California-based Questcor purchases Charlottetown pharmaceutical manufacturer
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A Charlottetown pharmaceutical manufacturer has been sold to a California-based company in a deal that could end up being worth $100 million.
Questcor Pharmaceuticals is in the process of finalizing a deal to purchase BioVectra, which will be worth $50 million when the papers are signed.
The other half is contingent on BioVectra's growth projections.
Ron Keefe, CEO of BioVectra, said Questcor is currently acquiring shares from the Charlottetown company.
"It's a good thing for our company at BioVectra. One of the things we've found over the years is we really need to access to capital if we are to continue to grow," Keefe said Thursday.
"In the past number of years we've probably invested close to $40-50 million in assets and that's basically been funded by shareholders and primarily internal cash flow.''
Keefe says whatever BioVectra has been able to generate in the past has been sunk into the business and bank financing.
He's confident they'll be able to grow enough to make the deal worth the full $100 million.
"We're expecting to grow by about 40 per cent in terms of revenue this year and we've increased our employment numbers."
BioVectra completed an $18 million expansion last year of its pharmaceutical manufacturing facilities and has grown from 140 employees to 185 workers in the past six to eight months. Plans are to add another 20 employees.
"We're growing very rapidly and, as you grow, one of the things you need is continued access to capital. This transaction really allows us to access capital that we would not otherwise be able to obtain other than through continued bank financing.''
Keefe said the sale does not affect the day-to-day operations at BioVectra.
"We maintain independence in terms of our operations. (We will have the) same management team, same employee group and that's extremely important to the purchaser and extremely important to us.''
Questcor wants to see the company grow on P.E.I. as well, Keefe adds.
"They'll pay us more if we do grow so it kind of works out very, very well for us and for the economy of P.E.I., quite frankly.''