SK Holdings, the parent company of South Korea’s third-largest conglomerate SK Group, announced Thursday that it has acquired a 100 percent stake in AMPAC Fine Chemicals, a US-based contract manufacturer of active pharmaceutical ingredients.

SK Holdings said in a disclosure that it is paying $455 million to its overseas affiliate Alchemy Acquisition Corp. to facilitate the stake purchase from Fine Chemicals Holding Corp., the parent company of AMPAC Fine Chemicals.

The acquisition is expected to act as a foothold for SK’s pharmaceutical contract manufacturing and development business to expand its footprint to the US market, and forge synergies with its API production business unit SK biotek, which runs facilities in both Korea and Ireland, the company said.

The acquisition of AMPAC Fine Chemicals will also make SK the world’s biggest API producer by capacity. SK biotek currently produces 400,000 liters worth of API. Combined with AMPAC’s capacity, the total rises to 1.6 million liters, SK Holdings said.

According to industry watchers, the acquisition is to give SK a stable foundation for doing business in the US, considering the Donald Trump administration has been pushing for regulations mandating that drugs sold in the US are locally produced.

Founded in 1990, California-based AMPAC Fine Chemicals is a contract development manufacturing organization, or CDMO, that produces to specification APIs, baseline drug substances used to produce chemical combination drugs.

AMPAC Fine Chemicals operates production facilities in California, Texas and Virginia, which specialize in process development, scale-up and cGMP-compliant production of APIs used to make drugs targeting ailments such as cancer, central nervous system disorders and cardiovascular diseases.

The US-based CDMO is currently handling the process development and production of innovative drugs and has long-term partnerships with global pharmaceutical companies, making it a major player in the pharma business ecosystem of North America and Europe, SK said.

“AMPAC’s production facilities is considered one of the most exemplary in the industry, as they are utilized as training sites for inspectors at the US Food and Drug Administration,” an SK Holdings official said in a statement.

“With the acquisition, SK has managed to effectively deal with US regulations regarding drug production (sites) as well as strengthened product safety and client trust (in the CDMO business).”

By Sohn Ji-young (jys@heraldcorp.com)