UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): December 15, 2015
ALBANY MOLECULAR RESEARCH, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware |
001-35622 |
14-1742717 |
(State or
other jurisdiction
of incorporation) |
(Commission
File Number) |
(IRS Employer
Identification
No.) |
26 Corporate Circle Albany, NY |
12212 |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s
telephone number, including area code: (518) 512-2000
(Former name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions ( see General Instruction A.2. below) :
¨ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into Material Definitive Agreement.
LLC Interest
Purchase Agreement
On
December 15, 2015, Albany Molecular Research, Inc., a Delaware corporation (“AMRI”) and Brian W. Mulhall and
Alan Weiss (the “Sellers”), as the members of Whitehouse Analytical Laboratories, LLC (“Whitehouse”),
entered into a definitive LLC Interest Purchase Agreement (the “Purchase Agreement”) pursuant to which AMRI
purchased 100% of Whitehouse’s membership interests (the “Transaction”) for $54 million cash (the “Cash
Consideration”) and, in the event that certain conditions are met, shares of common stock, par value $0.01, of AMRI valued
at $2 million (the “Stock Consideration”).
The
Stock Consideration, if issued, will consist of unregistered securities issued in accordance with applicable securities laws and
subject to transfer restrictions. The Cash Consideration may be adjusted in connection with a working capital post-closing adjustment
in accordance with the terms of the Purchase Agreement. AMRI has agreed to issue the Stock Consideration, subject to Whitehouse
achieving a certain financial target, within 90 days after the end of Whitehouse’s 2015 fiscal year. AMRI deposited $5.4
million of the Cash Consideration in an escrow account with Wilmington Trust, N.A. to be held in escrow and distributed in accordance
with the terms of the Escrow Agreement (as defined in the Purchase Agreement).
The
parties to the Purchase Agreement have made certain customary representations, warranties and covenants, among others: (i) representations
by the Sellers with respect to Whitehouse’s business, operations and financial condition, (ii) covenants by the Sellers to
keep information relating to Whitehouse’s business confidential, (iii) covenants by each Seller to not compete with Whitehouse’s
business and to not solicit employees from Whitehouse or AMRI, and (iv) covenants by AMRI and the Sellers to cooperate on specified
matters.
A
copy of the Purchase Agreement will be filed as an exhibit to AMRI’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2015, which will be filed with the SEC in the first quarter of 2016. The foregoing summary of the Purchase Agreement
does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement.
Item
2.01 Completion of Acquisition or Disposition of Assets.
The
disclosure provided in Item 1.01 of this report is hereby incorporated by reference into this Item 2.01.
Item
3.02 Unregistered Sales of Equity Securities.
The
disclosure provided in Item 1.01 of this report is hereby incorporated by reference into this Item 3.02.
The
Transaction was undertaken in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as
amended the (“Securities Act”) afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation
D promulgated thereunder.
Item
7.01 Regulation FD Disclosure.
On December 15,
2015, AMRI issued a press release announcing the completion of the Transaction. A copy of the press release is attached hereto
and furnished herewith as Exhibit 99.1.
Item
9.01 Financial Statements and Exhibits
| (a) | Financial Statements of Business Acquired |
| (1) | The financial statements required by Item 9.01(a) of
Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed. |
| (b) | Pro Forma Financial Information |
| (1) | The pro forma financial statements required by Item
9.01(b) of Form 8-K will be filed by amendment within 71 calendar days after the date this report on Form 8-K must be filed. |
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated December 15, 2015. |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
|
ALBANY MOLECULAR RESEARCH, INC. |
|
|
|
|
Date: December 21, 2015 |
By: |
/s/ Lori M. Henderson |
|
|
Name: Lori M. Henderson Title: Senior Vice-President,
General Counsel & Secretary |
EXHIBIT
INDEX
Exhibit No. |
|
Description |
|
|
|
99.1 |
|
Press Release dated December 15, 2015. |
Exhibit 99.1
AMRI
Acquires Whitehouse Laboratories
| · | 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, NY (December 15, 2015)
– 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 StatementsThis 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.
Contacts:
Investors: Patty Eisenhaur, 518-512-2936
Media: Gina Rothe, 518-512-2512
Albany Molecular Research, Inc. (NASDAQ:AMRI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Albany Molecular Research, Inc. (NASDAQ:AMRI)
Historical Stock Chart
From Apr 2023 to Apr 2024