If you were looking for another SPAC deal this week, say no more. Procaps Group announced a reverse merger with Union Acquisition Corp. II (NASDAQ: LATN). Founded in 1977, Procaps is a leading integrated international healthcare and pharmaceutical company with a successful history of growth and diversification.
Procaps is the largest pharmaceutical integral CDMO in Latin America, and its proprietary portfolio of branded Rx and OTC products and services is sold, distributed, or provided to over 50 markets. It has six state-of-the-art manufacturing facilities in Latin America, including the first FDA-approved pharmaceutical plant in South America for selling Rx products into the United States. Procaps has more than 600 product launches estimated in the next three years. The company is on track to reach $436 million in gross revenue and $105 million in adjusted EBITDA in 2021. Procaps Group currently employs 5,000 people across 13 countries. The deal values Procaps Group at approximately $1.128 billion, or 2.91x 2020 revenue and 12.54x adjusted 2020 EBITDA. Approximately 44% of Procaps revenue in 2020 was from the U.S. market.
The acquisition also includes a $100 million PIPE that was raised from a broad group of Latin American investors, including pan-regional funds such as Compass Group and Moneda Asset Management, as well as Chilean-based Consorcio Seguros, among several other unnamed global and healthcare investors.
The new company is expected to have an estimated $300 million in gross cash proceeds. Current shareholders of Procaps will own approximately 71% of the issued and outstanding shares at closing. The combined company is expected to be listed on the Nasdaq Capital Market under the symbol PROC. The company’s M&A plan will focus on pharma and CDMO targets in order to capitalize on a fragmented but emerging market in Latin America. The deal is expected to close in the third quarter of 2021.