BY

SEQENSgroup

As announced on the 26th of August 2021, Eurazeo has finalized on Decembre 16th the sale of its stake in SEQENS to funds advised by SK Capital Partners (“SK Capital”), to Bpifrance, to Nov’ Santé Actions Non Cotées and to the company’s existing French shareholders: Mérieux Equity Partners, Ardian and Eximium.

SK Capital is a private equity firm specializing in investments in the specialty materials, chemical and pharmaceutical industries.

The Nov Santé Actions Non Cotées fund was launched at the initiative of the Fédération Française de l’Assurance and Caisse des Dépôts as part of its “Assureurs – Caisse de Dépôts Relance Durable France” investment program to support French healthcare companies in their development and is managed by Eurazeo.

BpiFrance is a public investment bank. It finances and supports companies – at every stage of their development – with credit, guarantees, innovation aid and equity capital.

The sale envisaged by Eurazeo concerns the pharmaceutical solutions business, CDMO, CH API, LSI and IVD (legal entities PCAS SA, VLG Chem, Novacyl, Uetikon, Protéus, PCI Synthesis, Yangzi Pharmaceuticals, Wuxi Pharmaceuticals, Novapex and H2B) and the specialty ingredients business, AS, CS, LSI, AD, Cosmetics and UP (legal entities Novapex, PCAS SA, ID BIO, Chemoxy, Novacid), i.e., 21 industrial sites, 7 R&D centers and nearly 3,000 employees on 3 continents.

The Mineral Specialties business, which includes the sodium bicarbonate, soda ash and sodium silicate production sites in Laneuveville-devant-Nancy (France), Nogent L’Artaud (France) and Jurong Island (Singapore), remains under LBO, with Eurazeo as main shareholder and Seqens’ historical shareholders.

Finally, the transaction also includes the combination of SEQENS activities with Wavelength Pharmaceuticals, a company owned by SK Capital since 2017, a key player in the development and production of generic active pharmaceutical ingredients and pharmaceutical intermediates.

As a result of these transactions, SEQENS is therefore emerging stronger and more focused, positioned as one of the world’s leading players in pharmaceutical solutions and specialty ingredients with €1.1 billion in revenues, 24 industrial sites, 10 R&D centers and 3,200 employees on 3 continents.  The company has a large product portfolio of more than 200 active pharmaceutical ingredients, 500 pharmaceutical intermediates, as well as key specialty ingredients and chemicals.

Eurazeo acquired a stake in SEQENS in June 2016 with the aim of accelerating the group’s innovation projects and strengthening its strategic positioning in the pharmaceutical markets.

Since June 2016, under the leadership of Eurazeo, Mérieux Equity Partners, Ardian and Eximium, SEQENS has strongly accelerated its R&D investments to now offer its customers a unique portfolio of technologies for the development and production of active ingredients and pharmaceutical intermediates.

Over the past five years, the group has also expanded its technological and industrial footprint through significative investments in all of its industrial sites and the completion of major external growth operations.

These projects have enabled SEQENS to become an integrated global leader in pharmaceutical solutions and specialty ingredients with €1 billion in sales, 24 industrial sites, 7 R&D centers and more than 3,000 employees on 3 continents.

The entry of SK Capital, Nov Santé Actions Non Cotées and Bpifrance in the capital of SEQENS will enable the group to accelerate its growth and consolidate its position as a leader in the development and production of active ingredients, pharmaceutical intermediates and specialty ingredients and chemicals.

Eurazeo announced that through the sale of its Seqens stake, it would make a 1.8x return on its initial investment, with potential earnouts that could result in a multiple of 2.0x, depending on the company’s future performance.

No further information is provided.

As a result of these transactions, SEQENS will emerge stronger and is now positioned as one of the world’s leading players in pharmaceutical solutions and specialty ingredients with €1,1 billion in revenues, 24 industrial sites, 10 R&D centers and 3,200 employees on 3 continents with a large product portfolio of more than 200 active pharmaceutical ingredients (APIs), 500 pharmaceutical intermediates, custom polymers and lipids as well as key specialty ingredients and chemicals.

With a strong culture of safety, quality and regulatory compliance and a robust, competitive, sustainable and reliable industrial footprint as well as dedicated best-in-class R&D capabilities, SEQENS proposes to its clients a wide range of products and services with 9 customer-oriented business units: R&D services (CRO), Innovative APIs, Generic APIs, Drug and Delivery Solutions, Consumer Health APIs, Life Science Inputs with essential pharma solvents, Custom Manufacturing as well as Specialty Ingredients for the pharma, cosmetics and electronics.

SEQENS is Customer centered company, committed to supporting its Clients development, investing in disruptive technologies on all its R&D centers and facilities (Flow Chemistry, HPAPI, Solid State, biocatalysis, multicatalysis, etc.) and leveraging on the group Environmental, Social and Governance Program launched in 2008 to always propose to its Customers the highest level of services as well as sustainable development and manufacturing capabilities all over the World.

SK Capital, Bpifrance, Nov Santé, Mérieux Equity Partners, Ardian and Eximium will support the management of SEQENS in accelerating the growth of the group while executing all the project launched on our facilities and R&D centers and consolidating the group leading position in the development and production of active ingredients, pharmaceutical intermediates and specialty ingredients and chemicals.

The Mineral Specialties business, which includes the sodium bicarbonate, soda ash and sodium silicate production sites in Laneuveville-devant-Nancy (France), Nogent L’Artaud (France) and Jurong Island (Singapore), remains under LBO, with Eurazeo as main shareholder and Seqens’ historical shareholders.

These activities generate annual sales of around €150 million and rely on the expertise of around 400 employees.

With the group’s very strong organic and external growth over the last five years in the pharmaceuticals, electronics and cosmetics sectors, the inorganic chemistry business has developed strongly but independently of the rest of the group and Eurazeo, with the agreement of the other shareholders of the Seqens group, has decided to sell only the pharmaceutical solutions and specialty ingredients businesses as part of a coherent and integrated whole.

Over the past five years, under the leadership of Eurazeo and the management, the Mineral Specialties business has:

  • accelerated their growth in the production of specialty bicarbonates for the buoyant pharmaceutical, hygiene, food and cosmetics markets in Laneuveville-devant-Nancy and in Singapore, where the new bicarbonate production unit, with a capacity of 70,000 tons per year, was inaugurated in August 2017;
  • launched their energy transition with a view to a definitive exit from coal planned for 2024 with (i) the completion of the Novawood biomass cogeneration project in July 2020, the construction of which is underway with industrial commissioning planned for mid-2022, (ii) the launch of the Novasteam project in 2018, the industrial commissioning of which is planned for 2024, and (iii) continued investment in energy efficiency and process improvements to reduce CO2 emissions (in particular with electrification projects).

Eurazeo intends to continue to develop the Mineral Specialties business in these two areas to strengthen its #2 position in the premium segments in Europe and Asia.

A support of the Seqens Group is planned for a maximum period of 2 years to ensure the continuity of the central services and thus accompany Mineral Specialties in the best conditions in the implementation of its carve-out.

Bpifrance and the Nov Santé Actions Non Cotées fund have decided to invest in Seqens alongside SK Capital and the existing French shareholders of Seqens.

The Health section of the Insurers-Caisse des Dépôts Relance Durable France investment program aims to strengthen France’s health sovereignty by investing in research, infrastructure, logistics and health services.

The three funds thus created, including the Nov Santé Actions Non Cotées fund, are dedicated to the health sector and provide financing primarily for (i) the relocation of research laboratories or drug production units; (ii) the development of services useful to health: personal services, home care, telemedicine; (iii) research, innovation and the development of drugs, technologies and devices for health; and (iv) disease prevention.

The Nov Santé Actions Non Cotées fund is intended to provide equity capital to some fifteen French small and mid-caps. The investment company Eurazeo has been selected to manage this fund.

The companies selected by the funds will have to increase their production capacity in France. The financing strategy will take into account the challenges of the health sector, their evolution over time and the dynamics of discovery.

As an integrated player in the drug production chain, from the production of intermediates to the production of active ingredients and from research and development to industrialization, Seqens launched in late 2020 and early 2021 numerous production projects in France and Europe for active ingredients and pharmaceutical intermediates and essential specialty ingredients.

This is why the French government, with BPI France and the Nov Santé Actions Non Cotées fund, have decided to support the realisation of our projects alongside SK Capital and thus enabling Seqens to continue its development in healthcare and speciality ingredients and to consolidate its position as a world leader in the production of APIs, pharmaceutical intermediates and high value-added speciality ingredients.

José Gonzalo, Executive Director of Direct Investment, confirmed it: “Bpifrance is proud to support SEQENS’ management team in its ambitious investment program for growth. SEQENS is a French industrial success story and a leading force in the pharmaceutical and specialty ingredient industries, with a strong footprint in France. Our investment is a demonstration of Bpifrance’s commitment to support this strategic sector.”

SK Capital, Bpifrance, Nov Santé Actions Non Cotées and the existing shareholders of Seqens – Mérieux Equity Partners, Ardian and Eximium, wish to support the current management of Seqens in accelerating the growth of the group and consolidating its leading position in the development and production of active ingredients, pharmaceutical intermediates and specialty ingredients.

This project will be that of the management of the Seqens group, which has been working for over 15 years, first with Bain Capital, then with Ardian and finally with Eurazeo.

And, as a result of these transactions, SEQENS is emerging stronger and is now positioned as one of the world’s leading players in pharmaceutical solutions and specialty ingredients with €1.1 billion in revenues, 24 industrial sites, 10 R&D centers and 3,200 employees on 3 continents with a large product portfolio of more than 200 active pharmaceutical ingredients, 500 pharmaceutical intermediates, custom polymers and lipids as well as key specialty ingredients and chemicals serving high-end markets such as pharmaceuticals, cosmetics or electronics.

With a strong culture of safety, quality and regulatory compliance and a robust, competitive, sustainable and reliable industrial footprint as well as dedicated best-in-class R&D capabilities, SEQENS proposes to its clients a wide range of products and services with 9 customer-oriented business units: R&D services (CRO), Innovative APIs, Generic APIs, Drug and Delivery Solutions, Consumer Health APIs, Life Science Inputs with essential pharma solvents, Custom Manufacturing as well as Specialty Ingredients and Chemicals serving high-end markets such as pharmaceuticals, cosmetics or electronics.

SEQENS is Customer centered company, committed to supporting its Clients development, investing in disruptive technologies on all its R&D centers and facilities (Flow Chemistry, HPAPI, Solid State, biocatalysis, multicatalysis, etc.) and leveraging on the group Environmental, Social and Governance Program launched in 2008 to always propose to its Customers the highest level of services as well as sustainable development and manufacturing capabilities all over the World.

SK Capital, Bpifrance, Nov Santé, Mérieux Equity Partners, Ardian and Eximium will support the management of SEQENS in accelerating the growth of the group while executing all the project launched on our facilities and R&D centers and consolidating the group leading position in the development and production of active ingredients, pharmaceutical intermediates and specialty ingredients and chemicals.

Over the past few years, in addition to acquisitions, the Seqens Group has launched a large number of growth and development projects for its value-creating activities at all its production sites and R&D centres.

The objective of the potential new shareholders – SK Capital, Bpifrance and Nov Santé Actions Non Cotées – is to pursue the growth of the group and to continue to invest sustainably in our R&D centres and production sites with a view to accelerating its growth and consolidating its position as a leader in the development and production of active ingredients, pharmaceutical intermediates and specialty ingredients

Regardless of the outcome of the transaction, all Seqens teams remain fully mobilized to continue to carry out our projects and our plans for continuous improvement of our production activities at all the manufacturing sites and R&D centers of the group.

“With the support of its shareholders, the group has become one of the world leaders in pharmaceutical synthesis. The massive investments made over the last five years in our plants, in R&D and in disruptive innovation allow us to offer the widest range of services and products on the market for the benefit of our customers. With SK Capital, supported by Bpifrance, Nov’Santé and our current shareholders Merieux Equity Partners, Ardian and Eximium, we will accelerate the projects launched in recent months and further strengthen our positions to support our customers worldwide in the development of their projects,” said Pierre Luzeau, President of SEQENS.

SK Capital is a private equity firm specializing in the specialty materials, chemicals and pharmaceuticals sectors.

SK Capital specifically targets investments where they can leverage their industry and operational experience to improve the strategic positioning, growth, cash flow and risk profile of companies.

SK Capital also has excellent knowledge of the production of active pharmaceutical ingredients and pharmaceutical intermediates. As an example, since November 2017, SK Capital has owned Wavelength, which develops and produces pharmaceutical intermediates and generic active ingredients, or SI Group, a global leader in the development and manufacture of performance additives and intermediates, with strong market positions in plastics, oilfield, rubber, fuels and lubricants, active pharmaceutical ingredients and industrial resins.

 We are very excited to have the opportunity to support SEQENS with our deep experience and relationships in the pharmaceutical and specialty ingredients markets. SEQENS is well regarded for its recognized know-how, capacity for innovation, global industrial footprint and broad portfolio of products and technologies. The potential combination with Wavelength will further extend these strengths to the benefit of both companies’ customers and employees. We are enthusiastic about the continuing commitment to SEQENS of its current shareholders, Mérieux Equity Partners, Ardian and Eximium as well as Bpifrance and Nov Santé, which will provide the company with a broad range of perspectives and capital sources to further its growth.” said Aaron Davenport, Managing Director of SK Capital.

The first synergy will be the merger with Wavelength Pharmaceuticals, a company owned by SK Capital since 2017, develops and produces pharmaceutical intermediates and generic active ingredients.

Wavelength supports a global blue-chip customer base and has a wide range of products developed and produced using its specialist manufacturing capabilities (including cytotoxic, steroidal and high potency products) and its core competencies in complex pharmaceutical synthesis.

The combination of the two companies’ activities will increase the group’s industrial footprint, product and technology portfolio, while preserving the know-how and skills of both companies for the benefit of their respective customers.

This transaction will have no impact on the name of the legal entities and therefore no administrative change is foreseen on the pharmaceutical regulatory dossiers.

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