Report: PE firms are purchasing CMOs at a swift clip


Private equity companies see the sector as having a valuable ROI, according to study

The amount of acquisitions of pharma contract manufacturing organizations (CMOs) has been rising, and the most common type of acquirer is private equity (PE) firms, which view the sector as a prudent choice for a return on investment, according to GlobalData, a data and analytics company.

The company’s report, “M&A in the Contract Manufacturing Industry: Implications and Outlook – 2021 Edition”, explains that between 2018 and 2020, PE firms have shown a rapidly increasing level of investment in the CMO sector. PE firms acquired almost 70 pharmaceutical contract manufacturing companies, and PE-backed CMOs acquired eight during the 2018-2020 time frame. Private equity firms own many of the leading CMOs, including Recipharm, Cambrex Corp and PCI Pharma Services.

GlobalData’s report states that PE-backed CMOs will find they have a lot more financial support to add to their service offerings and value. All the top CMOs recently acquired by private equity firms were also active acquirers of other CMOs or contract manufacturing facilities.

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