How Does Grupo Somar Acquisition Reaffirms Procaps' Strategy To Strengthen Footprint In LatAm

Integrated LatAm healthcare and pharmaceutical company Procaps Group PROC has agreed to acquire Grupo Somar (including Grupo Farmacéutico Somar, Química y Farmacia, Gelcaps, and related entities) from Advent International, private equity.
Deal terms were not disclosed.
Grupo Somar is focused on developing, manufacturing, and marketing branded generic, private label, and OTC products targeted to the private market and offering CDMO services in Mexico.
Grupo Somar operates six modern production facilities (two of which manufacture Softgel capsules) in Mexico, including three FDA-approved plants with the ability to export to the U.S.
Grupo Somar generated approximately $184 million in net revenues.
The transaction gives Procaps entry into the second-largest pharma market in LatAm, increased manufacturing and R&D capabilities, (iii) diversified portfolio, and combined synergies.
Procaps expects to fund the cash portion in cash and incremental debt. Procaps has secured a fully committed bridge credit facility with Bank of America, JP Morgan, and Morgan Stanley in connection with the transaction.
The company closed the March quarter with a cash balance of $72.1 million.
The transaction is expected to close in Q4 of 2022.
Price Action: PROC shares closed 3.90% lower at $7.40 on Tuesday.