Water Street Completes Sale of AAIPharma Services to Cambridge Major Laboratories

Sale Marks Health Care Firm's Fourth Strategic Transaction in Recent Weeks

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Oct 28, 2013, 01:02 ET

CHICAGO, Oct. 28, 2013 /PRNewswire/ -- Water Street Healthcare Partners, a strategic investor focused exclusively on the health care industry, announced today that it has sold its outsourced pharmaceutical services company AAIPharma Services Corp. ("AAIPharma") to Cambridge Major Laboratories Inc. ("CML"). AAIPharma and CML have merged to form one of the world's leading providers of integrated chemistry, manufacturing and controls (CMC) services. The transaction marks Water Street's fourth strategic transaction in the past three weeks.

Water Street acquired AAIPharma in 2009 when it was a division of a global corporation and transitioned it to a standalone company. Together with management, Water Street created and executed a strategic expansion program that transformed AAIPharma into a leading independent provider of pharmaceutical development services. Over the past two years, AAIPharma has opened a 40,000-square foot technology center, expanded its manufacturing centers and completed a market-leading acquisition that extended its capabilities into the growing material testing services market. Today, AAIPharma provides services that encompass all phases of drug development to more than 500 of the world's leading pharmaceutical companies.

"We are pleased that the transformation of AAIPharma into a leading provider of drug development and manufacturing services resulted in a sale that creates an industry leader and delivers an outstanding return to our investors," said Peter Strothman, a partner with Water Street. "We leveraged our team's extensive pharmaceutical expertise and network of relationships to build on AAIPharma's core scientific capabilities. Since our investment, the company has doubled its customer base and achieved tremendous growth to create meaningful long-term value for its customers, employees and our investors."

Water Street's sale of AAIPharma follows its investment earlier this month in a company that will develop multiple generic product families on behalf of a global pharmaceutical leader. Water Street also sold two companies in October. Last week, it sold its anatomic pathology (AP) company PLUS Diagnostics to Miraca Life Sciences to make Miraca the largest independent AP company in the United States. A week earlier, Water Street sold its New England laboratory company ConVerge Diagnostic Services to Quest Diagnostics.

"We are grateful that our focused strategy to build market-leading health care companies has led to them being acquired by global leaders who are committed to building on their unique capabilities and services," said Tim Dugan, managing partner, Water Street. "Our team's deep expertise in health care, extensive operating experience and demonstrated ability to achieve transformational growth has been, and will continue to be, core to the success of Water Street and our family of health care companies."

Water Street has completed more than 45 strategic acquisitions and mergers to build 20 market-leading health care companies in the past seven years. It is continuing to pursue proprietary investment opportunities in four segments of health care: medical and diagnostic products and devices, specialty distribution, outsourced health care services, and specialty pharmaceutical products and services. Target investments range in size from $50 million to $500 million in value.

About Water Street

Water Street is a strategic investor focused exclusively on health care. The firm has a strong record of building market-leading companies across key growth sectors in health care. It has worked with some of the world's leading health care companies on its investments including Gentiva, Johnson & Johnson, Medtronic and Smith & Nephew. Water Street's team is comprised of industry executives and private equity professionals with decades of experience investing in and operating global health care businesses. The firm is headquartered in Chicago. For more information about Water Street, visit waterstreet.com.

SOURCE Water Street Healthcare Partners