Kohlberg and Mubadala sign a definitive agreement to acquire majority stake in PCI Pharma Services

Kohlberg is a leading private equity firm headquartered in Mount Kisco, New York with over 30 years of successful experience partnering with management and companies like PCI Pharma Services. Mubadala Investment Company (“Mubadala“), an Abu Dhabi-based sovereign investor, will also become a significant investor in PCI.

Partners Group, the global private markets investment manager, has agreed to the sale of its majority equity stake in PCI Pharma Services (“PCI” or “the Company“) on behalf of its clients and alongside its investment partners Thomas H. Lee Partners and Frazier Healthcare Partners. Following the sale to private equity firm Kohlberg and Mubadala, Partners Group will retain a meaningful minority equity stake in the Company. The terms of the transaction are not disclosed.

Headquartered in Philadelphia, Pennsylvania, PCI Pharma Services is a recognized industry leader and trusted partner providing a broad range of integrated pharmaceutical supply chain solutions from the earliest stages of drug development through to commercial launch, and delivering ongoing supply with global capabilities for drug development & manufacturing, clinical trials services and commercial packaging services. PCI spans a global footprint of 25 GMP facilities across six countries and employs ~3900 people worldwide.

PCI teams have embarked on a purposeful journey over recent years to transform the company by executing a successful growth strategy, providing customers with innovative and integrated supply chain solutions with the industry-leading customer experience by differentiating through investment in global capabilities, operational excellence, technology and our biggest asset, our talented people“, said Salim Haffar, PCI’s CEO, “and I am grateful for the support of our board and the director representatives from Partners Group, THL and Frazier.

Haffar continues, “Kohlberg brings considerable successful experience in the biopharmaceuticals and medical device areas, and I am thrilled to be continuing with them to accelerate the growth of our commercial, clinical trial services, and development manufacturing businesses under this new alliance. Both Kohlberg and Mubadala’s experience and track record in supporting successful management teams will make a great impact on PCI’s continued journey of transformation as we focus on building capabilities to support the future demands of our biopharmaceutical customers in our shared goal of bringing life changing therapies to patients worldwide“.

We identified PCI through our Outsourced Pharmaceutical Services White Paper, and our larger industry practice in Pharmaceutical and Medical Products & Services, as a best-in-class company led by a premier management team. We are honored to have the opportunity to work with Salim and his team on their next phase of transformational growth and value creation,” commented Chris Anderson, Partner of KohIberg.

KohIberg and Mubadala plan to partner with PCl’s management team, led by CEO Salim Haffar, to continue the Company’s transformation journey by adding specific capabilities and geographies organically and inorganically, to improve its customer service experience and enable its customers to bring life changing biopharmaceutical therapies to market. Leveraging the global growth trends in biologics and specialized drug therapies, future capabilities include sterile fill finish of injectables, expanding high potent and specialized manufacturing and further geographic expansion into Asia and greater Europe.

We are thrilled to be partnering with PCl’s world class management team, and we believe the partnership of Kohlberg, Mubadala and Partners Group is an optimal combination to support management’s acceleration of its growth and value creation pathways,” said Matt Jennings, Operating Partner of Kohlberg and future Chairman of PCI. “Salim’s inspirational leadership, clear vision for the future and focus on expanding customer experience gave us confidence in him and his management team, and the long-term future potential for the PCI business.

Camilla Macapili Languille, Head of Pharma & Medtech, Mubadala, said, “Outsourced pharmaceutical services has been a key investment theme for us over the past few years, and we are excited to be partnering with one of the global leaders in this industry. We have been particularly impressed by the quality and depth of PCI’s management team, as well as the company’s strong execution track record, impeccable values, and distinct vision for the long-term development of their business. We have strong conviction in the company’s growth trajectory and are committed to working with Kohlberg and Partners Group to ensure their long-term success.

Remy Hauser, Managing Director and Head of Healthcare, Industry Value Creation, Partners Group, states: “We are extremely proud of our work with PCI Pharma Services. Though the last few months have been immensely challenging ones, the COVID-19 pandemic has demonstrated the essential nature of the services that PCI provides to the pharmaceutical and biotech industry. On more than one occasion, PCI was the critical link in the supply chain responsible for ensuring life changing therapy reached those in need.

Sujit John, Member of Management, Private Equity Directs Americas, Partners Group, adds: “We initially identified PCI as a prospective investment via our Thematic Sourcing strategy, based on the strong fundamentals supporting outsourced pharmaceutical services. During our ownership, we were able to add significant value to the business through a combination of operational improvements and bolt-on acquisitions. PCI has a strong growth trajectory ahead and we are excited to contribute to that through our continued investment in the Company.

Todd Abbrecht, Managing Director and Head of Private Equity at THL said: “Supporting Salim and his team’s efforts to drive efficiencies while pursuing organic and acquisitive growth initiatives has fulfilled a key part of our value creation strategy. PCI is well positioned to continue its history of outstanding customer service and profitable growth.

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