B U S I N E S S F I R S T
A growing German health care company has agreed to buy a U.S. generic drug maker whose Grand Island facility recently disclosed plans to expand.
Fresenius SE said it will buy American Pharmaceuticals Partners Inc. (APP) for $3.7 billion in cash in a deal that will give the German company more opportunities in the North American market for drugs administered intravenously.
In the transaction, which is expected to be finalized at the end of 2008 or early 2009, Fresenius will pay $23 a share for the Schamburg, Ill.-based American Pharmaceuticals (Nasdaq: APPX),
Locally, APP disclosed in June that customer growth was fueling a $12 million expansion of its Grand Island plant, a move that could see the medical industry giant add 40 jobs to its 534-member workforce
The facility makes anesthetic and analgesic injectable products for patient and ambulatory care uses.
APP Pharmaceuticals, which was separated from former parent Abraxis BioScience Inc. last year, is working with Erie County economic development officials on an expansion plan that includes the acquisition of a neighboring facility on Staley Road, the Astellas Pharma Manufacturing Inc. plant.
It was not immediately clear, what if anything, the Fresenius acquisition of APP could mean to the proposed expansion.
APP said it would add operations at the Astellas Pharma property, which includes a 148,000-square-foot plant and 25 acres. Astellas is phasing out its operation and shifting some functions back to corporate headquarters in Japan.
Two years ago, Astellas employed 106 people on Grand Island, but has been gradually laying off workers. Astellas expected to be out of its plant by mid-2009, just as APP said it would gears up for its expansion.
APP in June was working on a series of incentives from the Erie County Industrial Development Agency and Empire State Development Corp.
In the Fresenius purchase agreement announcement last week, the companies said APP will be combined with the U.S. subsidiary of Fresenius Kabi.
The combined company will allow for the rapid globalization of APP's portfolio while at the same time providing a more comprehensive and complementary offering of injectable pharmaceuticals, devices and delivery systems to customers worldwide, the statement said.
APP employs some 1,400 workers and operates production facilities on Grand Island, in Puerto Rico, Toronto and Illinois. Its drug portfolio includes more than 100 products used for oncology, intensive care and anesthesia, along with fighting infections.
APP reported a pretax profit in 2007 of $253 million on sales of $647 million.
In a statement, Fresenius CEO Ulf Mark Schneider said "Our firm very much shares APP's dedication to quality and medical excellence for the benefit of patients. The acquisition provides significant growth opportunities for Fresenius Kabi."
He said the addition of APP will let Fresenius Kabi "market its product range in the U.S. Fresenius Kabi's international marketing and sales network will allow us to sell APP's products globally."
Fresenius employs more than 116,000 workers worldwide and last year posted sales of $17.9 billion.