Fortissimo sells CTS’s pharma business to Dexcel for $83 million
The private equity fund acquired 80% of CTS for $62 million four years ago and will retain its agricultural and other businesses. The deal leaves the future of CTS’s Kiryat Malachi manufacturing plant uncertain.
After several months of negotiations, pharmaceutical company CTS is being sold to Dexcel. Calcalist has learned that the deal was closed for around NIS 250 million ($83.3 million). The purchase covers CTS’s pharmaceutical activity, with the company’s other activities to be sold separately in the future.
The pharmaceutical business is CTS’s main activity and is controlled 80% by Fortissimo Capital, headed by Yuval Cohen, which acquired the company four years ago for NIS 187 million ($62.3 million). Sigal First, a member of the CTS founding family, owns the remaining 20% and will also sell her stake as part of the deal. She declined to comment.
The deal does not include CTS’s real estate at its Kiryat Malachi factory, which occupies 10 dunams, or the activities of Flourish, which CTS acquired in 2023 for NIS 75 million ($25 million).
Flourish manufactures food products, nutritional supplements and cosmetics and owns the Hizukit and CoolZ (Regiyon) brands. CTS’s agricultural products business will also remain with the company.
CTS’s factory will continue to manufacture products for Dexcel for several years, but the sale is already raising concerns among some employees about a possible closure in the future and the transfer of drug production to Dexcel.
Dexcel Pharma is owned by Dan Oren, whose sons Ilan and Uri Oren serve as joint CEOs. The sale may indicate that Fortissimo has concluded that pharmaceuticals are a less profitable field than some of its other investments. However, it also appears that the fund took advantage of an offer that was attractive from Dexcel’s perspective. CTS is the only pharmaceutical company in Fortissimo’s portfolio.
Fortissimo is active in the medical-device sector and holds strategic investments in Rhenium and Tuttnauer, but the CTS sale marks its exit from the pharmaceutical sector.
CTS produces plant-protection materials through its subsidiary Agrica and operates a cosmetics business through another subsidiary, neither of which is included in the Dexcel deal. The Hadas brand, which is part of Flourish, will also remain outside the transaction.
When Fortissimo acquired CTS, Cohen said: “We see the pharmaceutical and agricultural sectors as a significant component of the fund’s strategy and believe that this sector will continue to experience high growth in the coming years.”
Dexcel has its own manufacturing operations, although its plant is not believed to be operating at full capacity. During the first years following the acquisition, CTS’s factory will continue to manufacture drugs for Dexcel. However, Dexcel is not obligated under the agreement to keep the CTS facility operating indefinitely.
CTS manufactures more than 100 different products based on formulas developed in-house. It also markets products under agreements with international pharmaceutical companies.
CTS was founded in 1975 by Meir Cohen and has four areas of activity: pharmaceuticals, nutritional supplements through Flourish, agriculture and veterinary medicine. The company employs approximately 400 people at factories in Kiryat Malachi, Masu’ot Yitzhak and Kiryat Ata.
A year ago, CTS held advanced talks to acquire pharmaceutical company Tirima from the Maabarot Group, which distributed the morning-after pill Postinor, but ultimately withdrew from the deal. Tirima was subsequently closed.
Dexcel, founded in 1968, operates from three sites in Israel, with its main facility in Yokneam. A significant portion of its products are generic drugs. In Israel, Dexcel markets, among other products, Pfizer’s Viagra brands and Mylan’s EpiPen.
