AlliedSignal to Acquire Pharmaceutical Fine Chemicals S.A.

The Specialty Chemicals business of AlliedSignal Inc. has entered into a definitive agreement to acquire Pharmaceutical Fine Chemicals S.A. (PFC) of Lugano, Switzerland from an investor group led by Donaldson, Lufkin & Jenrette's Merchant Banking Group. AlliedSignal expects to complete the purchase this month.

DLJ Merchant Banking Partners II, along with a PFC management team and other investors, acquired PFC, a producer and distributor of active and intermediate pharmaceutical products, in September 1997. The company's sales, which were $110 million in 1997, have been growing at a compound annual rate of 45% since 1993.

"Acquiring PFC significantly advances our growing presence in pharmaceutical fine chemicals," said Paul Norris, president of AlliedSignal Specialty Chemicals. "It greatly increases our cGMP (current Good Manufacturing Practice) production capacity, which will help to accommodate our increasing product development activities and also enable us to effectively address the pharmaceutical industry's growing trend toward outsourcing the production of bulk actives and intermediates."

Custom-made products and generic bulk actives together account for about $6 billion of the estimated $20 billion global pharmaceutical bulk actives and intermediates industry, and they have a combined annual growth rate of more than 10%. Norris noted that AlliedSignal's recent announcement follows a series of strategic acquisitions and expansions designed to make the company a leading player in the global pharmaceutical fine chemicals arena. The expansions include the 1995 acquisition of specialty chemical maker Riedel-de Hakn (Seelze, Germany) and the 1997 acquisition of Iropharm Ltd. (Arklow, Ireland), which manufactures under cGMP bulk active and pharmaceutical intermediates. An expansion of the cGMP development capacity of the Seelze facility was announced in March 1998.

PFC's products are used in such medications as anti-inflammatories, tranquilizers, diuretics and cardiovascular drugs. The company is the world's second largest producer of naproxen, a widely used analgesic sold under several trade names including Naprelan. The company also possesses chiral separation technology for the production of single enantiomer drugs.

Edited by Beth Brindle