News provided by Fagron North America
AUSTIN, Texas, Feb. 2, 2022 /PRNewswire/ — FAGRON NORTH AMERICA HEADQUARTERS – Today, Fagron, the world leader in pharmaceutical compounding, announced it has reached an agreement to acquire Letco Medical (Wayne, PA). Letco is a supplier of pharmaceutical raw materials, equipment, and other materials that support compounding, with expected sales of approximately $40 million and EBITDA margin of around 11% in 2021. The acquisition price is $34 million.
Fagron Acquires Letco Medical
Fagron also sold 80% of its contract manufacturing business unit to a syndicate including Signet Healthcare Partners, Bionpharma, Inc and GMS Capital Partners LLC today. This business unit provides contract manufacturing and private label services for consumer healthcare companies and retailers in the United States and generates around $20 million in annual sales. The consideration for the divestment amounts to $6 million, of which $4 million in cash and $2 million in a seller’s note, and an additional $4 million in milestone payments.
Rafael Padilla, CEO of Fagron: “We are very pleased to acquire Letco. Together, our companies will form a strong combination with a broad product portfolio, a strong customer base and excellent growth opportunities. With the acquisition of Letco, Fagron strengthens its position in Brands & Essentials in the United States. This brings us a step closer to realizing our ambition to be the market leader in this segment in the countries where we operate. We look forward to welcoming the Letco employees to the Fagron family. At the same time, the divestment of our contract manufacturing business accelerates our focus on creating the future of personalizing medicine.”
Andrew Pulido, President, Fagron North America added, “Letco is a great addition to our Brands & Essential business in North America, with its complementary product portfolio. By combining our businesses, we are excellently positioned to grow further, provide opportunities for our employees, and offer industry leading service for both our customers and the millions of patients they serve each year. We can’t wait to get started with the combined team. The carve out of our contract manufacturing business unit allows us to focus on our core activities. We look forward to supporting the new company’s growth plans as minority shareholder.”
This mutually beneficial, customer-centric, combination increases accessibility to quality products and services that support the patient care needs of pharmacists across the U.S. “The acquisition of Letco further solidifies Fagron as the highest quality, most innovative, most customer centric compounding supplier in North America. We could not have found a better partner for our customers given Fagron’s global leadership position in driving the future of personalized medicine,” said Doug Bowman, CEO of Letco.
Fagron finances the acquisition of Letco from its own resources. As part of the divestment of its contract manufacturing business unit, Fagron will retain a 20% minority interest in the new company. Additionally, the new company will continue to manufacture certain supplies for Fagron.
Also, Fagron has reached an agreement with its banks to supplement the current €375 million sustainable syndicated credit facility with a new €105 million syndicated credit facility on similar terms as the existing facility.
As Fagron continues to grow, corporate social responsibility is at the heart of Fagron’s operations and strategy. Fagron’s products and services contribute every day to improving the health of people worldwide. Read more about Fagron’s ESG objectives for 2022.
Learn more about this acquisition and other business updates by visiting Fagron’s Investor Relations page today.
About Letco
Letco focuses on the U.S. compounding market and offers an extensive portfolio of chemicals, covering a wide range of therapeutic categories, as well as supplies, an extensive range of dosage forms and delivery systems, pre-made topical bases, capsules, and equipment.
Since its founding in 1993, Letco has built a reputation as one of the most innovative companies in the compounding industry. Letco is committed to the highest quality, which translates into industry-leading quality assurance programs, rigorous quality control procedures, and a good track record with the FDA.
About Fagron
Fagron is a leading global company active in pharmaceutical compounding, focusing on delivering personalized medicine to hospitals, pharmacies, clinics and patients in 35 countries around the world.
As a top-tier pharmaceutical supplier, Fagron North America is focused on personalizing medicine through investments in pharmacy essentials like raw materials, equipment, and supplies, genomics, technology, 503B outsourcing, and continuing education for pharmacists.
Belgian company Fagron NV has its registered office in Nazareth and is listed on Euronext Brussels and Euronext Amsterdam under the ticker symbol ‘FAGR’. Fagron’s operational activities are managed by the Dutch company Fagron BV, which is headquartered in Rotterdam.
