Merger Combines DSM Pharmaceuticals and Patheon

By Michael Abramowitz
The Daily Reflector

March 20, 2014 – A Pitt County industrial employer became stronger and broader in its range of capabilities and opportunities after a multi-billion-dollar merger with another industry giant, a corporate executive said on Wednesday.

Royal DSM, the global life sciences and materials sciences company, and private equity firm JLL Partners announced on March 11 the closing of a $2.65 billion transaction first announced in November.

The merger combines Greenville-based DSM Pharmaceutical Products and Patheon Inc. into a new privately held company, named DPx Holdings, with headquarters in Durham.

“I think this will enhance opportunities in Pitt County,” Hugh Welsh, DSM North America president, said. “We merged with Patheon because we saw this as a tremendous opportunity … for our employees currently working in the facility and those in the area who, in the future, might want to work there or provide services to it.”

Having a company headquartered in Durham rather than in the Netherlands will enhance daily operations, Welsh said.

“Having folks there whose day-in and day-out focus is pharmaceutical manufacturing will help the Greenville facility unleash its full potential, which might have been somewhat suppressed being part of a multi-national conglomerate,” the executive said.

Welsh said he and others at Royal DSM have already seen a lot of opportunities that were not available to the Greenville business that are now starting to develop as a consequence of the merger, from additional manufacturing for existing businesses to finding new opportunities that emerge from scale that didn’t exist in the past, he said.

The new independent company led by chief executive Jim Mullen is 51-percent owned by JLL and 49 percent by Royal DSM. Included in the DPx parent company are the business units Patheon, DSM Fine Chemicals and Banner Life Sciences.

There are no plans to change operations at the Greenville plant, Welsh said. The merger does not include or affect DSM North America’s separate Dyneema facility in Greenville, he said.

“DSM’s sterile and solid-dose manufacturing operations are complimentary to Patheon’s, rather than redundant,” he said. “For now, they will operate as they did the day before they closed the deal. Over time, I’m sure there will be some integration, but it’s too soon to tell what that will look like.”

No decisions have been made about adding or contracting the employee base at any of the new companies locations, including Greenville, Welsh said.

“The reason we brought these two businesses together was to grow; you can’t reach prosperity through cost-cutting,” he said. “We’ll see what happens over the course of the integration process, when new CEO Jim Mullen, sets the strategy.”

For now, company executives will deal with the immediate adjustments and employee anxieties generated from a transaction that switches from mega conglomeration on a multi-national scale to a more narrowly focused strategy led by a new person, Welsh said.

“That anxiety is just human nature, and I think a lot of it was resolved as soon as the deal was closed,” he said. Now, it’s just about getting everybody focused on the new way of working and the fact that this is a platform for growth and not a cost-cutting exercise.”

Mullen wasted no time addressing the forward direction that he and the company face.

“Starting today, we are better positioned to add scale, new value chain capabilities and technologies, as well as expand our end-to-end service offerings to our customers,” Mullen said in a corporate statement.

For more information, visit http://www.patheon.com/DPx.

Contact Michael Abramowitz at mabramowitz@reflector.com or 252-329-9571.