GTCR, Carlyle in talks to acquire Albany Molecular Research, say sources: Reuters

Buyout firms GTCR LLC and Carlyle Group LP (CG.O) are in talks to team up and jointly acquire U.S. contract drug manufacturer and researcher Albany Molecular Research Inc (AMRI.O), people familiar with the matter said on Monday.

A deal would come amid a wave of dealmaking in the pharmaceutical contract manufacturing sector. Last month, medical instrumentation maker Thermo Fisher Scientific Inc (TMO.N) agreed to acquire contract drug manufacturer Patheon NV (PTHN.N) for around $7.2 billion.

Negotiations are ongoing, and there is no certainty that the talks will lead to Albany Molecular Research being taken private, the sources said.

The sources asked not be identified because the negotiations are confidential. Albany Molecular Research did not respond to a request for comment, while GTCR and Carlyle declined to comment.

Albany Molecular Research shares rose as much as 10 percent on the news. They were down 1.6 percent at $19.84 in afternoon trading in New York on Monday, giving the company a market capitalization of $830 million. Shares had already risen close to 50 percent since April 7, when Dealreporter reported that Albany Molecular Research was exploring a sale.

Headquartered in Albany, New York and founded in 1991, Albany Molecular Research offers a range of contract services for life sciences companies, from discovering new drugs to manufacturing products and active ingredients.

With around $570 million in 2016 sales, Albany Molecular Research is among the smaller players in the contract research and manufacturing sector dominated by giants such as Pharmaceutical Product Development LLC and Laboratory Corporation of America Holdings’ (LH.N) Covance division.

Earlier this year, Albany Molecular acquired Prime European Therapeutics SpA, also known as Euticals, in a deal worth around $358 million. It built out its presence in India and also strengthened its capabilities in the active pharmaceutical ingredients space.

Contract drug manufacturers can prove to be lucrative investments for private equity firms. Patheon, the company that agreed to be sold to Thermo Fisher, was controlled by buyout firm JLL Partners, which had taken the company public last year.

Last December, Swiss pharmaceutical supplier Lonza Group AG announced a deal to buy Capsugel, a U.S. maker of capsules and other drug delivery systems, from private equity firm KKR & Co LP (KKR.N) for $5.5 billion. KKR had acquired Capsugel from Pfizer Inc (PFE.N) for $2.38 billion in 2011.