The USA’s Alpharma says it has entered into a definitive agreement to sell its active pharmaceutical ingredients business to certain investment funds that are managed by 3i.

3i, a global private equity and venture capital company, is shelling out $395 million in cash and the deal will generate net proceeds to Alpharma of approximately $365 million. The transaction is expected to be completed in the second quarter of 2008, pending customary closing conditions.

Alpharma’s API business, which employs 700 people, had turnover of $138.7 million for the nine months ended September 2007 and operating income of $30.7 million. The sale includes manufacturing facilities in Copenhagen, Denmark; Oslo, Norway; Budapest, Hungary and Taizhou, China.

The New Jersey-based firm’s chief executive Dean Mitchell said that the divestiture, at such an “attractive price will provide funds to capitalise on future growth opportunities in our pharmaceuticals and animal health businesses”. He added that the “decreased complexity of our business mix, combined with a potential share buyback, will enable us to enhance value to our shareholders”.