ALBANY, N.Y., March 24, 2014 /PRNewswire/ -- AMRI (NASDAQ:
AMRI) today announced that it has signed a definitive agreement to
acquire all the outstanding shares of Cedarburg Pharmaceuticals,
Inc. for $38.2 million in cash. The
transaction, including $2.8 million
of assumed liabilities, is valued at $41
million. Cedarburg Pharmaceuticals is a contract developer
and manufacturer of technically complex active pharmaceutical
ingredients (API's) for both generic and branded customers. The
transaction is consistent with AMRI's strategy to be the preeminent
supplier of custom and complex drug development services and
product to both the branded and generic pharmaceutical
industry.
"We are very excited to be joining efforts with Cedarburg as they bring a unique blend of
expertise in complex API, a scalable business infrastructure and
extensive customer relationships that will augment our existing
capabilities and services," said William S.
Marth, AMRI's president and chief executive officer. "This
transaction represents an important first step in building out our
API capabilities, broadens our offerings and customer base and
provides us with an ideal platform to pursue additional value
creation opportunities."
Located in Grafton, Wisconsin,
Cedarburg Pharmaceuticals is a trusted, long-time partner to many
of the industry's leading pharmaceutical companies and is well
respected for its expertise in developing technically
differentiated APIs, its reliability of supply and track record of
quality. Cedarburg's core
capabilities include controlled substances, steroids,
prostaglandins, vitamin D analogs, conjugation chemistry and
inorganics for the analgesic, ophthalmology and oncology
therapeutic areas. Cedarburg has
provided API development and manufacturing support for 13 approved
products. Cedarburg's attractive
development pipeline includes multiple late stage products and is
expected to be an important contributor for future growth.
On a stand-alone basis, Cedarburg's forecasted full year 2014 revenue
is approximately $19 million, with
adjusted EBITDA between $5.5 million and
$5.7 million, implying a purchase price multiple of
approximately 2 times 2014 revenue and approximately 7 times 2014
adjusted EBITDA at the midpoint of the range. Adjusted EBITDA
excludes any deal related costs or purchase accounting impacts.
The transaction is expected to close in early April 2014. Based on the anticipated timing of
the close, the acquisition is expected to add between $13 and $14 million to AMRI's revenue in 2014.
AMRI anticipates full year run-rate synergies of approximately
$1.5 million of EBITDA within 12
months of closing and the acquisition is expected to be accretive
to AMRI's 2014 adjusted diluted EPS in the range of $0.06 to $0.07 per share. Items excluded from
non-GAAP financial results are expected to include all
transaction-related costs, including amortization of intangible
assets. The acquisition and associated fees are expected to be
financed through cash currently held by AMRI.
Cedarburg is expected to
continue to operate independently within AMRI's API business unit.
Chuck Boland, currently co-founder
and executive vice president of business development will lead the
Cedarburg team and report into
George Svokos, AMRI's senior vice
president sales and general manager - API.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, such as
EBITDA and adjusted diluted EPS, which are adjusted to exclude,
among other things, the impact of interest income and expense,
depreciation and amortization expense, and income tax expense or
benefit. We exclude these items from the non-GAAP financial
measures because they are outside our normal operations. There are
limitations in using non-GAAP financial measures, as they are not
prepared in accordance with generally accepted accounting
principles, and may be different than non-GAAP financial measures
used by other companies. In particular, we believe that the
inclusion of supplementary non-GAAP financial measures in this
press release helps investors to gain a meaningful understanding of
our core operating results and future prospects without the effect
of these often-one-time charges, and is consistent with how
management measures and forecasts the Company's performance,
especially when comparing such results to prior periods or
forecasts. Non-GAAP results also allow investors to compare
the Company's operations against the financial results of other
companies in the industry who similarly provide non-GAAP results.
The non-GAAP financial measures included in this press release are
not meant to be considered superior to or a substitute for results
of operations prepared in accordance with GAAP. Cedarburg
Pharmaceutical's projected 2014 EBITDA and the contribution to
AMRI's adjusted diluted EPS are only provided on a non-GAAP basis.
It is not feasible to provide reconciliation to the most comparable
projected U.S. GAAP measure because the excluded items are
difficult to predict and estimate and are primarily dependent on
future events.
Conference Call and Webcast
AMRI will hold a conference call at 10:00
a.m. ET on Monday, March 24,
2014 to discuss the transaction. The conference call can be
accessed by dialing 888-455-2260 (domestic calls) or 719-325-2464
(international calls) at 9:50 a.m. ET
and entering passcode 6793528. The audio webcast will be available
live via the Internet and can be accessed on the company's website
at www.amriglobal.com. Replays of the audio webcast can also be
accessed for up to 90 days after the call via the investor area of
the company's website at
www.amriglobal.com/investor_relations/.
About AMRI
Albany Molecular Research, Inc. (AMRI) is a global contract
research and manufacturing organization offering customers fully
integrated drug discovery, development and manufacturing services.
For over 22 years, AMRI has demonstrated its adaptability as the
pharmaceutical and biotechnology industries have undergone
tremendous change in response to multiple challenges. This
experience, a track record of success and locations in the United States, Europe and Asia now provides our customers with
SMARTSOURCING™, a full range of value-added opportunities providing
customers with informed decision-making, enhanced efficiency and
more successful outcomes at all stages of the pipeline. AMRI has
also successfully partnered R&D programs and is actively
seeking to out-license its remaining programs for further
development. For more information about AMRI, please visit our
website at www.amriglobal.com or follow us on Twitter
(@amriglobal).
Forward-looking Statements
This press release includes forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties. These statements include, but
are not limited to, statements regarding the pending acquisition of
Cedarburg Pharmaceuticals, Inc., the projected revenue and non-GAAP
EBITDA of Cedarburg, Cedarburg's projected contribution to AMRI's
adjusted diluted EPS, the potential synergies associated with the
transaction, the potential impact on AMRI's operations and
financial results, statements made by the company's Chief Executive
Officer, statements regarding the strength of the company's
business and prospects, statements regarding the actions taken to
reduce cost and improve operating performance, and statements
concerning the company's momentum and long-term growth, including
expected results for 2014 and possible investment opportunities.
Readers should not place undue reliance on our forward-looking
statements. The company's actual results may differ materially from
such forward-looking statements as a result of numerous factors,
some of which the company may not be able to predict and may not be
within the company's control. Factors that could cause such
differences include, but are not limited to, the ability of the
Company to close the transaction with Cedarburg and effectively integrate
Cedarburg's business; possible
negative impacts to the revenue expected to be received by
Cedarburg following the closing of
the transaction; trends in pharmaceutical and biotechnology
companies' outsourcing of chemical research and development,
including softness in these markets; sales of Allegra® and the
impact of the "at-risk" launch of generic Allegra®, the OTC
conversion of Allegra® and the generic and OTC sales of Allegra in
Japan on the company's receipt of
significant royalties under the Allegra® license agreement; the
success of the sales of other products for which the company
receives royalties; the risk that the company will not be able to
replicate either in the short or long term the revenue stream that
has been derived from the royalties payable under the Allegra®
license agreements; the risk that clients may terminate or reduce
demand under any strategic or multi-year deal; the company's
ability to enforce its intellectual property and technology rights;
the company's ability to obtain financing sufficient to meet its
business; the company's ability to successfully comply with
heightened FDA scrutiny on aseptic fill/finish operations; the
results of further FDA inspections; the company's ability to
effectively maintain compliance with applicable FDA and DEA
regulations; the company's ability to integrate past or future
acquisitions and make such acquisitions accretive to the company's
business model; the company's ability to take advantage of
proprietary technology and expand the scientific tools available to
it; the ability of the company's strategic investments and
acquisitions to perform as expected, as well as those risks
discussed in the company's Annual Report on Form 10-K for the year
ended December 31, 2013 as filed with
the Securities and Exchange Commission on March 17, 2014, and the company's other SEC
filings. Cedarburg revenue and
EBITDA, potential increases in AMRI's adjusted diluted EPS,
potential synergies available following closing of the pending
transaction and other forward looking information offered by senior
management today represent a point-in-time estimate and are based
on information as of the date of this press release. Senior
management has made numerous assumptions in providing this guidance
which, while believed to be reasonable, may not prove to be
accurate. Numerous factors, including those noted above, may cause
actual results to differ materially from the guidance provided. The
company expressly disclaims any current intention or obligation to
update the guidance provided or any other forward-looking statement
in this press release to reflect future events or changes in facts
assumed for purposes of providing this guidance or otherwise
affecting the forward-looking statements contained in this press
release.
SOURCE AMRI