Pact Group Holdings has announced it will buy specialty co-manufacturer Australian Pharmaceutical Manufacturers (APM) for $90 million.
The price represents a multiple of 6.5 times historical EBITDA.
Based in Victoria, APM is one of the largest providers of manufacturing and packaging services for nutraceuticals in Australia.
APM's manufactures tableting, encapsulation, and packaging solutions and produces vitamin and mineral supplements, herbal remedies, amino acids, and a range of other specialised formulations.
Pact Group’s MD and CEO Malcolm Bundey said APM operated in "a very attractive sector which is experiencing robust growth in demand both domestically and in export markets".
The acquisition of APM is a further step in the group's strategy to expand in specialised co-manufacturing.
It compliments and extends Pact's existing position established through the acquisition of Jalco in September 2015.
The acquisition will be funded by $75m of bank debt and a share issue of $15m.
It will be EPS-accretive in year one and will meet the company's target return hurdle of 20 per cent ROI in year three.
