SK Holdings acquires Ampac Fine ChemicalsSK Holdings, the investment arm of SK Group, decided to acquire a 100 percent stake in Ampac Fine Chemicals, a U.S.-based contract manufacturer of active pharmaceutical ingredients, at a board of directors meeting held Thursday.
The acquisition is expected to be finalized by the end of next month and the acquisition price is estimated at around 700 to 800 billion ($620 to $709 million) won according to industry insiders.
The decision came as SK hopes to make the biopharmaceutical industry its next cash cow following semiconductors. The global pharmaceutical market is growing by an annual 4 percent in a rapidly aging global society, according to SK.
The acquisition will also give SK three production facilities and one research lab within the U.S. As U.S. President Donald Trump has been pushing for regulations that mandate drug makers to produce drugs locally, the facilities will give SK a safe business ground in the U.S., according to industry analysts.
SK is expecting synergies between Ampac Fine Chemicals and affiliated SK Biotek, a contract manufacturer of active pharmaceutical ingredients used to produce chemical drugs, by sharing efforts in production, research and development as well as marketing and sales of drugs in global markets.
SK’s production capacity of pharmaceutical ingredients will also soar from 400,000 liters to roughly a million liters after the acquisition. By 2020, SK said the production capacity will increase to roughly 1.6 million liters as it plans to expand facilities.
The company said a successful post-merger integration after acquiring the Ireland manufacturing facility of Bristol-Myers Squibb last year helped it win the deal over other drug makers and private equity funds that wanted a stake in the company.
Ampac Fine Chemicals, founded in 1998, produces active pharmaceutical ingredients used for anticancer drugs as well as drugs for the central nervous system. Its business has been growing at an average 15 percent annually, SK said in statement.
BY KIM JEE-HEE [email@example.com]