-- Strategically extends AMRI's analytical offerings in rapidly
expanding area of outsourcing services
-- Expected to be accretive in 2016 to non-GAAP diluted EPS
-- Conference call today at 9:00 am
ET to discuss transaction
ALBANY, New York, Dec. 15, 2015 /PRNewswire/ -- AMRI (NASDAQ:
AMRI) today announced that it has acquired all the outstanding
equity interests of Whitehouse Laboratories, a leading provider of
testing services that includes chemical and material analysis,
method development and validation and quality control verification
services to the pharmaceutical, medical device and personal care
industries. Total consideration is $54
million in cash, and an additional $2
million in shares of AMRI common stock contingent upon
Whitehouse Labs achieving certain 2015 targets.
"We are very pleased to acquire Whitehouse Labs, extending
AMRI's analytical services expertise and offerings, a critical
function for all aspects of pharmaceutical development and
manufacturing," said William S.
Marth, AMRI's president and chief executive officer. "With
the proliferation of ever-tightening standards in the life sciences
sector and mounting concern regarding quality and safety of
pharmaceutical products and medical devices, Whitehouse Labs meets
the increasingly complex needs of customers we service and will
augment our discovery, development and manufacturing services
nicely."
"For Whitehouse Labs, joining with AMRI validates our company's
reputation and success and will extend our ability to address
customers' analytical and testing needs, which is a rapidly
expanding area of outsourcing within the life sciences industry,"
said Brian Mulhall, Co-Founder of
Whitehouse Labs. "Favorable dynamics are increasing the trend among
biopharmaceutical manufacturers to outsource testing services and
our capabilities in analytical testing and diverse client base are
highly complementary to AMRI. We are very pleased to be joining the
AMRI team and look forward to working together to achieve our
common goals."
Whitehouse Labs Background
Whitehouse Labs, based in
Lebanon, New Jersey, operates a
highly regarded analytical and testing business with 2015 estimated
revenue of approximately $11 million
and 2015 estimated adjusted EBITDA of approximately $6 million, implying a purchase price multiple of
approximately 9 times 2015 adjusted EBITDA. Whitehouse Labs will
continue to operate independently within AMRI's DDS segment.
Adjusted EBITDA excludes any deal related costs or purchase
accounting impacts.
Whitehouse Labs offers a comprehensive array of testing
solutions for life sciences from materials and excipients,
container qualification and container closure integrity testing,
routine analytical chemistry, drug delivery systems and device
qualification programs, packaging, distribution, and stability and
storage programs.
Increased government regulation and complexity of testing,
combined with mounting demand for independent verification and
pressure to reduce fixed laboratory costs are all factors that are
increasing the trend for outsourced analytical services.
Specifically, new industry protocols for container closure
integrity testing (CCIT), conducted in lieu of sterility testing as
a component of the stability protocol for sterile products, have
been proposed by the U.S. Food and Drug Administration. As a
recognized leader in container closure integrity and qualification
testing, Whitehouse Labs is well positioned to support this
expanding demand. Whitehouse Labs offers state-of-the-art
solutions, including in-depth method development and validation,
and is believed to be the only outsourced provider housing all of
the major modern leak detection technologies in one facility.
Whitehouse Labs scientists are recognized thought leaders in
container closure integrity testing and are currently working with
the FDA on improving the knowledge and effectiveness of CCIT
guidelines.
Transaction Details and Financing
The transaction was
signed and closed simultaneously. AMRI financed the transaction
with cash on hand and borrowings under its $30 million revolving credit facility. The
transaction is expected to be accretive in 2016 to AMRI's non-GAAP
diluted earnings per share. AMRI intends to provide its 2016
financial guidance in mid-February
2016.
Any shares of AMRI common stock (the "Shares") issued in
connection with the transaction will be offered and sold in a
private placement pursuant to Regulation D of the Securities Act of
1933, as amended (the "Securities Act"). The Shares have not been
registered under the Securities Act, or the securities laws of any
other jurisdiction, and may not be offered or sold in the United States absent registration under or
an applicable exemption from such registration requirements. This
press release does not constitute an offer to sell, or a
solicitation of an offer to purchase, the Shares in any
jurisdiction in which such offer or solicitation would be
unlawful.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, such as
adjusted EBITDA, which is adjusted to exclude, among other things,
the impact of interest income and expense, depreciation and
amortization expense, income tax expense or benefit, and deal
related costs and purchase accounting impacts. 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. However, 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. 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 9:00 a.m. ET on
December 15, 2015 to discuss the
transaction. The conference call can be accessed by dialing (866)
208-5728 (domestic calls) or (224) 633-1279 (international calls)
at 8:50 a.m. ET and entering passcode
3958177. A live webcast with slides will also be available and can
be accessed on the company's website at www.amriglobal.com. Replays
of the webcast can also be accessed for up to 90 days after the
call via the investor area of the company's website at
http://ir.amriglobal.com.
About AMRI
Albany Molecular Research Inc. (AMRI) is a
global contract research and manufacturing organization that has
been working with the Life Sciences industry to improve patient
outcomes and the quality of life for more than two decades. With
locations in North America,
Europe and Asia, our key business segments include
Discovery and Development Services (DDS), Active Pharmaceutical
Ingredients (API) and Drug Product Manufacturing. Our DDS segment
provides comprehensive services from hit identification to IND,
including expertise with diverse chemistry, library design and
synthesis, in vitro biology and pharmacology, drug
metabolism and pharmacokinetics, as well as natural products. API
Manufacturing supports the chemical development and cGMP
manufacture of complex API, including potent, controlled
substances, biologics, peptides, steroids and cytotoxic compounds.
Drug Product Manufacturing supports drug product development
through commercial scale production of complex liquid-filled and
lyophilized parenteral formulations. 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 acquisition of Whitehouse Labs, the
projected revenue and non-GAAP EBITDA of Whitehouse Labs, the
potential synergies associated with the transaction, the potential
impact on AMRI's operations and financial results, and statements
made by the company's chief executive officer and by Whitehouse
Labs's founder and chief executive officer. 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
effectively integrate the Whitehouse Labs business; possible
negative impacts to the revenue expected to be received by the
Whitehouse Labs businesses; trends in pharmaceutical and
biotechnology companies' outsourcing of manufacturing services and
chemical research and development, including softness in these
markets; the termination of the royalties received by the Company
under the Allegra® license agreement, based on the expiration in
2015 of the patents underlying the license; 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 needs; 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, 2014 as filed with the Securities
and Exchange Commission on March 16,
2015, and the company's other SEC filings.