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Done deal: Durham’s Quantum Pharma extends manufacturing operations with £9.34m acquisition

Pharmaceutical manufacturer Quantum Pharma Plc has announced the acquisition of NuPharm Group Limited for £9.34m.

Already acquiring pharmaceutical company Lamda earlier this year, the Durham-based company also adds NuPharm Group’s trading subsidiary, NuPharm Laboratories Limited, to its expanding operations.

The deal, paid in cash on completion, represents a key milestone in the company extending its manufacturing capabilities which have, until now, been limited to the production of single, bespoke formulations that are made-to-order.

Andrew Scaife, Chief Executive Officer of Quantum Pharma Plc, explains: “Building upon the successful acquisition of Lamda earlier this year, the acquisition of NuPharm represents a further important and exciting milestone for the Group as it significantly accelerates its strategic growth plan, further strengthening the business for the medium and long term.”

NuPharm is a UK-based, outsourced manufacturer for solid and liquid dose small batch-made specials and niche licensed pharmaceutical products, operating from facilities in North Wales and generates around £3.85m in revenue per year.

Quantum has secured new banking facilities with Royal Bank of Scotland and Lloyds Bank plc, comprising a term loan of £25m and a revolving credit facility of £10m, to help finance the deal. This facility replaces the existing £15m term loan.

Andrew Scaife added: “The addition of NuPharm to the Group will be earnings enhancing from early 2016 after a period of integration, operational and quality process improvements and system investment in the second half of this year.

“NuPharm adds further vertical integration to Quantum, provides the Group with a ready base of additional customers and as well as additional capabilities extending from research and development through to bespoke and batch manufacture of both unlicensed and licensed medicines.”

“This acquisition will further enhance our product offering and broaden our product range. In addition, the new debt facilities put Quantum in a strong position to accelerate the growth of the Group over and above the NuPharm acquisition.”

KPMG’s deal advisory teams in the North provided corporate finance and transaction services on the deal.

Michael Downes, Associate Director Corporate Finance at KPMG in Newcastle, said: “You only have to look at the growth trajectory of Quantum Pharma over the past few years, and the success it has had since its listing, to know that it is a business with strong ambitions and direction. For NuPharm, becoming part of that journey represents an exciting opportunity to further leverage its world-class team and manufacturing capabilities.”

The acquisitions of Colonis (at the time of flotation), Lamda and NuPharm reportedly position Quantum strongly for future growth and the firm will focus on investing in and developing these opportunities in the current year.