EuroAPI Advances Restructuring Plan with Divestment of UK Facility
EuroAPI, a Paris-based contract development and manufacturing organization (CDMO), has taken a significant step forward in its four-year restructuring plan by selling its Haverhill manufacturing facility in the United Kingdom to Particle Dynamics. This move, part of the company's FOCUS-27 transformation strategy, aims to optimize EuroAPI's industrial footprint and enhance operational efficiency.
Divestment Details and Strategic Implications
The sale of the Haverhill plant, which generated approximately 35 million euros ($41.3 million) in net sales for 2024, marks a crucial milestone in EuroAPI's restructuring efforts. David Seignolle, EuroAPI's chief executive, emphasized the importance of this transaction, stating, "The divestment of Haverhill is a key step toward optimizing our industrial footprint and advancing our FOCUS-27 transformation plan. This transaction strengthens our efficiency and focus on our strategic network, reinforcing our commitment to execution."
Under the share purchase agreement, Particle Dynamics now holds 100% of the shares in EuroAPI UK, the former subsidiary responsible for operating the British plant. While financial terms were not disclosed, the deal has already closed, signaling swift progress in EuroAPI's restructuring initiatives.
Impact on EuroAPI's Operations and Future Outlook
EuroAPI's FOCUS-27 plan, announced last year, involves significant changes to the company's operational structure:
- Job Reductions: The plan aims to trim approximately 550 jobs across all functions by 2027.
- Site Consolidation: In addition to the Haverhill facility, EuroAPI intends to divest its production site in Brindisi, Italy.
- API Portfolio Optimization: The company plans to discontinue 13 APIs between 2026 and 2027, accounting for about 80 million euros ($85 million) in annual sales.
- Financial Targets: EuroAPI aims to achieve annual profits of 75-80 million euros by the end of 2027.
Once the restructuring is complete, EuroAPI will operate from four manufacturing sites across France, Hungary, and Germany, streamlining its production capabilities and focusing on core strategic assets.
Market Response and Leadership Changes
The announcement of the Haverhill divestment was well-received by investors, with EuroAPI's shares on the Euronext Paris exchange jumping 7.2% to 3.11 Euros ($3.67) in midday trading following the news. This positive market response comes after a challenging period for the company, which saw its stock price decline significantly from its peak of 18.59 Euros ($21.95) in October 2022.
The restructuring efforts have been accompanied by leadership changes at EuroAPI. David Seignolle was appointed as the new CEO in December, replacing interim chief Ludwig de Mot. These executive shifts reflect the company's commitment to implementing its transformation strategy effectively and navigating the challenges facing the CDMO industry.
References
- EuroAPI sheds UK facility as restructuring plan rolls on
EuroAPI, which is in the midst of a four-year restructuring plan, has sold its Haverhill manufacturing facility in the U.K. to Particle Dynamics as part of a share purchase agreement.
Explore Further
What are the basic details of EuroAPI's executive team and its restructuring strategy under CEO David Seignolle?
Who are the main competitors of EuroAPI in the CDMO industry, and how do they compare in terms of market position and strategies?
What are the expected financial and operational benefits for EuroAPI from the sale of the Haverhill facility?
What is the basic profile and expertise of Particle Dynamics, the company acquiring the Haverhill facility?
What are the potential market implications for EuroAPI's focus on its remaining manufacturing sites in France, Hungary, and Germany?