This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: DSM, JLL Join to Create Pharma Company

NEW YORK ( The Deal) -- Dutch chemicals and nutrition company Royal DSM NV is to merge its pharmaceuticals division into a new entity majority owned by New York-based private equity firm JLL Partners Inc. to create a company valued at $2.62 billion.

DSM said Tuesday, Nov. 19, that it will combine DSM Pharmaceutical Products, or DPP, with JLL-backed Patheon Inc., after the new entity acquires Patheon for $9.32 per share in cash, or 64% above Patheon's closing share price Monday. The transaction values Patheon at about $1.95 billion, including debt, and DPP at $670 million.

JLL, which owns 55.7% of Patheon, will invest $489 million in cash in the new venture, while DSM will contribute DPP and receive a seller note of $200 million.

To fund the deal, JLL has committed financing for $1.65 billion from JPMorgan Chase & Co., UBS, Jefferies & Co., Morgan Stanley and KeyCorp.

The still-unnamed new entity will be 51% owned by JLL and 49% by DSM and be run by Patheon CEO Jim Mullen. It is projected to have 2014 sales of about $2 billion, with an 8,300-strong workforce in 23 locations across North America, Europe, Latin America and Austria.

The new entity will be a contract development and manufacturing organization selling finished dosages and drug products and active substances to customers in the pharmaceuticals, crop protection, personal care and fine chemicals products industries.

"Fully in line with our strategy, this is for DSM Pharmaceutical Products the perfect way to accelerate growth and for DSM to maximize value for this business," said DSM CEO Feike Sijbesma "With this partnership, DSM has made a key step in its strategic transformation of its Pharma activities into partnerships whilst creating maximum value for all stakeholders."

JLL Partners Managing Director Paul S. Levy led the deal for the buyout firm.

DSM shares rose 3.35% to €59.91 in Amsterdam, giving it a market value of nearly €10.9 billion. The stock is up 51.34% over a year ago. Patheon shares closed at C$5.95 ($5.70) in Toronto on Monday.

JLL Partners, which typically targets mid-market investments in North America, has committed about $4.2 billion across six funds, made its initial investment in Patheon in 2007. Patheon's board backs the deal, which was vetted by independent directors. The company is incorporated and traded in Toronto but has corporate head offices in Durham, N.C.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs