Ashland to Acquire Ingredients Firm Pharmachem for $660M

A definitive agreement to purchase global ingredients firm Pharmachem Laboratories Inc. for $660 million was signed by Ashland Global Holdings Inc. on Monday, Covington, KY-based Ashland announced by press release.

"The acquisition of Pharmachem offers a number of exciting growth opportunities in higher-margin end markets while also strengthening our specialty product line," said William A. Wulfsohn, Ashland chairman and chief executive officer, in a statement. "This combination will enhance our position in fast-growing nutraceutical end markets, open a new opportunity within fragrances and flavors, and strengthen Ashland's food ingredient business by adding customized functional solutions."

New Jersey-based Pharmachem, a manufacturer and supplier of ingredients to the health and wellness industries and high-value differentiated offerings to fragrance and flavor houses, owns 14 manufacturing facilities in the U.S. and Mexico and brings in annual revenues of $300 million.

The ingredients company is a key supplier to the vitamin and dietary supplement market, with nutrition and health products making up 43% of its total sales, Ashland’s release said. Fragrance and flavor products account for 33% of the firm’s sales. Food, beverage, and personal care ingredients produced by the company are used in products sold through specialty retailers, multi-level marketers, and topical skin care and cosmetics. Pharmachem also offers custom manufacturing services including granulation, refining, and spray drying and operates one of the largest natural ingredient extraction facilities in North America.

“We were also extremely impressed by Pharmachem's world-class operations, leading market positions, dedicated employees and talented leadership team. In combining Pharmachem and Ashland, we can leverage our extensive sales channels, technical service network and global applications labs to accelerate Pharmachem's growth,” Wulfsohn said.

The transaction is subject to regulatory approvals and is expected to be completed by this June.

"This is a great strategic fit for Pharmachem as we look to build on our well-established track record of growth and financial performance," said Colin MacIntyre, Pharmachem chief executive officer, in the Ashland release. "We have the opportunity to create something unique in our industry by combining Pharmachem's custom manufacturing capabilities with Ashland's formulation knowledge and excipients expertise. Together we can drive the next phase of Pharmachem's growth while contributing to Ashland's vision of creating the world's premier specialty chemicals company."

Click here for information about the PBS Toronto event, May 16-18, 2017

For more articles, news, and equipment reviews, visit our Equipment Zones