Company Reaffirms Full Year 2021 Net Revenue
Guidance of $397 Million and Adjusted EBITDA Guidance of $105
Million
Business Combination Remains on Track to Close
in the Third Quarter of 2021
Procaps Group, a leading integrated international healthcare and
pharmaceutical company, and Union Acquisition Corp. II (NASDAQ:
LATN, LATNU, LATNW) (“LATN”), a publicly-traded special purpose
acquisition company, today announced the filing of a registration
statement on Form F-4 (the “Registration Statement”), which
contains a preliminary proxy statement/prospectus, with the U.S.
Securities and Exchange Commission (“SEC”) in connection with their
recently announced proposed business combination. The Registration
Statement includes audited financials of Procaps Group for the full
fiscal years of 2019 and 2020 and can be found here.
Expected Milestones to Completion of Business Combination
Include:
- Investor and analyst day – August 2021
- Second quarter 2021 financial results – August 2021
- Shareholder vote – September 2021
- Business combination close – September 2021
- Listing on Nasdaq Capital Market under new ticker symbol “PROC”
– September 2021
Management Commentary
“Today’s filing represents a key de-risking event to close our
proposed business combination with LATN in the third quarter of
2021,” said Ruben Minski, Procaps Founder, Chairman and Chief
Executive Officer. “More importantly, the registration statement
includes fully audited IFRS financials for our 2019 and 2020 fiscal
years that are consistent with our previously communicated
financials utilized during our PIPE roadshow in the first quarter
of 2021. As we close the second quarter of 2021, we remain
confident in our revenue and adjusted EBITDA growth trajectories
and based on this, we are reaffirming our full year 2021 net
revenue and adjusted EBITDA guidance of $397 million and $105
million, respectively.
“We look forward to sharing more on our developing story at
upcoming institutional investor conferences and our soon to be
announced investor and analyst day,” concluded Minski.
Completion of the business combination, which is expected to
close in the third quarter of 2021, is subject to approval by LATN
shareholders and other customary closing conditions, including the
Registration Statement being declared effective by the SEC. The
combined company will be led by Ruben Minski, Procaps Group
Founder, Chairman & CEO. Upon closing of the business
combination (assuming none of the LATN shareholders redeem any of
their LATN ordinary shares in connection with the approval of the
business combination and including the redemption of certain shares
held by IFC), existing Procaps Group shareholders are expected to
hold approximately 76% of the combined company, which shares will
be subject to certain lock-up arrangements.
Institutional investors have committed to an upsized private
investment in public equity (“PIPE”) of $100 million in ordinary
shares of LATN, which will be converted into ordinary shares of the
combined company upon the closing of the business combination. The
PIPE will close concurrently with the business combination. Subject
to any redemptions by LATN shareholders, there is approximately
$136.9 million in cash currently held in LATN’s trust account. It
is anticipated that the combined company will have approximately
$236.9 million in gross cash proceeds (before transaction-related
expenses and the redemption of certain shares held by IFC) to fund
organic growth through capacity expansion, plant improvements,
working capital investments, e-Health platform improvements and
R&D expenses, inorganic growth via accretive acquisitions and
the redemption of certain shares from IFC.
While the Registration Statement has not yet become effective
and the information contained therein is subject to change, it
provides important information about Procaps Group’s business and
operations, proposed business combination with Union Acquisition
Corp. II and the proposals to be considered by the LATN
shareholders.
Additional information about the transaction including the
Registration Statement on Form F-4 can be viewed here:
https://investor.procapsgroup.com.
Proposed Business Combination Highlights
- Procaps Group is a family-owned Latin American pharmaceutical
company established over 40 years ago that has grown into a leading
integrated pharma company with a presence in 13 countries and
product reach in 50 markets modernizing oral drug delivery
technology and manufacturing capabilities.
- Procaps Group’s state-of-the-art manufacturing capabilities
provide innovative delivery technologies protected by an extensive
IP moat and supported by industry accolades such as the first
FDA-approved pharmaceutical plant in South America for selling Rx
products into the U.S.
- Procaps Group today is the largest pharmaceutical contract
development and manufacturing organization “CDMO” in Latin America
and top 3 globally in terms of volume of softgel production
capacity.
- As of December 31, 2020, Procaps Group employed over 4,700
people across 13 countries, and has a strong history and focus on
ESG principles including resource-saving policies, HR and social
programs and corporate policies.
- Procaps Group generated net revenue of $331 million, Adjusted
EBITDA of $85 million and Adjusted EBITDA on a constant currency
basis of $93 million in 2020 and is on track to reach $397 million
in net revenue and $105 million in Adjusted EBITDA in 2021. The
adjusted EBITDA figures do not include any one-time add backs
specifically for provisions required by IFRS. Procaps Group expects
full-year Adjusted EBITDA margin expansion from 18% in 2019 to 26%
in 2021 with strong positive free cash flow. Approximately 44% of
Procaps Group revenue in 2020 was USD-denominated.
- Transaction represents the first ever Latin American focused
SPAC to include a fully committed and over-subscribed SPAC-related
ordinary share PIPE.
- Transaction is expected to enable further investment in growth
and new product categories and positions Procaps Group to
capitalize on favorable regional dynamics through organic growth in
B2B & B2C segments.
- Transaction also positions the Company to drive inorganic
growth through a roll-up strategy focused on mid-sized companies in
the region. The Company’s M&A plan will focus on pharma and
CDMO targets, as well as the possibility for transformational
acquisitions in the future.
- Transaction represents attractive entry valuation at 10.75X
estimated 2021 EV/EBITDA multiple versus global CDMO and
pharmaceutical industry comparable companies.
- Combined company to have an implied initial enterprise value of
approximately $1.1 billion, and expected gross cash proceeds of
$236.9 million (before transaction-related expenses and the
redemption of certain shares held by IFC) after closing, including
a $100 million fully-committed PIPE.
- Combined company strategically positions Procaps Group as a
differentiated Latin American integrated pharma company leveraging
a proprietary and proven M&A strategy that has the potential to
deliver significant Adjusted EBITDA growth and margin
expansion.
- The PIPE was raised from a broad group of Latin American
investors, healthcare investors and thought leaders. These include
pan-regional funds such as Moneda Asset Management, as well as
Chilean-based Consorcio Seguros, among several other unnamed global
and healthcare investors.
- Transaction is expected to close in the third quarter of 2021,
with the combined company expected to be listed on the Nasdaq
Capital Market under the symbol “PROC.”
Procaps Group Business and Operational Highlights
Leading regional pharmaceutical player with global reach and
accomplished management team
- Founded in 1977 by the Minski Family with 4,700+ employees
across 13 countries as of December 31, 2020
- Net revenue of $331 mm in 2020 and projected $397 mm for
2021
- Innovative delivery technologies transform branded generics
into differentiated products
In-house R&D capabilities driving attractive growth
opportunities
- Avenues for growth with a robust pipeline and a high product
renewal rate
- Focus on differentiated, high margin, and high barrier-to-entry
products
Leading pharmaceutical integral CDMO specialized in
softgels
- A preferred supplier to the global pharmaceutical
companies
- Top 3 global player by softgel production capacity, with strong
growth potential and long-standing reputable clients including
Glaxo, Pfizer and Abbott
Proprietary portfolio of branded Rx and OTC products
- Robust proprietary portfolio with strong growth rates
- 99% of product portfolio is proprietary
Positioned to capitalize on favorable regional
dynamics
- LatAm’s pharma sales expected to outperform global growth
- Healthcare expenditure expected to reach a 7% CAGR from 2020 –
2022
- LatAm’s aging population expected to increase boosting demand
for pharma
Strong history and focus on ESG Principles
- Resource saving polices, HR & social programs and
governance are important to Procaps Group
About Procaps Group
Procaps Group is a developer of pharmaceutical and nutraceutical
solutions, medicines, and hospital supplies that reach more than 50
countries in all five continents. Procaps has a direct presence in
13 countries in Latin America and, as of December 31, 2020, had
more than 4,700 collaborators working under a sustainable model.
Procaps develops, manufactures, and markets over-the-counter (OTC)
and prescription drugs, nutritional supplements and high-potency
clinical solutions. For more information, visit
www.procapsgroup.com or Procaps Group’s investor relations website
investor.procapsgroup.com, which will also contain a link to the
Registration Statement. The Registration Statement includes audited
consolidated financial statements of Procaps Group as of and for
the fiscal years ended December 31, 2020 and 2019.
About Union Acquisition Corp. II
Union Acquisition Corp. II, led by Kyle Bransfield, is a Cayman
Islands exempted company incorporated as a blank check company for
the purpose of entering into a merger, share exchange, asset
acquisition, share purchase, recapitalization, reorganization or
other similar business combination with one or more businesses or
entities. For more information, please click here.
Important Information About the Merger and Where to Find
It
In connection with the proposed business combination, Procaps
Group, S.A. (“Holdco”), a subsidiary of Crynssen Pharma Group
Limited (“Procaps Group”) that will be become the holding company
of LATN and Procaps Group as of the closing of the proposed
business combination, filed a Registration Statement on Form F-4
(the “Form F-4”) with the U.S. Securities and Exchange Commission
(the “SEC”) that includes a proxy statement of LATN that also
constitutes a prospectus of Holdco. LATN, Procaps Group and Holdco
urge investors, stockholders and other interested persons to read
the Form F-4, including the preliminary proxy statement/prospectus
and amendments thereto and the definitive proxy
statement/prospectus and documents incorporated by reference
therein, as well as other documents filed with the SEC in
connection with the proposed transaction, as these materials will
contain important information about Procaps Group, Holdco, LATN and
the proposed business combination transaction. After the
Registration Statement is declared effective, the definitive proxy
statement/prospectus included in the Registration Statement will be
mailed to shareholders of LATN as of a record date to be
established for voting on the proposed business combination. Once
available, shareholders will also be able to obtain a copy of the
Form F-4, including the proxy statement/prospectus, and other
documents filed with the SEC without charge, by directing a request
to: BTG Pactual US Capital, LLC, Attention: Prospectus Department,
Email: OL-BTGPactual-ProspectusDepartment@btgpactual.com. The
preliminary and definitive proxy statement/prospectus included in
the registration statement, once available, can also be obtained,
without charge, at the SEC’s website (www.sec.gov).
Participants in the Solicitation
LATN and Procaps Group and their respective directors and
executive officers may be considered participants in the
solicitation of proxies with respect to the proposed business
combination described in this press release under the rules of the
SEC. Information about the directors and executive officers of LATN
is set forth in LATN’s final prospectus filed with the SEC pursuant
to Rule 424(b) of the Securities Act of 1933, as amended (the
“Securities Act”) on October 17, 2019, and is available free of
charge at the SEC’s website at www.sec.gov or by directing a
request to: Union Acquisition Corp. II, 1425 Brickell Ave., #57B,
Miami, FL 33131. Information regarding the persons who may, under
the rules of the SEC, be deemed participants in the solicitation of
the LATN shareholders in connection with the proposed business
combination will be set forth in the Registration Statement filed
with the SEC. These documents can be obtained free of charge from
the sources indicated above.
Forward-Looking Statements
This press release contains “forward-looking statements.”
Forward looking statements may be identified by the use of words
such as “forecast,” “intend,” “seek,” “target,” “anticipate,”
“believe,” “expect,” “estimate,” “plan,” “outlook,” and “project”
and other similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
Such forward-looking statements include projected financial
information, including 2021 net revenue, Adjusted EBITDA and
Adjusted EBITDA margin guidance; the expected gross cash proceeds
from the Procaps Group business combination and its effects on
expansion; expectations relating to the growth of Procaps Group’s
B2B and B2C business, capacity expansion, plant improvements,
working capital investments, e-health platform and R&D
expenses; expectations related to potential M&A acquisitions;
the closing of the business combination transaction; and
expectations relating to Procaps Group’s ability to invest in
growth through organic and inorganic growth. Such forward-looking
statements with respect to revenues, earnings, performance,
strategies, synergies, prospects, and other aspects of the
businesses of LATN, Procaps Group, or Holdco, prior to or following
the completion of any proposed business combination, are based on
current expectations that are subject to risks and uncertainties. A
number of factors could cause actual results or outcomes to differ
materially from those indicated by such forward-looking statements.
These statements involve risks, uncertainties and other factors
that may cause actual results, levels of activity, performance or
achievements to be materially different from the information
expressed or implied by these forward-looking statements. Although
we believe that we have a reasonable basis for each forward-looking
statement contained in this press release, we caution you that
these statements are based on a combination of facts and factors
currently known by us and our projections of the future, about
which we cannot be certain. Forward-looking statements in this
press release include, but are not limited to: (1) the inability to
complete the transactions contemplated by the proposed business
combination; (2) the inability to recognize the anticipated
benefits of the proposed business combination, which may be
affected by, among other things, competition, and the ability of
the combined business to grow and manage growth profitably; (3) the
inability to successfully retain or recruits officers, key
employees, or directors following the proposed business
combination; (4) effects on LATN’s public securities’ liquidity and
trading; (5) the market’s reaction to the proposed business
combination; (6) the lack of a market for LATN’s securities; (7)
LATN’s and Procaps Group’s financial performance following the
proposed business combination; (8) costs related to the proposed
business combination; (9) changes in applicable laws or
regulations; (10) the possibility that LATN or Procaps Group may be
adversely affected by other economic, business, and/or competitive
factors; and (11) other risks and uncertainties indicated from time
to time in documents filed or to be filed with the SEC by LATN. We
cannot assure you that the forward-looking statements in this press
release will prove to be accurate. These forward-looking statements
are subject to a number of significant risks and uncertainties that
could cause actual results to differ materially from expected
results, including, among others, the ability to complete the
business combination due to the failure to obtain approval from
LATN shareholders or satisfy other closing conditions in the
business combination agreement, the occurrence of any event that
could give rise to the termination of the business combination
agreement, the ability to recognize the anticipated benefits of the
business combination, the outcome of any legal proceedings that may
be instituted against LATN or Procaps Group following announcement
of the proposed business combination and related transactions, the
impact of COVID-19 on Procaps Group’s business and/or the ability
of the parties to complete the business combination, the ability to
obtain or maintain the listing LATN’s ordinary shares on Nasdaq
following the proposed business combination, costs related to the
proposed business combination, changes in applicable laws or
regulations, the possibility that LATN or Procaps Group may be
adversely affected by other economic, business, and/or competitive
factors, and other risks and uncertainties, including those to be
included under the header “Risk Factors” in the Form F-4 filed with
the SEC and those included under the header “Risk Factors” in the
final prospectus of LATN related to its initial public offering, as
well as LATN’s other filings with the SEC. Should one or more of
these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements.
We undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise, except as may be required under applicable securities
laws. Accordingly, you should not put undue reliance on these
statements.
Non-Solicitation
This press release is not a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or
in respect of the proposed business combination and shall not
constitute an offer to sell or a solicitation of an offer to buy
any securities nor shall there be any sale of securities in any
state or jurisdiction in which such offer, solicitation, or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction. No offer of
securities shall be made except by means of a prospectus meeting
the requirements of the Securities Act.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210621005786/en/
Procaps Group Investor Contact: Chris Tyson/Doug Hobbs
SPAC Alpha IR+ (949) 491-8235 LATN@mzgroup.us
LATN Contact: Kyle P. Bransfield Chief Executive Officer
Union Acquisition Corp. II (305) 306-2522
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