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 Shore Suven Pharma,
Inc. to sell the assets of Rising Pharmaceuticals and Rising’s
subsidiaries for gross cash proceeds of $15 million, plus the
assumption of operating liabilities and customer obligations
related to the acquired business on a cash-free and debt-free
basis.
Shore Suven Pharma, Inc. is a joint venture between
Suven Life Sciences Limited, an India-based provider of contract
research and manufacturing services for the global life sciences
industry, and Shore Pharma Investments, LLC, a company founded by
Vimal Kavuru to acquire generic drug assets. Mr. Kavuru is a member
of Aceto’s Board of Directors.
“We are very pleased to have completed a ‘stalking
horse’ asset purchase agreement for Rising Pharmaceuticals. With
its deep expertise in the generic drugs industry, Shore Suven
Pharma ensures a seamless transition of Rising’s portfolio,
customer programs and manufacturing and drug development
relationships,” said William C. Kennally III, Chief Executive
Officer of Aceto. “Strategically, this proposed transaction will
help Rising balance its asset light business model through the
opportunity to vertically integrate with a drug development lab and
achieve greater control over its business going forward.”
“We are extremely pleased to have this opportunity
to expand our global footprint. Leveraging Rising’s product
portfolio to become vertically integrated with our well-respected
API and finished dose manufacturing capabilities will enable us to
better serve U.S. customers,” said Mr. Venkat Jasti, CEO and
Chairman of Suven Life Sciences.
“The opportunity to work with Rising’s suppliers
and employees to ensure continuity of product supply to customers
in connection with this proposed integration will be our top
priority. We have an experienced generic pharmaceutical management
team ready to facilitate a smooth transition while maximizing the
value of these assets. We look forward to working towards a
successful closing,” said Mr. Kavuru, who will serve as CEO of
Shore Suven Pharma.
The proposed sale will be conducted through a
Court-supervised process under Section 363 of the Bankruptcy Code,
subject to Court-approved bidding procedures, potential receipt of
higher and better offers at auction; approval of the sale by the
Court; and, the satisfaction of certain other conditions, including
a mutual release of claims against certain of the buyer parties and
their affiliates. As previously announced, Aceto has also entered
into a “stalking horse” agreement to sell its chemicals business
through a Court-supervised process under Section 363 of the
Bankruptcy Code. 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.
Shore Suven Pharma, Inc. is represented by Reed
Smith LLP. Citadel Management Consulting, a pharmaceutical-focused
investment banking firm based in Hyderabad, India, also advised
Shore Suven Pharma on this transaction.
To facilitate the sale of both Rising
Pharmaceuticals and its chemicals business assets, Aceto and its
U.S. subsidiaries 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) on February 19, 2019. The Company expects to
complete the dispositions of its chemicals and Rising businesses
before its fiscal year end on June 30, 2019.
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.
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.
FORWARD LOOKING STATEMENTS
This news release contains forward-looking
statements as that term is defined in the federal securities laws,
including statements regarding the proposed sales of ACETO’s
operating businesses. 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, and
the future 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, including motions and objections with respect to the
stalking horse transactions; (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, and objections filed
by parties in interest to, 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 sale of the assets of Rising Pharmaceuticals and its
subsidiaries, 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