Ares-backed pharma-services provider Alcami explores sale

  • Ares inherited Alcami via acquisition of American Capital
  • ~8 parties said to move forward in second round
  • Pharma-services firm expected to trade for >12x Ebitda

Alcami, whose outsourced drug-development services help pharma and biotech companies more quickly bring new products to market, is in the midst of a sales process, Buyouts has learned.

William Blair is conducting the auction for the contract development and manufacturing organization, according to five sources familiar with the matter.

Alcami, backed by Ares Capital‘s credit arm, is projecting about $55 million of pro forma adjusted Ebitda in 2018, up from about $50 million in 2017, some of the sources said.

Estimated 2018 revenue is about $265 million, one source said.

The company ought to fetch a multiple of Ebitda north of 12x and as high as 14x or so, two sources said.

The process has garnered significant interest from sponsors and strategic buyers, sources said. About eight parties are moving forward in the second round, one of the sources said, adding that at least some first-round bids in the $700 million range were submitted.

The pool of strategic suitors could include the likes of Carlyle Group– and GTCR-backed Albany Molecular Research, H.I.G.’s AMPAC, Cambrex, Thermo Fisher’s Patheon and Eurofins, sources suggested.

Ares inherited the portfolio company through its $3.4 billion deal for American Capital in January 2017.

Alcami was initially formed in October 2013, when American Capital acquired AAIPharma Services from Water Street Healthcare Partners and merged it with existing portfolio company Cambridge Major Laboratories.

American Capital committed $391 million to the combined entity in connection with the merger, having previously injected $212 million in CML in December 2012.

The marriage of the two companies created a platform offering various drug-development and project-management services under one roof, while also providing for diversified revenue streams.

Alcami ultimately helps small and midsized pharma companies reduce products’ time to market and navigate the FDA approval process more efficiently.

Its predecessor companies had very different offerings.

CML focused exclusively on developing active pharmaceutical ingredients, helping design and produce drugs for clinical use.

AAIPharma was already more of an integrated drug-development company, providing API manufacturing, dosage-formulation development, finished-product development and packaging, as well as a lab business offering analytical development and testing services.

Besides rebranding the two businesses, American Capital following the merger installed new members in the C-suite. That included hiring Stephan Kutzer as chairman and CEO. Prior to joining Alcami in July 2014, Kutzer was a longtime executive at Swiss chemicals and biotech company Lonza Group.

Alcami, which employs close to 900, has seven facilities across Wisconsin, Missouri, South Carolina, North Carolina, New Jersey and the Netherlands. Its executive offices are in Wilmington and Durham, North Carolina.

Representatives of Ares and Alcami didn’t return requests for comment, while a William Blair spokesperson declined comment.

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