ACETO and its U.S. Subsidiaries File
Voluntary Chapter 11 Petitions to Facilitate
SaleSecures Commitment for Debtor-in-Possession
Financing to Support Normal Course OperationsACETO
Pursuing Court-Supervised Sale of Rising
Pharmaceuticals
ACETO Corporation (Nasdaq: ACET), an international company engaged
in the development, marketing, sale and distribution of Human
Health products, Pharmaceutical Ingredients and Performance
Chemicals, announced today that it has entered into a
“stalking-horse” asset purchase agreement with an affiliate of New
Mountain Capital, a leading growth-oriented investment firm with
over $20 billion in assets under management, to sell its chemicals
business assets for gross proceeds of $338 million in cash, plus
the assumption of certain liabilities and subject to certain
adjustments, on a cash-free and debt-free basis. The sale
will be conducted under Section 363 of the U.S. Bankruptcy Code. To
facilitate the sale and satisfy its debt obligations, Aceto and its
U.S. subsidiaries have filed voluntary petitions under Chapter 11
of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
District of New Jersey (Newark). Aceto’s foreign chemicals business
subsidiaries are not included in the filing but will be included in
the sale. In addition, Aceto intends to enter into a stalking horse
agreement for its subsidiary, Rising Pharmaceuticals. Aceto expects
to complete the dispositions of its chemicals and Rising businesses
before its fiscal year end on June 30, 2019.
“For the past several months, the Board has been
conducting a comprehensive evaluation of strategic alternatives to
address the Company’s debt burden in consultation with its
financial and legal advisors while continuing to work cooperatively
with its lenders. After assessing its options, the Board has
determined that Court-supervised sales of Aceto’s chemicals
business assets and its subsidiary Rising Pharmaceuticals are in
the best interest of the Company and its stakeholders,” said
William C. Kennally III, Chief Executive Officer of Aceto. “This
decision provides stability and deep capital resources to the
Company and, importantly, ensures the continuity of customer,
partner and supplier relationships critical to the Company’s
businesses operations and success.”
Aceto will operate its business in
the ordinary course while it completes the sales of its chemicals
business assets and its subsidiary Rising
Pharmaceuticals. To that end, Aceto has received a
commitment for debtor-in-possession (DIP) financing of $60 million
from a syndicate of lenders led by Wells Fargo Bank, N.A. The DIP
financing will finance Aceto’s working capital needs through the
completion of the sales transactions and support payments to
vendors and suppliers for post-petition purchases in the ordinary
course. The proposed sales will be conducted through
Court-supervised processes under Section 363 of the Bankruptcy
Code, subject to Court-approved bidding procedures, potential
receipt of higher and better offers at auction and approval by the
Court. PJT Partners LP is acting as Aceto’s financial advisor
and investment banker to lead the sales processes under the bid
procedures and Lowenstein Sandler LLP is serving as legal advisor.
AP Services, an affiliate of AlixPartners LLP, is also serving as
Chief Financial Officer and advisor to the Company. Additional
information about Aceto’s Chapter 11 cases can be found at
http://cases.primeclerk.com/Aceto and by calling 844-216-7718, a
toll-free number for callers in the U.S. and Canada, or
347-761-3238, for international callers.Separately, Aceto
intends to file its Form 10-Q for the second fiscal quarter ended
December 31, 2018 tomorrow.
About
ACETO
ACETO Corporation, incorporated in 1947, is
focused on the global marketing, sale and distribution of Human
Health products (finished dosage form generics and nutraceutical
products), Pharmaceutical Ingredients (pharmaceutical intermediates
and active pharmaceutical ingredients) and Performance Chemicals
(specialty chemicals and agricultural protection products). With
business operations in nine countries, ACETO distributes over 1,100
chemical compounds used principally as finished products or raw
materials in the pharmaceutical, nutraceutical, agricultural,
coatings and industrial chemical industries. ACETO's global
operations, including a staff of 25 in China and 12 in India, are
distinctive in the industry and enable its worldwide sourcing and
regulatory capabilities.
About New Mountain Capital
New Mountain Capital is a New York based investment firm that
emphasizes business building and growth, rather than debt, as it
pursues long-term capital appreciation. The firm currently manages
private equity, public equity, and credit funds with over $20
billion in assets under management. New Mountain seeks out what it
believes to be the highest quality growth leaders in carefully
selected industry sectors and then works intensively with
management to build the value of these companies. For more
information on New Mountain Capital, please visit
www.newmountaincapital.com.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking statements as that
term is defined in the federal securities laws, including
statements regarding product launches and shipment schedules.
Generally, ACETO’s forward-looking 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 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. Among other statements, the statements in this
press release regarding the execution of a “stalking horse
agreement” for Rising Pharmaceuticals, the timing for consummation
of the referenced sales, the effect of the bankruptcy process, the
use of the proceeds of the DIP financing and the post-petition
operation of the Company constitute forward-looking statements.
ACETO cautions you that these statements are not guarantees of
future performance or events and are subject to several
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.
Potential risks, influences and uncertainties 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:
(i) ACETO’s ability to obtain approval with respect to motions in
the Chapter 11 cases and the Bankruptcy Court’s rulings in the
Chapter 11 cases and the outcome of the Chapter 11 cases in
general; (ii) the length of time ACETO and its U.S. subsidiaries
will operate under the Chapter 11 cases; (iii) risks associated
with third-party motions in the Chapter 11 cases, which may
interfere with ACETO and its U.S. subsidiaries’ ability to develop
and consummate the asset purchase transactions; (iv) the potential
adverse effects of the Chapter 11 cases on ACETO and its U.S.
subsidiaries’ liquidity, results of operations or business
prospects; (v) increased legal and advisor costs related to the
Chapter 11 cases and other litigation and the inherent risks
involved in a bankruptcy process; (vi) the effect of the Chapter 11
cases on the trading price in ACETO’s securities; (vii) ACETO’s
ability to fulfill its obligations to its customers, suppliers and
employees; (viii) the ability of ACETO employees and customers to
benefit from the transaction; (ix) delays in completing a sale or
other transaction; (x) ACETO’s access, on favorable terms, to any
required financing; and (xi) other risks and uncertainties
discussed in ACETO’s reports filed with the Securities and Exchange
Commission (“SEC”), including, but not limited to, ACETO’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2018 and
other SEC filings, copies of which are available at www.sec.gov.
Accordingly, no assurances can be given that any of the events
anticipated by the forward-looking statements, including, but not
limited to, the consummation of the sale of ACETO’s chemicals
business assets and the execution of a “stalking horse agreement”
for Rising Pharmaceuticals, will transpire or occur, or, if any of
them do so, what impact they will have on the results and
operations or financial condition of ACETO.
All forward-looking statements attributable to ACETO or persons
acting on behalf of ACETO are expressly qualified in their entirety
by the foregoing cautionary statements. ACETO undertakes no
obligation to publicly update or revise any forward-looking
statements, whether from new information, future events or
otherwise.
Company Contact: Jody BurfeningCommunications
Consultant jburfening@lhai.com(212) 838-3777