Abu Dhabi’s Mubadala, PE Firm Kohlberg Take Over US Pharma Firm

Private equity operator Kohlberg and Abu Dhabi sovereign wealth fund Mubadala have taken controlling stakes in biopharmaceutical company PCI Pharma Services.

The two investors are purchasing the majority equity interest from private markets investment manager Partners Group, as well as its investment partners Thomas H. Lee Partners and Frazier Healthcare Partners, Kohlberg said last week.

Terms of the transaction were not disclosed. But Partners Group will hold on to a “meaningful” minority stake in PCI Pharma Services. Kohlberg Operating Partner Matt Jennings will also take over as chairman of the biopharmaceutical company.

“Outsourced pharmaceutical services has been a key investment theme for us over the past few years, and we are excited to be partnering with one of the global leaders in this industry,” Camilla Macapili Languille, head of pharma and medtech at Mubadala, said in a statement.

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“We have strong conviction in the company’s growth trajectory and are committed to working with Kohlberg and Partners Group to ensure their long-term success,” she added.

The Philadelphia-based pharmaceutical company has 25 production facilities in six countries and offers supply chain solutions for commercial drug development. It’s looking to increase production on injectables.

Kohlberg and Mubadala said they are looking to help the company expand manufacturing in Asia and greater Europe, where PCI last month said it will build a new clinic in Berlin to prepare for supply chain interruptions from Brexit.

In recent years, Mubadala has invested in other US biomedical firms. In 2018, the US$232 billion portfolio invested $132 million into Silicon Valley firm Outset Medical, which brings kidney dialysis treatments to homes.

Kohlberg was created in 1987 by Jerome Kohlberg, a founder of the PE titan KKR (then called Kohlberg Kravis Roberts & Co.) and his son James, who had been a KKR executive. Jerome died in 2015, and James is now the Kohlberg firm’s chairman.