Barranquilla-Based Procaps Lists On NASDAQ Via SPAC, Valued At $1.1 Billion USD

Barrranquilla, Colombia based Crynssen Pharma Group, branded as Procaps, has merged with Special Purpose Acquisition Company (SPAC) Union Acquisition Corp. II (NASDAQ: LATN, LATNU, LATNW) to become a publicly traded company on the US-based NASDAQ exchange, where it will trade as PROC and warrants will trade as PROCW. The merged company is named Procaps Group.

Procaps formulates and manufactures a broad line of prescription medicines and over-the-counter products with distribution in 50 countries, but a focus on Latin America. In addition to facilities in Barranquilla and Bogotá, Colombia it has production laboratories in El Salvador and Brazil. Procaps also provides outsourced drug development and manufacturing to other pharmaceutical companies, specializing in soft gelatin capsule technology.

40-year-old Procaps claims the first pharma plant in South America approved by the FDA for sales into the US.

The merger was approved on September 22 at an extraordinary general shareholder’s meeting, and shares began trading on September 30. This transaction values Procaps at approximately $1.1 billion with approximately $160 million in gross cash proceeds, which are expected to fund organic growth through capacity expansion, plant improvements, working capital investments, e-Health platform improvements and R&D expenses, as well as inorganic growth through acquisitions.

The current Procaps management team, including Founder, Chairman and CEO Ruben Minski, will continue to lead Procaps Group and President Dr. Camilo Camacho and Global CFO Patricio Vargas will help to spearhead Procaps Group’s organic growth strategy in its B2B and B2C segments, while the Chairman of the M&A Committee, Alejandro Weinstein, will support Procaps Group’s inorganic growth strategy, particularly in Latin America.

“We believe that today’s milestone combined with our strong first half 2021 financial results will help accelerate the delivery of our innovative pharmaceutical solutions and drive new expansion initiatives that we believe will enable us to take a significant share of the approximate $58 billion pharmaceutical market in Latin America,” said Ruben Minski, Procaps Founder, Chairman and Chief Executive Officer. “Procaps today is one of the fastest growing companies in Latin America by product sales revenue with a 19% year-over-year market penetration growth in the 13 markets in which we operate and with a 50% cumulative growth in the Colombian market. We are at an inflection point and the $160 million in new capital now positions us to execute a multi-prong growth strategy that we expect will deliver double-digit growth in our core markets with strong cash generation to the bottom line.

Procaps generated net revenue of $331 million and Adjusted EBITDA of $85 million in 2020 and is on track to reach approximately $400 million in net revenue and $105 million in Adjusted EBITDA in 2021.

“Moreover, this business combination will further enable our significant focus on a strategic roll-up strategy and consolidation in the region that we believe will drive an accelerated competitive position and value creation. Combined with our ramp-up of new product launches, continued roll-out of products into new geographic areas and measured improvements to our inventory rotations, we are confident we can achieve our global growth objectives. In this next phase of our development, we expect to see growth from both our existing portfolio and product pipeline, with an estimate of over 600 product launches in the next three years. As well, our global expansion strategy and growth in new markets continues to be one of our primary focuses, with on-going efforts to expand our footprint of successful products outside of Colombia. The board of Procaps would like to thank the team at LATN and its group of investors for the successful completion of the business combination,” continued Minski.

“We congratulate Procaps on today’s accomplishment and look forward to their continued evolution as one of the most important players within the Latin American pharmaceutical market. We are confident Procaps will provide shareholders with a diversified investment alternative that supports today’s healthcare needs and accomplishes this utilizing a sustainable footprint that we believe will deliver long-term value. We look forward to collaborating with Procaps Group as they strategically position the company to achieve its growth objectives,” said Kyle Bransfield, CEO of Union Acquisition Corp II.

BTG Pactual acted as sole placement agent on the PIPE and financial advisor to LATN. Cantor Fitzgerald acted as capital markets advisor to LATN. Greenhill & Co., LLC acted as financial advisor to Procaps Group. Linklaters LLP acted as U.S. and Luxembourg legal counsel to LATN and Maples & Calder (Cayman) LLP and Posse Herrera & Ruiz S.A. acted as Cayman Islands and Colombia legal counsel, respectively, to LATN. Greenberg Traurig, LLP acted as U.S. and transaction legal counsel to Procaps Group and Arendt & Medernach SA, Camilleri Preziosi Advocates A/C, Harney Westwood & Riegels LP, and Philippi Prietocarrizosa Ferrero DU & Uría acted as Luxembourg, Malta, Cayman Islands and Latin America legal counsel, respectively, to Procaps Group.

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