Pharmaceutical factory closed | Capcium equipment put up for auction

There remains little hope that the pharmaceutical manufacturing company Capcium will be revived. The state-of-the-art factory, completed in 2020 in Pointe-Claire at a cost of around 60 million, is about to be dismantled and emptied of its machines and equipment.

All of the production and analysis equipment from the Capcium plant has just been put up for sale in lots or individually on the website of Workingman Capital, a Toronto auctioneer acting for Chicago-based Hilco Global, the new owner of Capcium since bankruptcy in 2023.

Unless a buyer appears who would restart production, the equipment will be auctioned on February 22.

The 140,000 square foot factory – which includes an 8,000 square foot analytical laboratory and four production lines – employed 132 people before it was placed in insolvency in March 2023 by its main creditor, Scotiabank, which lost about $1.2 million.

A handful of specialized employees had been retained to preserve the validity of costly approvals from Health Canada and the American FDA, which allow the production of drugs and natural products. They were laid off this month.

Governments lost 22 million

The other lender, Investissement Québec, lost 17 million in the bankruptcy, said a spokesperson. A federal agency also lost about $5 million in a loan guarantee.

The company set up by local investors worked in a specialized niche of pharmaceutical manufacturing, namely the encapsulation of medicines, natural products and cannabis products into capsules.

Capcium had the misfortune of undertaking construction of the factory before the pandemic: construction costs and times increased significantly. Deadlines for obtaining costly approvals from Health Canada and the US FDA were stretched, so Capcium never managed to achieve profitability.

To alleviate its debt, it had to, in 2021, become a tenant by selling the building on Highway 40 to the American landlord Alexandria Real Estate Equities, specializing in pharmaceutical and medical facilities. Having become a tenant, Capcium only retained the production and analysis equipment.

Last spring, Capcium had cumulative losses of 68 million (including 24 million in 2022) and debt of 27 million; she was made bankrupt by the bank.

According to sources, Ontario natural products manufacturer Vivo Brands and an Asian investment firm made offers, which were not accepted.

Flip by Hilco

In September 2023, Chicago-based investment fund Hilco Global and two local minority shareholders, Sébastien Carpentier and Hugo Desforges, bought Capcium for $950,000. Mr. Carpentier was appointed president of Capcium. Shortly after the transaction, Hilco relisted Capcium and at the time of publishing this article, the company is still offered on the site.

The Caisse de dépôt et placement du Québec owns a 27% stake in Hilco Global. The low-cost recovery of “distressed assets” and their rapid revitalization or resale are among Hilco’s specialties.

According to sources familiar with the matter, Hilco first asked for 10 million, then lowered the price to 6 million. A British buyer and a Spanish buyer have shown interest, but no deal has been reached so far.

According to estimates made at the time of the sale to Hilco, the book value of Capcium’s equipment is around 17 million, but their value at auction in a liquidation context is around 4 million.

Hilco did not respond to several interview requests this week and last fall. A telephone message left for Mr. Carpentier on Monday went unanswered.

Messages left with Workingman Capital and Alexandria Real Estate Equities this week also went unanswered.