Clariant sells pharmaceutical chemicals division to TowerBrook Capital Partners

By E. Janene Geiss

Philadelphia, April 28 - Clariant announced Thursday the sale of its pharmaceutical fine chemicals unit to TowerBrook Capital Partners LP for a transaction value of about CHF 110 million.

The sale marks a further step in Clariant's strategy to focus its portfolio on core activities, officials said in a company news release.

The unit manufactures building blocks, regulatory starting materials, intermediates and active pharmaceutical ingredients for both the innovative and the generic pharmaceutical industry.

At the deal's completion, the new autonomous entity will be one of the world's largest businesses based solely on pharmaceutical fine chemicals with 2005 sales of about CHF 210 million and about 800 employees, officials said.

It will operate all manufacturing sites of the pharmaceutical fine chemicals unit and will be based in Frankfurt am Main, Germany.

The new entity has strong opportunities for profitable growth as a result of the restructuring efforts and the successful implementation of its new strategy in the pharmaceutical business, officials said.

As previously announced, new contracts with major customers were signed in recent months. For example, the unit was selected by Roche as a supplier for key materials in the manufacturing supply chain of Tamiflu, officials said.

The agreed selling price of CHF 110 million includes an earn-out participation of CHF 40 million. This earn-out participation, to be paid in two years, reflects the strong prospects of the unit, officials said.

The deal is expected to close in the second quarter, resulting in net cash proceeds of about CHF 40 million and a book loss of about CHF 80 million. All assets and personnel will be transferred and the business will be managed on a stand-alone basis, officials said.

TowerBrook is a private equity firm with more than $2.5 billion under management and offices in London and New York.

Clariant, based in Muttenz, Switzerland, is a maker of specialty chemicals.

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