Heritage Global Partners, New Mill Capital, Federal Equipment Company and Keith Machinery Corp Acquire Pharmaceutical Site from Alkem Laboratories

Rhea-AI Summary

Heritage Global Partners (HGP) and partners acquire a state-of-the-art pharmaceutical plant in Fenton, Missouri, previously owned by Alkem Laboratories. The facility is equipped to manufacture and package tablets, capsules, semi-solids, and liquids, with a stated capacity of 265 million compressed tablets/capsules per annum, 35 million units of semi-solids per annum, and 1.3 million liquid units. The facility is located in a prime area near STL airport and all major highways. HGP plans to find a pharmaceutical user-operator to continue operations at the site and take advantage of the plug and play nature of the offering.

Insights

Market Research Analyst

The acquisition of a state-of-the-art pharmaceutical facility by Heritage Global Partners and its joint venture partners represents a strategic initiative with potential ripple effects across the pharmaceutical manufacturing industry. By securing a site with substantial production capabilities, the joint venture is positioning itself to attract pharmaceutical operators seeking immediate expansion or entry into the St. Louis market. This move could catalyze competition among manufacturers, possibly leading to increased supply and innovation within the sector.

The facility's high manufacturing capacity, with the ability to produce significant volumes of tablets, capsules, semi-solids and liquids, indicates a readiness to meet large-scale production demands. This could be particularly advantageous for pharmaceutical companies looking to scale operations quickly without incurring the costs and delays associated with building new infrastructure. The strategic location near transportation hubs further enhances the value proposition of the site, potentially reducing logistics costs for a future operator.

For existing and potential stakeholders in Heritage Global Inc., this development may signal a robust growth trajectory and an enhanced competitive stance within the asset advisory and auction services space, specifically in the pharmaceutical sector. The acquisition could lead to future revenue streams from the sale or lease of the facility and associated services, which would be a positive indicator for the company's financial health.

Financial Analyst

The acquisition of a high-capacity pharmaceutical plant by Heritage Global Partners and its partners is a significant financial event that merits attention from investors and industry analysts. The plant's capabilities and strategic location are likely to enhance Heritage Global's asset portfolio and provide a competitive edge in the pharmaceutical asset auction market. The joint venture's plan to re-market the facility to pharmaceutical user-operators suggests an aggressive growth strategy that could lead to increased market share and revenue.

Investors should monitor the subsequent utilization of the facility closely, as a successful lease or sale can generate substantial income and positively influence Heritage Global's stock performance. The company's ability to attract a high-profile pharmaceutical operator would not only validate the strategic acquisition but also potentially lead to recurring revenue through long-term contracts or partnerships. Additionally, this development could be a precursor to further investments in the pharmaceutical sector by Heritage Global, indicating a diversification strategy that may reduce risk and stabilize earnings.

It is important to assess the financial health of Heritage Global Inc. post-acquisition and to understand how the deal was structured financially. The terms of the acquisition, including the purchase price and funding methods, can impact the company's debt levels and liquidity, influencing its financial stability and attractiveness to investors.

Pharmaceutical Industry Analyst

The pharmaceutical industry is witnessing a strategic move with Heritage Global Partners' acquisition of a fully equipped manufacturing facility. This acquisition is indicative of a trend where companies leverage existing infrastructure to gain a competitive advantage. The facility's 'plug and play' nature is particularly significant, as it allows for a swift transition to operational status, minimizing downtime and accelerating time-to-market for pharmaceutical products.

The facility's stated annual production capacities are impressive and suggest that it could play a pivotal role in addressing supply chain challenges, such as those experienced during the COVID-19 pandemic. The ability to manufacture a diverse range of pharmaceutical forms—tablets, capsules, semi-solids and liquids—provides flexibility to adapt to various market demands and regulatory requirements.

The potential impact on the pharmaceutical industry includes increased manufacturing capacity and the facilitation of market entry for new players, thereby enhancing competition and potentially driving down drug prices. However, the success of this venture will depend on the joint venture's ability to effectively market the facility and secure a reliable operator. The outcome of this endeavor will have implications for supply chain robustness and the strategic positioning of pharmaceutical manufacturing within the United States.

75,000 square foot, state-of-the-art and well-equipped solid dose and liquid pharmaceutical facility in Fenton, Missouri

SAN DIEGO--(BUSINESS WIRE)-- Heritage Global Partners (“HGP”), a subsidiary of Heritage Global Inc. (NASDAQ: HGBL), and a worldwide leader in asset advisory and auction services, in partnership with New Mill Capital, Federal Equipment Company and Keith Machinery Corp., announced today that it has acquired a state-of-the-art pharmaceutical plant in Fenton Missouri, formerly owned by Alkem Laboratories. The joint venture plans to find a pharmaceutical user-operator to continue operations at the site and take advantage of the plug and play nature of the offering.

The facility was designed to manufacture and package tablets, capsules, semi solids and liquids and is capable of manufacturing and packing 265 million compressed tablets/capsules per annum, 35 million units of semi solids per annum, and 1.3 million liquid units, with stated capacity operating on a single shift. The facility is located in a prime area in Fenton, MO conveniently located near STL airport and all major highways. The facility is well-equipped with manufacturing and packaging suites, analytical and micro laboratories, a large warehouse space with controlled substances vaults, and administrative offices.

"We're thrilled to announce the acquisition of this cutting-edge pharmaceutical plant. Teaming up with our synergistic JV partners, we're eager to re-market the facility, reinforcing our commitment to the pharma sector. This marks another exciting opportunity for Heritage Global Partners," commented Nick Dove, President of HGP.

Adam Covitt, President of Federal Equipment Company added, “This plant represents a fantastic opportunity for any pharmaceutical company looking to add immediate capacity and/or expand into the St. Louis market. The plant is exceptional, and I imagine it will command significant interest from the marketplace.”

Tom Murray, a Principal at New Mill Capital stated, “We are pleased to bring this site to market and leverage the success from the two St. Louis area pharma plants our JV sold on our previous project.”

“We have many customers interested in either certain parts of the plant or the entire operation and have high hopes for the future of the site,” concluded Kevin Jampolis of Keith Machinery Corp.

Interested parties can inquire immediately.

About Heritage Global Partners, Inc. (“HGP”)

HGP is a subsidiary of Heritage Global Inc. (NASDAQ: HGBL). HGP operates under the Industrial Assets business unit and is a full-service auction, liquidation and asset advisory firm which holds a prominent spot in the industrial sectors including Aerospace, Automotive, Aviation, Biotech, Broadcast & Postproduction, Chemical, Electronics Manufacturing, Energy, Food & Beverage, Heavy Construction, Metalworking, Oil & Gas, Pharmaceutical, Plastics, Printing, Real estate, Semiconductor, Solar, Textile & Woodworking, and others. HGP conducts 150-200 auction projects per year, globally.

About Heritage Global Inc. (“HG”)

Heritage Global Inc. (NASDAQ: HGBL) values and monetizes industrial & financial assets by providing acquisition, disposition, valuation, and lending services for surplus and distressed assets. This aids in facilitating the circular economy by diverting useful industrial assets from landfills and operating an ethical supply chain by overseeing post-sale account activity of financial assets. Specialties consist of acting as an adviser, in addition to acquiring or brokering turnkey manufacturing facilities, surplus industrial machinery and equipment, industrial inventories, real estate, and charged-off account receivable portfolios through its two business units: Industrial Assets and Financial Assets.

About Federal Equipment Company

Federal Equipment Company (www.fedequip.com) trusted name in used processing equipment, provides reliable used industrial and process equipment at competitive prices for pharmaceutical, packaging, chemical, plastics, food and beverage and similar processing industries. From its headquarters in Cleveland, Ohio, Federal Equipment Company delivers reliable machinery at a fraction of the cost and lead time of new equipment.

About New Mill Capital

New Mill Capital (www.newmillcapital.com) is a privately-held asset acquisition and disposition firm specializing in processing plant turnkey sales and disposition programs. New Mill is a national leader in the purchase and sale of idle manufacturing plants, equipment packages and has also repurposed over 20,000,000 square feet of manufacturing facilities.

About Keith Machinery Corp.

Keith Machinery Corp. (“KMC”) is widely recognized as a leading supplier of used and new equipment for the pharmaceutical, cosmetic, food, paint and ink, chemical, and related industries. Keith Machinery Corp. stocks over 100,000 square feet of warehoused equipment and employs engineers, machinists, and mechanics to offer technical support for most items (www.keithmachinery.com).

View source version on businesswire.com: https://www.businesswire.com/news/home/20240111729837/en/

Raspina Jannesar

Chief Marketing Officer

Heritage Global Inc.

858/703.5734

rjannesar@hginc.com

Investor Relations:

John Nesbett/Jennifer Belodeau

IMS Investor Relations

203/972.9200

InvestorRelations@hginc.com

Source: Heritage Global Partners

FAQ

Who acquired the pharmaceutical plant in Fenton, Missouri?

Heritage Global Partners (HGP) and partners, including New Mill Capital, Federal Equipment Company, and Keith Machinery Corp.

What is the stated capacity of the facility for manufacturing tablets, capsules, semi-solids, and liquids?

The facility is capable of manufacturing and packing 265 million compressed tablets/capsules per annum, 35 million units of semi-solids per annum, and 1.3 million liquid units.

Where is the facility located?

The facility is located in a prime area in Fenton, MO, conveniently near STL airport and all major highways.

What are the plans for the facility?

HGP plans to find a pharmaceutical user-operator to continue operations at the site and take advantage of the plug and play nature of the offering.