International trade has always been a fine balance of opportunity and risk. The autumn edition of FD Gameplan explores what this means for FDs, with insight and acumen from leading business strategists, and actionable analysis from our own trade experts.
Find out more and inform your trade strategy today with FD Gameplan
With a network of corporate offices across the UK and the world, you can rest assured that we are not only nearby when you need us, but we also have the local knowledge to help your company’s success.
Our latest Business in Britain survey reveals growing economic confidence.
Read the full report >
Whatever your business goals and ambitions, we are committed to developing a strong working relationship with you and providing you financial solutions, based on understanding your needs.
Terms and Conditions for Products & Services
Our team of economic research experts provide in-depth analysis and reports on topical economic, financial and industry issues.
More information on Lloyds Bank online services
More information on Bank of Scotland online services
Newcastle-based Aesica Pharmaceuticals is well on the way to achieving its ambition to become the UK’s top supplier of active pharmaceutical ingredients (APIs) and formulated products to the pharmaceutical industry. “That’s our overarching vision,” says Chief Financial Officer Nick Jones. “We aim to be the partner of choice for our pharmaceutical customers.”
And his company’s impressive track record substantiates its ambition:
Aesica was established in 2004 following an MBO from BASF supported by Lloyds Development Capital. And with its acquisition of a single site technical centre at Cramlington, Aesica set its sights on becoming the number one contract manufacturing organisation to the global pharmaceutical industry.
In 2006, Aesica acquired a chemical manufacturing facility from MSD and a year later it bought a secondary manufacturing facility from Abbot Laboratories. At the same time, it opened a new API pilot plant at its Cramlington headquarters.
The company then focused on consolidating these acquisitions, but never lost sight of its strategic goals. “We knew the criteria we needed to meet if we were going to be the partner of choice for our customers,” Nick explains. “That doesn’t mean being the biggest or cheapest – it’s about providing value, reliability, quality and sustainable relationships. We were clear on what we needed to maintain those.”
The 2010 acquisition of Nottingham-based R5 was a crucial step in Aesica’s strategic plan. It gave the business the capacity and capability in formulation development to achieve the next stage of its growth. “It really was key to our growth plans,” admits Nick. “And that’s exactly when the value of your banking relationships is tested. We’d bedded in the previous acquisitions and we were ready to move up to the next phase of our growth plan. We went out to the market on that basis.
“Lloyds Bank had stayed close to us since the initial MBO in 2004, so they understood our business and knew what our plans were. They came to us with a market-leading, flexible package that re-financed our existing debt and gave us a £20m revolving credit facility to complete the deal with R5.”
With 95% of the company’s business from its UK base conducted overseas, Aesica’s next ambition was to secure operational locations in Europe. The opportunity came in 2011 when it bought two sites in Germany and one in Italy from UCB, Belgium’s largest pharmaceutical company. “It was a transformational deal for Aesica,” Nick recalls. “But we were really up against the wall with the timescales being demanded by UCB. We needed committed funds from the Bank – and they delivered. You can’t ask for more.”
From a single site in 2004, Aesica has grown into an international, multi-site, multi-customer business. Turnover has risen from £25m to over £150m. And the business remains hungry to meet its goals and maintain its strategic vision. And the company is confident of its scope for further growth with a customer base that seeks the quality and certainty of supply for which Aesica is now known. “We currently have sales offices on the US east and west coasts,” says Nick, “plus a sales and sourcing office in Shanghai. Our next steps are to secure manufacturing assets in North America and Asia. “The industry is growing. There’s increasing demand from the emerging economies. Our customers want us to be in those markets and we want to meet those customer needs.”
Aesica’s tremendous growth story continues. In its latest chapter, Lloyds Bank’s Acquisition Finance team has acted as lead arranger providing a package of senior debt and a revolving credit facility to support Silverfleet Capital in replacing LDC as majority shareholder. Simon Dixon, Director of Acquisition Finance at the Bank, sees great potential in the new deal: “Aesica is a pioneer in a growing market, demonstrating the positive effect that private equity ownership can have on a business. Our continued support alongside Silverfleet gives Aesica a firm basis for further expansion.”
The Bank’s Acquisition Finance team has created an enviable reputation, delivering over 500 transactions in the past five years, despite challenging economic conditions. Financing transactions ranging in size from £2m to some of the largest deals to come to market, the team has developed close relationships with the private equity community.It’s this commitment and expertise that has seen Acquisition Finance named Debt Provider of the Year for four years running, as well as Leverage Finance House of the Year for the last two years in succession. “We’ve remained strong and active where some of our competitors have pulled back,” Simon concludes. “Our teams of experienced dealmakers have a local presence throughout the UK, which means that we can offer flexible, innovative transactions to help support business growth.”
There are a number of ways you can share this article.
Longview Winter 2011-2012, 25/01/2012
Longview Summer 2011, 25/01/2012