Longtime Texarkana business Humco is becoming part of something much bigger.
On Tuesday, the company announced its board of directors had agreed to a merger with Belgium's Fagron Group in a deal worth an estimated $70 million.
Founded in 1872, Humco is a diversified, global pharmaceutical company that serves more than 45,000 pharmacies with a variety of innovative and patented products, including topical and transdermal creams, syrups and suspensions as well as branded pharmaceutical products. The Fagron Group is a global pharmaceutical compounding company that offers personalized pharmaceutical care to hospitals, pharmacies, clinics and patients in 34 countries worldwide.
Though Humco will be part of Fagron, the company says it will remain in Texarkana and retain the Humco brand. "Fagron's investment into the Texarkana facility signals strong interest in helping to invest into the Texarkana community and the Texarkana employees working at Humco," the company said in a press release.
The merger makes sense for both companies, Humco's chairman and CEO said.
"We complement each other, selling in adjacent markets with very little customer overlap, enabling a significant number of growth opportunities," said Humco chief Gregory Pulido. "While we introduce our successful and unique patented delivery vehicles and branded pharmaceutical products internationally, our customers can benefit from the excellent range of more than 1,600, high-quality, active pharmaceutical ingredients of Fagron."
Gregory Pulido will transition to the role of executive chairman. Andrew Pulido, currently president, global pharmaceuticals, will become Humco president.
Ken Reese, a local Texarkana resident, will continue as Humco's vice president of operations and will lead integration, facility upgrade, and manufacturing for Fagron's world-wide network of products, said the press release.
According to GlobeNewswire, the acquisition price for Humco is $47.5 million in cash, with the potential for a performance linked earn-out of up to $ 22.5 million in cash over a two-year period. The total consideration for the acquisition of Humco is capped at $70 million. The transaction includes all technologies, scientific data, patents and trademarks, as well as Humco's Texas production facility.
Texarkana is home to Humco's U.S. Over The Counter Medicine Sales & Operations. Humco's global headquarters is in Austin, along with its U.S. Pharmaceutical Sales & Marketing division. Its international headquartersis in Coral Gables, Fla.
According to its website, Humco began as Hutchison Medicine Co., founded by J.C. Hutchison in Linden, Texas. Hutchison traveled through East Texas in a covered wagon, selling Big Head Liniment, oils, and salves that were remedies for both settlers and their animals with the purpose of "helping people feel better."
In 1876, Hutchison purchased land in an area that would become the Queen City. While working there, Hutchison developed a healing preparation known as Hutchison's Magic Oil. Demand grew so quickly Hutchison gave up his drug business and focused his business on manufacturing and selling Magic Oil.
In 1908, Hutchison Medicine Co. moved to Texarkana, Texas, where it was run by John and his two sons, Raymond and Edwin. In 1947, following the death of the senior Hutchison, the company was sold to Pearson Walsh, a local wholesale druggist, and to Otto Witzansky, a local retail druggist. Products were initially distributed to major drug wholesalers throughout the United States. Five years later, Mr. Walsh became the sole owner and renamed the company Humco.
In 1993, Humco was sold to its current ownership group, with a focus on expanding the manufacturing and distribution of its products. But the business was changing, and retailers were opting to market and sell products rather than manufacturers, so Humco became proactive in partnering with major chains, mass retailers, independent pharmacies and other pharmaceutical companies.
In the early 2000s, Humco decided to get back to its pharmaceutical compounding roots by developing its own line of pharmaceutical delivery vehicles. Humco commercialized a line of pre-made Pluronic-Lecithin-Oranogel (PLO) delivery vehicles that helped to increase efficiency for pharmacists in their labs.
Throughout the last decade, Humco has released a broad portfolio of important delivery vehicles in key therapeutic areas such as pain management, infectious disease, hormone replacement therapy, wound care, and dermatology and aesthetics.
"I am pleased to welcome Humco to the Fagron Group," said Rafael Padilla, Fagron's chief executive officer. "Humco is an excellent strategic fit for Fagron. By combining the two companies, we create a strong competitive company with significant scale, strengthening our market position in the USA. Our global footprint and leading market positions in Europe and South America will enable us to successfully launch and grow the innovative branded pharmaceutical products and delivery vehicles of Humco outside the USA."