AptarGroup Inc. announced late yesterday that it has entered into an agreement to acquire 80% of the equity interests of Weihai Hengyu Medical Products Co., Ltd., a Chinese manufacturer of elastomeric and plastic components used in injectable drug delivery.
Headquartered in Crystal Lake, IL, Aptar designs and manufactures a range of drug delivery and consumer product dispensing systems. Aptar’s material science solutions and services serve a range of end markets including the pharmaceutical, beauty, personal care, home, and food and beverage sectors. This acquisition supports Aptar’s strategic priority to strengthen capabilities in high-growth economies such as China, said the news release. Moreover, it 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.
“This majority equity investment is a strategic step that strengthens our competitive position in Asia and in the high-growth injectable-drug-delivery market,” commented Aptar President and CEO Stephan B. Tanda. “This transaction will meet our disciplined investment approach, and Hengyu’s capabilities are complementary to our growing portfolio of injectable solutions.”
Aptar anticipates long-term sustainable growth in this critical application field in Asia, as more patients are prescribed medications in an injectable format for their safety, efficacy, availability, and affordability, added Xiangwei Gong, President of Aptar Asia
Wang Yingye, co-founder of Hengyu, stated, “Aptar is a world leader in drug-delivery solutions. Hengyu shares the same vision as Aptar — to be a drug-delivery expert, providing unique, high-quality products to the healthcare industry. We are excited to have Hengyu join Aptar’s significant manufacturing footprint in China and in Asia.”
Located in Weihai, a coastal city in Shandong Province in eastern China, Hengyu designs and manufactures elastomeric and plastic components used in injectable-drug-delivery systems. 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 2022. The purchase will be funded with available cash on hand, said the news release.