Royal DSM, a Dutch life sciences company with New Jersey operations in Parsippany and Belvidere, has formed a new company supplying the pharmaceutical industry through a $2.6 billion deal with New York private equity firm JLL Partners Inc.
The new company, projected to have annual sales of $2 billion, will be formed by combining DSM's Pharmaceutical Products division with Patheon Inc., a Canadian specialty pharmaceuticals manufacturer controlled by JLL. The unit will be owned 51 percent by JLL and 49 percent by DSM.
The new partnership is not expected to dramatically change DSM's New Jersey operations.
DSM board member Stephan Doboczky said about 40 New Jersey employees working for the company's pharmaceutical business will join the new company. Most of DSM's New Jersey work force is dedicated to its vitamins division.
Doboczky said a location for the new company will be decided by closing, expected in the first quarter of 2014. A name for the new company is expected in the coming weeks.
The new company will serve as a global contract and development organization for the drug industry, spanning large and specialty pharmaceuticals, biotech and generics.
Doboczky said the unit is a natural fit because DSM's group develops drug ingredients while Patheon specializes in finished dosages.
"By putting the two together, we have an enormous breadth of offerings," Doboczky said today. "There are no similar company in terms of breadth and depth. This is very unique."
At a time when cost-cutting pressure is forcing pharmaceutical companies to outsource supply and manufacturing, Doboczky said the new company provides stability in a fragmented space.
The new company is expected to have 23 locations globally and 8,300 employees. About one third of those employees will be based in North America, Doboczky said.
Patheon CEO Jim Mullen, former Biogen CEO, will lead the new company.