Silverfleet Capital completes exit of top tier CDMO business generating a 50% IRR and a 3.3x money multiple

The company

Aesica is a global contract development and manufacturing organisation ("CDMO") supplying products to many of the world's top twenty pharmaceutical companies. Aesica offers API development and manufacturing, formulation development and clinical trial supply as well as being a major supplier of finished dose manufacturing and packaging services.

The investment strategy

In October 2011 when Silverfleet Capital invested in Aesica, the company had already established a reputation for being a high quality CDMO partner to pharmaceutical companies. Having recently acquired two new facilities in Germany and one in Italy, to complement the three existing manufacturing locations in the UK, the company was well positioned to win new customers and contracts as part of the growing outsourcing trend in pharmaceutical manufacturing.

The most significant such development was when Aesica won a contract to produce a very significant volume of a tableted medication used to treat Type 2 diabetes in adults, a "blockbuster" product of one of the world's largest pharmaceutical companies.

Buy to build

The £30 million investment in Aesica's Queenborough site doubled the solid dose manufacturing capacity at that facility, and enabled Aesica to secure the ‘’blockbuster’’ contract. Final customer sign off of this expansion was received in early 2014.

The outcome

For the year ended December 2013 Aesica had sales of £179 million (a 16% increase from 2011) and an adjusted EBITDA of £20 million (a 27% uplift compared to 2011). The company's valuable strategic position in the CDMO sector combined with a strong financial performance attracted several strategic trade purchasers. Ultimately the international healthcare company Consort Medical plc tabled a very attractive bid of £230 million to acquire the business generating a 50% IRR and a 3.3 times multiple of Silverfleet Capital's original investment.