Clariant sells pharmaceutical fine chemicals business

Clariant is selling its pharmaceutical fine chemicals unit to private equity firm TowerBrook Capital Partners for a transaction value of approximately CHF110m (Euro 69.7m).

The sale marks a further step in Clariant's strategy to focus its portfolio on core activities.

The unit manufactures building blocks, regulatory starting materials, intermediates and active pharmaceutical ingredients (APIs) for both the innovative and the generic pharmaceutical industry. At the deal's completion, the new autonomous entity will be one of the world's largest businesses based solely on pharmaceutical fine chemicals, with 2005 sales of around CHF210m (€133.1m) and about 800 employees. It will operate all manufacturing sites of Clariant Pharmaceutical Fine Chemicals and will be headquartered in Frankfurt am Main, Germany.

The new entity has strong opportunities for profitable growth as a result of the restructuring efforts and the successful implementation of its new strategy in the pharmaceutical business. In recent months new contracts with have been signed with major customers were signed in recent months; for example, Clariant Pharmaceutical Fine Chemicals was selected by Roche as a supplier for key materials in the manufacturing supply chain of Tamiflu.

The deal is expected to close in the second quarter after fulfilment of local transfer requirements such as approval of the competition authorities. All assets and personnel will be transferred and the business will be managed on a stand-alone basis.

"As a supplier to the pharmaceutical industry, the pharmaceutical fine chemicals business is in an excellent position to benefit from the increasing trend towards outsourcing to specialist providers," said James Harrison, managing director of TowerBrook. "Together with management, we plan to grow the business through new capital investment and through appropriate acquisitions."