Procaps acquires Grupo Somar to strengthen its operations in Mexico

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Procaps acquires Grupo Somar to strengthen its operations in Mexico

The pharmaceutical conglomerate Procaps announced the reaching of an agreement with Advent International to acquire the Somar Group and, in this way, strengthen its physical presence in Mexico and continue to position itself in Latin America as one of the most important organizations in this industry.

in this transaction was included, in addition to the Somar Pharmaceutical Group, Chemistry and Pharmacy, Gelcaps and related entities. Until now, all of this was owned by Advent, which is one of the largest private equity investors in the world.

Ruben Minski, CEO of the Procaps Group, explained that the importance of this transaction lies in the fact that Somar is an integrated pharmaceutical company focused on the development, manufacture and marketing of high-quality generic, private label and OTC branded products, aimed at the market. private and offering CDMO services in key market segments in Mexico.

Likewise, he highlighted that has a diversified portfolio of products in key categories and has strong R&D capabilities and manufacturing, operating six modern production facilities (two of which manufacture softgel capsules) in Mexico, including three FDA-approved plants with the ability to export to the US.

Procaps- Photo: Procaps

“We believe that the diversity of Grupo Somar’s innovative product portfolio, along with its technical and management capabilities, will help accelerate the growth of Grupo Procaps’ sales and profit results in the near future,” said this businessman.

With a highly experienced management team that has driven solid operating and financial performance in recent years, Grupo Somar is well positioned to capitalize on the positive momentum the Mexican market is going through and maintain consistent growth in its different lines of business.

Grupo Somar generated approximately US$184 million in net income.

“With this acquisition, the Procaps Group continues to diversify its products and geographies and strengthen its leadership in innovative pharmaceutical solutions for oral administration. We are excited to finally have a physical presence in Mexico, a country we have admired for many years and it is an achievement we have been persistently working on. This announcement marks a milestone in the 45-year history of our Organization”, added Ruben Minski.

Procaps representatives recalled that precisely achievements such as the one announced today were the reason why they went public in 2021. During this announcement, they highlighted the importance of this type of acquisition, which they stated will become a beacon of development for Colombia and Latin America in general.

For his part, Alejandro Weinstein, president of the Mergers and Acquisitions Committee of Grupo Procaps, added that Grupo Somar represents a step forward in its regional consolidation strategy, expanding the scope they have in Mexico, anticipating that it will represent approximately 30% of the total revenue of the combined companies, with the expectation of growing even more.

“We believe that the combination of Grupo Somar and Procaps furthers its position as a leading pan-regional integrated pharmaceutical company in Latin America and represents a unique opportunity to realize not only significant innovation capabilitiesbut also synergies through cross-selling opportunities and cost efficiencies”, said this entrepreneur.

Acquisition highlights include entry into the second largest pharmaceutical market in Latin Americaincreased manufacturing (including softgel capsules) and R&D capabilities, a diversified portfolio and synergies combined with a potential net present value between 25-40% of the total purchase price.

Procaps expects to fund the cash portion of the consideration with a combination of cash from its balance sheet and incremental debt. In connection with the transaction, Procaps obtained a line of credit bridge fully committed to Bank of America, JP Morgan and Morgan Stanley.

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