This acquisition supports Aptar’s strategic priority to strengthen capabilities in high-growth economies such as China, and enhances the company’s ability to respond to changing local market needs, which include regional manufacturing, a well-integrated supply chain and close proximity to customers and their patients. By adding local manufacturing capacity, this acquisition positions Aptar to capitalize on the growth potential in the Asian region, while further strengthening the company’s ability to serve local and global customers in the injectable drug market with best-in-class products and services, competitive lead times and technical support, all while leveraging Aptar’s global network.
Commenting on the transaction, Stephan B. Tanda, Aptar President and CEO, said, “This majority equity investment is a strategic step that strengthens our competitive position in Asia and in the high-growth injectable drug delivery market. This transaction will meet our disciplined investment approach and Hengyu’s capabilities are complementary to our growing portfolio of injectable solutions.”
Added Xiangwei Gong, President of Aptar Asia, “Acquiring Hengyu will be another critical milestone in the execution of the Aptar strategy in Asia, which is targeting growth in all our core markets including the injectable drug delivery market. We expect strong and long-term sustainable growth in this critical application field in Asia as more and more patients are prescribed medications in an injectable format for their safety, efficacy, availability and affordability.”
Gael Touya, President of Aptar Pharma, commented, “We look forward to adding Hengyu’s manufacturing capacity, capabilities and expertise to our global manufacturing network to continue to be close to customers and their patients as they deliver critical life-saving and life-improving treatments every day. Together with the expertise of the Aptar Pharma and Hengyu teams, we will be establishing a new center of excellence in the region.”
Located in Weihai, a coastal city in Shandong Province of eastern China, Hengyu designs and manufacturers elastomeric and plastic components used in delivering injectable drugs. Hengyu was founded in 1998 and has approximately 150 employees at its facility in Weihai.
Under the terms of the agreement, Aptar will have the option to acquire the remaining 20% of the equity of Hengyu upon the fifth anniversary of the closing of the initial majority equity investment. The transaction is subject to customary regulatory approvals and is expected to close by the end of the third quarter of 2021. The transaction is not expected to have a material impact on adjusted earnings per share in 2021 or 20221. The purchase will be funded with available cash on hand.
1Adjusted earnings per share is a non-GAAP financial measure. Additional information regarding this measure is available on the Company’s website at www.aptar.com on the Investor’s page (click on Events & Presentations for a Reconciliation of non-GAAP Financial Measures).