South Korean investment firm SK Holdings got a start in contract manufacturing last year by snatching up a discarded Big Pharma plant in Europe. Now it has made a move on the U.S. with a deal to buy AMPAC, a contract manufacturer which among other things makes APIs for controlled substances.
The two companies announced the deal on Thursday but not the terms. SK said the acquisition gives it not only a U.S. base but also a well-positioned U.S. manufacturing network with facilities on three coasts. AMPAC Fine Chemicals (AFC) has plants in Rancho Cordova and El Dorado Hills, California; La Porte, Texas; and Petersburg, Virginia.
“AFC’s development and manufacturing capabilities and outstanding regulatory track record, evidenced by the fact that the California plant is utilized by the FDA as a training site, are an excellent complement to SK,” CEO Dong-Hyun Jang said in a statement.
Last year, SK Biotek celebrated being the first South Korean drug company to set up operations in Ireland at the API plant in Swords it acquired from Bristol-Myers Squibb. It took over the 360 employees who worked there and got a contract to continue to produce some products for Bristol-Myers.
The deal gave SK Holdings, which had 2016 revenues exceeding $120 billion, its start in contract manufacturing, a field it sees as feeding its growth. SK pointed out that the CDMO industry has been growing at about 16% the last several years, while AMPAC has racked up 15% annual growth.