owners to retain the vast majority of the economic rewards associated with their business, while providing Crown Capital with stable and predictable cash flows.
For further information: James Kinley, Chief Financial Officer, Tel. 888-435-2220, Fax 204-488-9823, E-mail: email@example.com, www.medicure.com.
Photo courtesy of Apricore Inc