Combined Company to Begin Trading on the Nasdaq
Global Market® Under “PROC” and “PROCW” On September 30, 2021
Approximately $160 Million of Gross Proceeds
Strategically Positions Procaps, a Leading Global Pharmaceutical
Technology and Healthcare Company Based in Latin America, to
Accelerate M&A Roll-Up Initiative and Expand New Product
Categories in B2B & B2C Segments
Strong First Half 2021 Financial Results
Position Procaps to Achieve Prior Full Year 2021 Guidance of
Approximately $400 Million in Net Revenues and $105 Million of
Adjusted EBITDA
Procaps Will be Led by Ruben Minski, Founder,
Chairman of the Board and Chief Executive Officer of Procaps Group,
and Current Executive Team Including Global Chief Financial Officer
Patricio Vargas, President Dr. Camilo Camacho and Chairman of
M&A Committee Alejandro Weinstein
Procaps Group, a leading integrated international healthcare and
pharmaceutical company, and Union Acquisition Corp. II (NASDAQ:
LATN, LATNU, LATNW) ("LATN"), a publicly-traded special purpose
acquisition company, have completed the previously announced
business combination which was approved at an Extraordinary General
Meeting of LATN’s shareholders on September 22, 2021.
Beginning on September 30, 2021, Procaps Group’s ordinary shares
and warrants will trade on the Nasdaq Global Market under the
ticker symbols “PROC” and “PROCW” respectively.
The current Procaps management team, including Founder, Chairman
and CEO Ruben Minski, will continue to lead Procaps Group and
President Dr. Camilo Camacho and Global CFO Patricio Vargas will
help to spearhead Procaps Group’s organic growth strategy in its
B2B and B2C segments, while the vision and experience of the
Chairman of the M&A Committee, Alejandro Weinstein, will
support Procaps Group’s inorganic growth strategy, particularly in
Latin America.
This transaction values Procaps at approximately $1.1 billion
with approximately $160 million in gross cash proceeds. The
proceeds are expected to fund organic growth through capacity
expansion, plant improvements, working capital investments,
e-Health platform improvements and R&D expenses, as well as
inorganic growth via accretive acquisitions. The overall net
proceeds available to Procaps Group has been increased as a result
of IFC agreeing to reduce the amount of proceeds being used to
redeem its shares from a previously anticipated redemption amount
of $60 million to $45 million.
“We believe that today’s milestone combined with our strong
first half 2021 financial results will help accelerate the delivery
of our innovative pharmaceutical solutions and drive new expansion
initiatives that we believe will enable us to take a significant
share of the approximate $58 billion pharmaceutical market in Latin
America,” said Ruben Minski, Procaps Founder, Chairman and Chief
Executive Officer. “Procaps today is one of the fastest growing
companies in Latin America by product sales revenue with a 19%
year-over-year market penetration growth in the 13 markets in which
we operate and with a 50% cumulative growth in the Colombian
market. We are at an inflection point and the $160 million in new
capital now positions us to execute a multi-prong growth strategy
that we expect will deliver double-digit growth in our core markets
with strong cash generation to the bottom line.
“Moreover, this business combination will further enable our
significant focus on a strategic roll-up strategy and consolidation
in the region that we believe will drive an accelerated competitive
position and value creation. Combined with our ramp-up of new
product launches, continued roll-out of products into new
geographic areas and measured improvements to our inventory
rotations, we are confident we can achieve our global growth
objectives. In this next phase of our development, we expect to see
growth from both our existing portfolio and product pipeline, with
an estimate of over 600 product launches in the next three years.
As well, our global expansion strategy and growth in new markets
continues to be one of our primary focuses, with on-going efforts
to expand our footprint of successful products outside of Colombia.
The board of Procaps would like to thank the team at LATN and its
group of investors for the successful completion of the business
combination.”
Kyle P. Bransfield, CEO of Union Acquisition Corp. ll added, “We
congratulate Procaps on today’s accomplishment and look forward to
their continued evolution as one of the most important players
within the Latin American pharmaceutical market. We are confident
Procaps will provide shareholders with a diversified investment
alternative that supports today’s healthcare needs and accomplishes
this utilizing a sustainable footprint that we believe will deliver
long-term value. We look forward to collaborating with Procaps
Group as they strategically position the company to achieve its
growth objectives.”
Procaps Leadership Position as an Integrated
Pharma Company in Latin America is Demonstrated by:
- An established heritage as a 40-year family-owned Latin
American pharmaceutical company that has grown into a leading
integrated pharma company with a presence in 13 countries and
product reach in 50 markets modernizing oral drug delivery
technology and manufacturing capabilities.
- Its state-of-the-art manufacturing capabilities providing
innovative delivery technologies protected by an extensive IP moat
and supported by industry accolades such as the first FDA-approved
pharmaceutical plant in South America for selling Rx products into
the U.S.
- Its proprietary oral delivery systems allow Procaps to
transform branded generics into truly valued, differentiated
products including extensive scientific expertise developing more
than 150 new products per year.
- Internationally recognized as the largest pharmaceutical
contract development and manufacturing organization “CDMO” in Latin
America and top 3 globally in terms of volume of softgel production
capacity.
- Regional B2C leader in South and Central America, with six
manufacturing facilities in LatAm and 99% of its product portfolio
is proprietary.
- Global player in B2B with products sold and distributed in more
than 50 markets across the world.
- Culture focused on innovation, differentiation and brand
creation that employs over 4,700 individuals across 13 countries
with a strong history and focus on ESG principles including
resource-saving policies, HR and social programs and corporate
policies.
- Strong Financial Profile:
- LTM Adjusted EBITDA for the period ended June 30, 2021 was
approximately $97 million representing an LTM Adjusted EBITDA
margin of approximately 26%.
- Net Debt-to-LTM Adjusted EBITDA ratio of approximately 2.2x for
the first half of 2021.
- Procaps generated net revenue of $331 million and Adjusted
EBITDA of $85 million in 2020 and is on track to reach
approximately $400 million in net revenue and $105 million in
Adjusted EBITDA in 2021.
- Approximately 44% of Procaps gross revenue in 2020 was
USD-denominated.
- Growth Initiatives:
- In both its B2B and B2C segments, Procaps expects to see strong
growth across its existing portfolio and product pipeline, with an
estimate of over 600 product launches in the next three years.
- In its B2C segment, Procaps expects to see strong growth from
its existing portfolio and from new products focused on current
therapeutic areas, such as chronic diseases, pain relief,
immunology, cardiology, respiratory and dermatology, and the
internationalization of our existing portfolio, with on-going
efforts to expand its footprint of successful products outside of
Colombia.
- Robust inorganic growth strategy through established M&A
platform with a 40 plus year proven track record:
- Procaps Group positioned to capitalize on favorable regional
dynamics through M&A
- Emerging pharma markets are fragmented – 2nd & 3rd
generation families
- Synergies through innovation and economies of scale
- Sector expertise and technical knowledge
- Lower cost of capital and access to capital markets
- Alejandro Weinstein appointed Chairman of M&A Committee to
support Procaps Group’s M&A strategy in Latin America.
- Pharma targets in Mexico, Central America and the Andean
Region
- CDMO targets in the U.S., Mexico and Brazil
- Key development areas including telehealth and digital health;
expand ophthalmic products line and other select therapeutic areas;
and novel, orphan and oncological drug portfolios.
About the Transaction
The current shareholders of Crynssen Pharma Group Limited
(“Procaps”) will contribute all of their shares of Procaps to
Procaps Group, S.A. (“Procaps Group”) in exchange for Procaps
Group’s Ordinary Shares and, in the case of the International
Finance Corporation (“IFC”), one of Procaps shareholders, Procaps
Group’s Ordinary Shares and Redeemable B Shares. As a result of the
Business Combination, Procaps Group has received gross proceeds of
approximately $160 million, including in connection with an upsized
private investment in public equity (“PIPE”) of $100 million
committed by institutional investors. Key PIPE investors included a
broad group of Latin American investors, healthcare investors and
thought leaders. The IFC has also reduced the redemption of its
shares in Procaps Group from a previously anticipated $60 million
to $45 million, thereby resulting in an increase in the overall net
proceeds to help fund organic growth and consummate accretive
acquisitions.
Advisors
BTG Pactual acted as sole placement agent on the PIPE and
financial advisor to LATN. Cantor Fitzgerald acted as capital
markets advisor to LATN. Greenhill & Co., LLC acted as
financial advisor to Procaps Group. Linklaters LLP acted as U.S.
and Luxembourg legal counsel to LATN and Maples & Calder
(Cayman) LLP and Posse Herrera & Ruiz S.A. acted as Cayman
Islands and Colombia legal counsel, respectively, to LATN.
Greenberg Traurig, LLP acted as U.S. and transaction legal counsel
to Procaps Group and Arendt & Medernach SA, Camilleri Preziosi
Advocates A/C, Harney Westwood & Riegels LP, and Philippi
Prietocarrizosa Ferrero DU & Uría acted as Luxembourg, Malta,
Cayman Islands and Latin America legal counsel, respectively, to
Procaps Group.
About Procaps
Procaps is a developer of pharmaceutical and nutraceutical
solutions, medicines, and hospital supplies that reach more than 50
countries in all five continents. Procaps has a direct presence in
13 countries in Latin America and, as of December 31, 2020, had
more than 4,700 collaborators working under a sustainable model.
Procaps develops, manufactures, and markets over-the-counter (OTC)
and prescription drugs, nutritional supplements and high-potency
clinical solutions. For more information, visit
www.procapsgroup.com or Procaps Group’s investor relations website
investor.procapsgroup.com.
Forward-Looking Statements
This press release contains “forward-looking statements.”
Forward looking statements may be identified by the use of words
such as “forecast,” “intend,” “seek,” “target,” “anticipate,”
“believe,” “expect,” “estimate,” “plan,” “outlook,” and “project”
and other similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
Such forward-looking statements include projected financial
information, including 2021 net revenue, Adjusted EBITDA and
Adjusted EBITDA margin guidance; the expected gross cash proceeds
from the Procaps Group Business Combination and its effects on
expansion; expectations relating to capacity expansion, plant
improvements, working capital investments, e-health platform and
R&D expenses; expectations related to potential M&A
acquisitions; ; expectations relating to the growth of Procaps
Group’s B2B and B2C business; estimated product launches in next
three years; expectations relating to Procaps Group’s ability to
invest in growth through organic and inorganic growth;; and the
closing of the Business Combination transaction. Such
forward-looking statements with respect to the businesses of LATN,
Procaps Group, or Holdco, prior to or following the completion of
any proposed Business Combination, are based on current
expectations that are subject to risks and uncertainties. A number
of factors could cause actual results or outcomes to differ
materially from those indicated by such forward-looking statements.
These statements involve risks, uncertainties and other factors
that may cause actual results, levels of activity, performance or
achievements to be materially different from the information
expressed or implied by these forward-looking statements. Although
we believe that we have a reasonable basis for each forward-looking
statement contained in this press release, we caution you that
these statements are based on a combination of facts and factors
currently known by us and our projections of the future, about
which we cannot be certain. Forward-looking statements in this
press release include, but are not limited to: (1) the inability to
recognize the anticipated benefits of the proposed Business
Combination, which may be affected by, among other things,
competition, and the ability of the combined business to grow and
manage growth profitably; (2) the inability to successfully retain
or recruits officers, key employees, or directors following the
proposed Business Combination; (3) effects on LATN’s public
securities’ liquidity and trading; (4) the market’s reaction to the
proposed Business Combination; (5) the lack of a market for LATN’s
securities; (6) LATN’s and Procaps Group’s financial performance
following the proposed Business Combination; (7) costs related to
the proposed Business Combination; (8) changes in applicable laws
or regulations; (9) the possibility that LATN or Procaps Group may
be adversely affected by other economic, business, and/or
competitive factors; and (10) other risks and uncertainties
indicated from time to time in documents filed or to be filed with
the SEC by LATN. We cannot assure you that the forward-looking
statements in this press release will prove to be accurate. These
forward-looking statements are subject to a number of significant
risks and uncertainties that could cause actual results to differ
materially from expected results, including, among others, the
ability to complete the Business Combination due to the failure to
obtain approval from LATN shareholders or satisfy other closing
conditions in the Business Combination agreement, the occurrence of
any event that could give rise to the termination of the Business
Combination agreement, the ability to recognize the anticipated
benefits of the Business Combination, the outcome of any legal
proceedings that may be instituted against LATN or Procaps Group
following announcement of the proposed Business Combination and
related transactions, the impact of COVID-19 on Procaps Group’s
business and/or the ability of the parties to complete the Business
Combination, the ability to obtain or maintain the listing LATN’s
ordinary shares on Nasdaq following the proposed Business
Combination, costs related to the proposed Business Combination,
changes in applicable laws or regulations, the possibility that
LATN or Procaps Group may be adversely affected by other economic,
business, and/or competitive factors, and other risks and
uncertainties, including those included under the header “Risk
Factors” in the Registration Statement filed with the SEC and those
included under the header “Risk Factors” in the final prospectus of
LATN related to its initial public offering, as well as LATN’s
other filings with the SEC. Should one or more of these risks or
uncertainties materialize, or should any of our assumptions prove
incorrect, actual results may vary in material respects from those
projected in these forward-looking statements. We undertake no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
Accordingly, you should not put undue reliance on these
statements.
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version on businesswire.com: https://www.businesswire.com/news/home/20210929005947/en/
Procaps Group Investor Contact: Chris Tyson Executive
Vice President MZ North America Direct: 949-491-8235
PROC@mzgroup.us
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