Charles River Laboratories Acquires Agilux Laboratories, Inc.
September 28 2016 - 4:30PM
Business Wire
– Enhances Charles River’s Early-Stage
Capabilities in Bioanalytical Services –
Charles River Laboratories International, Inc. (NYSE: CRL)
announced today that it has acquired Agilux Laboratories, Inc., a
Worcester, Massachusetts-based contract research organization
(CRO), that provides a suite of integrated discovery small and
large molecule bioanalytical services, drug metabolism and
pharmacokinetic (DMPK) services, and pharmacology services. The
company’s unique combination of early-stage services enhances the
flexibility and speed of its biopharmaceutical clients’ lead
identification, optimization, and candidate selection efforts.
Agilux was acquired from a holding company controlled by the
company’s founders and Ampersand Capital Partners, its only
institutional investor.
The addition of Agilux’s integrated discovery capabilities is
complementary to Charles River’s existing nonclinical portfolio.
Providing a more comprehensive service offering will improve the
efficiency of clients’ early-stage research efforts by enabling
them to seamlessly transition their drug candidates through the
discovery and safety assessment process. Charles River believes
that the acquisition of Agilux enhances its ability to work with
clients earlier in the drug research process, and maintain the
relationship as molecules progress through nonclinical
development.
James C. Foster, Chairman, President and Chief Executive Officer
of Charles River said, "The acquisition of Agilux Laboratories
supports Charles River’s strategy to offer clients a broader,
integrated portfolio that enables them to work with us continuously
from the earliest stages of drug research through the nonclinical
development process. Agilux reinforces the linkage between our
discovery and safety assessment capabilities, and provides clients
with a comprehensive testing solution that spans their discovery
and regulated drug development needs. We expect to leverage
Agilux’s strong client relationships in the Boston-Cambridge
biohub, one of the most significant concentrations of medical
research in the world, and expand the reach of its discovery
bioanalytical services offering to Charles River’s global client
base.”
Financial and Transaction
Details
The purchase price was approximately $64 million in cash,
subject to certain post-closing adjustments. Agilux is expected to
generate full-year revenue of $27 million in 2016. The acquisition
is expected to be neutral to Charles River’s non-GAAP earnings per
share in the fourth quarter of 2016, and be slightly accretive to
non-GAAP earnings per share in 2017. Items excluded from non-GAAP
earnings per share are expected to include all acquisition-related
costs, which primarily include amortization of intangible assets,
transaction costs, and certain third-party integration costs.
Agilux will be reported as part of Charles River’s Discovery and
Safety Assessment (DSA) segment.
Use of Non-GAAP Financial
Measures
This news release contains non-GAAP financial measures, such as
non-GAAP earnings per diluted share, which exclude the amortization
of intangible assets and other charges related to our acquisitions
(including expenses associated with evaluating acquisitions and
certain third-party integration costs). 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 news 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. We believe that the financial impact of our
acquisitions (and in certain cases, the evaluation of such
acquisitions, whether or not ultimately consummated) is often large
relative to our overall financial performance, which can adversely
affect the comparability of our results on a period-to-period
basis. In addition, certain activities, such as business
acquisitions, happen infrequently and the underlying costs
associated with such activities do not recur on a regular basis.
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 news release are not meant to
be considered superior to or a substitute for results of operations
prepared in accordance with GAAP. The Company intends to continue
to assess the potential value of reporting non-GAAP results
consistent with applicable rules and regulations. A reconciliation
of non-GAAP earnings per share attributable to the acquisition of
Agilux Laboratories, Inc. for 2016 and 2017 to the most directly
comparable GAAP financial measure has not been included because it
is impracticable to determine the allocation of the purchase price
and certain other adjustments at this time due to certain
information not being ascertainable or accessible. Therefore, not
all of the information necessary for a quantitative reconciliation
of the forward-looking non-GAAP financial measures to the most
directly comparable GAAP financial measures is available to the
Company without unreasonable efforts. The forward-looking non-GAAP
financial measures may be materially different from the
corresponding non-GAAP financial measures.
Caution Concerning Forward-Looking
Statements
This news release includes forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements may be identified by the use of words
such as “anticipate,” “believe,” “expect,” “will,” “may,”
“estimate,” “plan,” “outlook,” and “project” and other similar
expressions that predict or indicate future events or trends or
that are not statements of historical matters. Forward-looking
statements include statements in this news release regarding the
acquisition of Agilux Laboratories, Inc. and Charles River’s
expectations with respect to the impact of Agilux on the Company,
its service offerings, revenue, revenue growth rates and earnings;
Charles River’s projected future performance including revenue and
earnings per share; as well as Charles River’s future growth in the
area of discovery and safety assessment services. Forward-looking
statements are based on Charles River’s current expectations and
beliefs, and involve a number of risks and uncertainties that are
difficult to predict and that could cause actual results to differ
materially from those stated or implied by the forward-looking
statements. A further description of these risks, uncertainties,
and other matters can be found in the Risk Factors detailed in
Charles River's Annual Report on Form 10-K as filed on February 12,
2016, as well as other filings we make with the Securities and
Exchange Commission. Because forward-looking statements involve
risks and uncertainties, actual results and events may differ
materially from results and events currently expected by Charles
River, and Charles River assumes no obligation and expressly
disclaims any duty to update information contained in this news
release except as required by law.
About Charles River
Charles River provides essential products and services to help
pharmaceutical and biotechnology companies, government agencies and
leading academic institutions around the globe accelerate their
research and drug development efforts. Our dedicated employees are
focused on providing clients with exactly what they need to improve
and expedite the discovery, early-stage development and safe
manufacture of new therapies for the patients who need them. To
learn more about our unique portfolio and breadth of services,
visit www.criver.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20160928006461/en/
Charles River Laboratories International, Inc.Investor
Contact:Susan E. Hardy, 781-222-6190Corporate Vice President,
Investor Relationssusan.hardy@crl.comorMedia Contact:Amy
Cianciaruso, 781-222-6168Corporate Vice President, Public
Relationsamy.cianciaruso@crl.com
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