Friendly takeover offer for Patheon values contract drug maker at US$1.4 billion

TORONTO – Patheon Inc. (TSX:PTI) has received a friendly going-private proposal that values the TSX-listed company at about US$1.4 billion, more than 50 per cent above its recent market price.

The offer of US$9.32 per share cash for minority shareholders is coming from a group backed by Patheon’s largest shareholder, U.S. private equity firm JLL Partners.

JLL and European life sciences company Royal DSM plan to combine Patheon into a new global contract drug manufacturer with 23 locations around the world and 8,300 employees.

The new company will be owned 51 per cent by JLL and 49 per cent by Royal DSM.

JLL Partners currently owns about 55.7 per cent of Patheon’s equity.

As a result, the takeover offer would cost about US$582 million cash to buy out shareholders other than JLL and its affiliates.

Patheon shares closed Monday at C$5.94 at the Toronto Stock Exchange, giving it a market value of C$837 million at the time.