Belgium's Fagron to expand into Mexico with Cedrosa buy

(Reuters) - Belgian pharmaceutical ingredients group Fagron NV said on Monday it was acquiring Central de Drogas, S.A. de C.V. (Cedrosa) in a 352 million Mexican pesos ($18.39 million) cash deal to expand further its presence in Latin America.

Fagron, which provides ingredients for pharmacies and hospitals to make medicines, and which operates in 35 countries, says the acquisition opens up the growing market for personalised medicine in Mexico.

“With its favourable demographics, a rapidly growing middle class and a focus on prevention and lifestyle, the Mexican market represents substantial growth potential for Fagron,” Chief Executive Rafael Padilla said in a statement.

Cedrosa, the Naucalpan-based supplier of raw materials to compounding pharmacies and the pharmaceutical industry, has a turnover of 480 million pesos and an EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 14.5 percent, Fagron said.

The total consideration for the acquisition is capped at 462.5 million pesos with the potential for an EBITDA-linked earn-out of up to 110.5 million pesos in cash over a two year period.

The transaction, which will be financed from Fagron’s existing debt facilities, is expected to close in the third quarter of 2019.

($1 = 19.1425 Mexican pesos)

Reporting by Pawel Goraj; Editing by Rashmi Aich and Louise Heavens