ACETO Completes Acquisition of Generic Products and Related Assets of Citron Pharma and Lucid Pharma
December 21 2016 - 9:30AM
ACETO Corporation (NASDAQ:ACET), an international company engaged
in the development, marketing, sale and distribution of Human
Health products, Pharmaceutical Ingredients and Performance
Chemicals, today announced that it has, through its wholly-owned
subsidiary Rising Pharmaceuticals, completed the acquisition of
generic products and related assets of Citron Pharma LLC, a
pharmaceutical company focused on developing and marketing generic
pharmaceutical products, and its affiliate Lucid Pharma LLC for a
total consideration, prior to any potential earn-out payments, of
approximately $429 million, or $349 million, net of approximately
$80 million of expected tax benefits.
At closing, ACETO paid the sellers $270 million
in cash. Further, ACETO is committed to make a $50 million
unsecured deferred payment to the sellers on December 21, 2021 and
issue 5.122 million shares of ACETO common stock beginning on
December 21, 2019. The product purchase agreement also provides for
a 5-year potential earn-out of up to an additional $50 million in
cash, based on the financial performance of four pre-specified
pipeline products that are currently in development.
“This transaction adds complementary product
portfolios, strengthens an already effective asset-light operating
model and expands our network of drug development and manufacturing
partners,” said Sal Guccione, Chief Executive Officer of ACETO. “It
accelerates our transition toward human health and adds significant
scale to Rising Pharmaceuticals, expanding its portfolio of
commercialized finished dosage form generic products by more than
50%, increasing the number of approved and yet-to-be launched
products four-fold and growing the pipeline of products under
development by nearly two-thirds. We continue to expect the
transaction to be accretive to GAAP EPS within 12 months and
immediately accretive to non-GAAP Adjusted EPS.”
ACETO funded the closing cash portion of the
transaction through a combination of a $115 million drawdown on the
Company’s new 5-year $225 million revolving credit facility, a new
5-year $150 million term loan with interest payable at an initial
rate of LIBOR+2.25% and the balance from Company cash on hand.
Commenting on the Company’s new debt offering, Mr. Guccione
continued, “We appreciate the support for our long-term growth
plans shown by our financial partners who participated in the
successful syndication of the Company’s debt offering."
Management intends to update investors on its
fiscal year 2017 outlook, including the contribution of Citron
Pharma and Lucid Pharma, when it reports its second quarter fiscal
year 2017 results on February 2, 2017.
Wells Fargo Securities, LLC served as exclusive
financial advisor to ACETO. Wells Fargo Securities, LLC and JP
Morgan Chase Bank, N.A. led the debt financing for the
acquisition’s cash consideration. Lowenstein Sandler LLP served as
legal advisor to ACETO. J.P. Morgan Securities LLC served as
exclusive financial advisor to Citron Pharma and Lucid Pharma. Reed
Smith LLP served as legal advisor to Citron Pharma and Lucid
Pharma.
ABOUT ACETO
ACETO Corporation, incorporated in 1947 and with
offices and operations in 10 countries, is engaged in the
development, marketing, sale and distribution of Human Health
products (finished dosage form generics and nutraceuticals),
Pharmaceutical Ingredients (pharmaceutical intermediates and active
pharmaceutical ingredients) and Performance Chemicals (specialty
chemicals and agricultural protection products).
FORWARD-LOOKING STATEMENTS
This news release contains forward-looking
statements as that term is defined in the federal securities
laws. The events described in forward-looking statements
contained in this news release may not occur. Generally,
these statements relate to our business plans or strategies,
projected or anticipated benefits or other consequences of ACETO’s
plans or strategies, financing plans, projected or anticipated
benefits from the acquisition described in this release and other
acquisitions that ACETO may make, or a projection involving
anticipated revenues, earnings or other aspects of ACETO’s
operating results or financial position, and the outcome of any
contingencies. Any such forward-looking statements are based
on current expectations, estimates and projections of management.
ACETO intends for these forward-looking statements to be covered by
the safe-harbor provisions for forward-looking statements. Words
such as "may," "will," "expect," "believe," "anticipate,"
"project," "plan," "intend," "estimate," and "continue," and their
opposites and similar expressions are intended to identify
forward-looking statements. The forward-looking
statements contained in this press release include, but are not
limited to, the anticipated impact of the recently completed
acquisition on ACETO’s earnings. ACETO cautions you
that these statements are not guarantees of future performance or
events and are subject to a number of uncertainties, risks and
other influences, many of which are beyond ACETO’s control, which
may influence the accuracy of the statements and the projections
upon which the statements are based. Factors that could
cause actual results to differ materially from those set forth or
implied by any forward-looking statement include, but are not
limited to, risks and uncertainties discussed in ACETO’s reports
filed with the Securities and Exchange Commission, including, but
not limited to, ACETO’s Annual Report on Form 10-K for the fiscal
year ended June 30, 2016 and other filings. Copies of these filings
are available at www.sec.gov.
Any one or more of these uncertainties, risks
and other influences could materially affect ACETO’s results of
operations and whether forward-looking statements made by ACETO
ultimately prove to be accurate. In addition, periodic
high-margin product sales may have a positive material financial
impact in a given quarter that may be non-recurring in future
quarters, thereby rendering one quarter's performance not useful as
a predictor of future quarters' results. ACETO’s actual
results, performance and achievements could differ materially from
those expressed or implied in these forward-looking
statements. ACETO undertakes no obligation to publicly
update or revise any forward-looking statements, whether from new
information, future events or otherwise.
Investor Relations Contact:
LHA
Jody Burfening
jburfening@lhai.com
(212) 838-3777