Fagron expands with two acquisitions in APAC and Brazil

Investing.com -- Fagron has announced two new acquisitions, marking its second expansion in the Asia-Pacific region and strengthening its presence in Brazil.

The company acquired a non-sterile compounding business operating in Singapore and Malaysia, representing its second step into the APAC market following the earlier acquisition of Bella Corp. Additionally, Fagron made its second acquisition in packaging manufacturing in Brazil through Vepakum.

The combined businesses generate approximately €26 million in annual revenue with EBITDA margins higher than Fagron’s current group levels. The total purchase price of €55 million implies an entry multiple of roughly 8x EV/EBITDA, with derived EBITDA of €6.7 million, representing a 26% EBITDA margin.

On a pro-forma basis, these acquisitions will contribute approximately 3% to Fagron’s annual sales and about 4% to EBITDA. The initial value creation from the multiple play is estimated to be 1-2% of Fagron’s current market capitalization.

Fagron will finance the deals using available resources, with the transactions expected to have a small impact of approximately 0.2 percentage points on the company’s net debt to EBITDA ratio.

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