Siegfried to buy two Novartis sites
Siegfried has agreed to buy two drug product sites near Barcelona, Spain, from Novartis, in a deal expected to close by the end of 2020. Terms were not disclosed but Siegfried said that its sales should surpass CHF 1 billion in 2021, with the drug product operations “achieving the targeted critical size”.
The sites, at El Masnou and Barberà del Vallès (pictured), employ about 1,000 people combined. Both make oral solid dosage (OSD) forms and capsules used in inhalation devices, the former also specialising in ophthalmic steriles. Siegfried said that this complements ophthalmology and sterile filling at sites in the US and Germany, and strengthens existing OSD capabilities in Malta by adding large-scale capacity and capabilities for highly potent drug products and adding inhalation products to the portfolio.
CEO Dr Wolfgang Wienan commented: “This acquisition is perfectly in line with our corporate strategy, Evolve, and represents another major step towards our vision to create one of the most competitive integrated global networks in the CDMO industry.”
From 2021, Siegfried intends to transform these sites, currently captive manufacturing operations, into customer-facing CDMO platforms. This process will include a review of their operational efficiency. It also plans to invest into development capacity and capabilities to create a centre of excellence for their technology portfolio.
As part of the transaction, Siegfried has entered into various cooperation agreements with Novartis during the carve-out and post-merger integration phase. This includes multi-year manufacturing and supply commitments for Novartis products covering what Siegfried called significant volumes of products from both sites.
The deal was mostly funded from bonds and existing resources but EGS Beteiligungen, a subsidiary of Ernst Göhner Foundation, has subscribed to two hybrid convertible bonds of Siegfried Holding for CHF 80 million to part-finance the deal. It will be able to convert these into shares within five years, taking its stake in Siegfried to about 6.6%.