The merger is expected to be completed by the end of the month, and though financial details have not been disclosed, AAIPharma Services’ CEO Patrick Walsh told Outsourcing-Pharma.com a 100 day integration plan has been initiated with senior leadership organisational structure to be announced soon.
“Both CML and AAI possess experienced senior leadership and have shown strong performance of faster than market growth in their respective areas, resulting in a solid foundation for initiating integration activities,” he told us.
“The companies will continue to operate as centers of excellence in API, Analytical Services, and Finished Dosage Form development and Manufacture,” Walsh continued.
“With the expanded service offering of the combined companies, clients will have the option to utilise the entire suite of services, or take a more a la carte approach to individual services.”
In a recent report by Frost & Sullivan on the contract manufacturing organisation (CMO) industry, consolidation was seen as a continuous trend as companies look to improve depleting profit margins.
However, both companies involved in this merger have shown significantly high-growth recently, Walsh said. “AAI and CML provide solutions for more complex chemistries and compete in markets where growth and margins have been quite strong,” with AAI achieving an annual growth rate of 50% for the past two years, and CML upwards of 30% for the same period.
Furthermore, he added, the consolidation will aid clients by offering “an integrated CMC offering that saves development time, adds knowledge transfer, and provides strong quality/regulatory support for each step in their development process.
“It also enables those of our client base that are currently looking to streamline their supplier base an option to leverage our expanded footprint.”
Business Growth and Future
The merger comes nine months after Arlington Capital Partners bought Germantown, Wisconsin-based CML with a $212m (€158m). At the time the investor group told this publication it had been attracted by its chemistry capabilities and active pharmaceutical ingredient (API) manufacturing facilities, and was looking “to grow the business and accrue acquisitions.”
As for the merged company’s future strategy, Walsh said there would be continuous investment “in capital expansion of new capabilities that will further support the already robust service offerings of the company.”