Zila Completes Strategic Divestiture of Nutraceuticals Division
October 03 2006 - 8:30AM
Business Wire
Zila, Inc. (Nasdaq GM: ZILA) has completed the divestiture of its
wholly-owned subsidiary Zila Nutraceuticals, Inc. for a total cash
transaction of $37.5 million with up to an additional $3 million to
be paid through an earn-out formula dependent upon the future
performance of the business. Zila Nutraceuticals, manufacturer and
marketer of Ester-C(R) and Ester-E(R), was purchased by NBTY, Inc.
(NYSE: NTY). The sale is consistent with Zila's strategy of
focusing its business on cancer detection technologies and
divesting its non-core assets. "This sale accomplishes several very
important objectives for Zila by completing our exit from the
nutraceuticals space on favorable financial terms and providing
capital to fund our future strategic business objectives and
operations," said Zila Chairman, President and CEO, Douglas D.
Burkett, Ph.D. The Company has used part of the net proceeds from
the sale to repay the remaining outstanding funds owed in
connection with the $40 million Black Diamond Credit Facility. With
the exception of approximately $500,000 of capital lease
obligations, Zila now has no debt. The balance of the proceeds may
be used to (i) pursue opportunities focused on the development and
commercialization of cancer detection products by its
Pharmaceuticals and Biotechnology Business Units, including a
potential acquisition currently under a non-binding letter of
intent, and (ii) for general corporate purposes. Alvarez &
Marsal Corporate Finance served as exclusive financial advisor to
Zila, Inc. in connection with the sale of Zila Nutraceuticals,
Inc., as well as in the securing of the $40 million credit facility
with Black Diamond Commercial Finance, L.L.C. that was retired from
the proceeds of such sale. About Zila, Inc. Zila, Inc.,
headquartered in Phoenix, is a leading cancer diagnostic company
initially focused on oral cancer: Zila Pharmaceuticals is dedicated
to establishing ViziLite(R) Plus as the new standard of care for
the early detection of oral abnormalities that could lead to
cancer. Zila Biotechnology is focused on achieving regulatory
approval for the next generation oral cancer diagnostic,
OraTest(R), followed by the development of additional applications
of its cancer detection technologies including products for the
early detection of cervical and esophageal cancer. For more
information about Zila, visit www.zila.com. This press release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are based
largely on Zila's expectations or forecasts of future events, can
be affected by inaccurate assumptions and are subject to various
business risks and known and unknown uncertainties, a number of
which are beyond the Company's control. Therefore, actual results
could differ materially from the forward-looking statements
contained herein. A wide variety of factors could cause or
contribute to such differences and could adversely impact revenues,
profitability, cash flows and capital needs. There can be no
assurance that the forward-looking statements contained in this
press release will, in fact, transpire or prove to be accurate. For
a more detailed description of these and other cautionary factors
that may affect Zila's future results, please refer to Zila's Form
10-K for its fiscal year ended July 31, 2005. Zila, Inc. (Nasdaq
GM: ZILA) has completed the divestiture of its wholly-owned
subsidiary Zila Nutraceuticals, Inc. for a total cash transaction
of $37.5 million with up to an additional $3 million to be paid
through an earn-out formula dependent upon the future performance
of the business. Zila Nutraceuticals, manufacturer and marketer of
Ester-C(R) and Ester-E(R), was purchased by NBTY, Inc. (NYSE: NTY).
The sale is consistent with Zila's strategy of focusing its
business on cancer detection technologies and divesting its
non-core assets. "This sale accomplishes several very important
objectives for Zila by completing our exit from the nutraceuticals
space on favorable financial terms and providing capital to fund
our future strategic business objectives and operations," said Zila
Chairman, President and CEO, Douglas D. Burkett, Ph.D. The Company
has used part of the net proceeds from the sale to repay the
remaining outstanding funds owed in connection with the $40 million
Black Diamond Credit Facility. With the exception of approximately
$500,000 of capital lease obligations, Zila now has no debt. The
balance of the proceeds may be used to (i) pursue opportunities
focused on the development and commercialization of cancer
detection products by its Pharmaceuticals and Biotechnology
Business Units, including a potential acquisition currently under a
non-binding letter of intent, and (ii) for general corporate
purposes. Alvarez & Marsal Corporate Finance served as
exclusive financial advisor to Zila, Inc. in connection with the
sale of Zila Nutraceuticals, Inc., as well as in the securing of
the $40 million credit facility with Black Diamond Commercial
Finance, L.L.C. that was retired from the proceeds of such sale.
About Zila, Inc. Zila, Inc., headquartered in Phoenix, is a leading
cancer diagnostic company initially focused on oral cancer: -- Zila
Pharmaceuticals is dedicated to establishing ViziLite(R) Plus as
the new standard of care for the early detection of oral
abnormalities that could lead to cancer. -- Zila Biotechnology is
focused on achieving regulatory approval for the next generation
oral cancer diagnostic, OraTest(R), followed by the development of
additional applications of its cancer detection technologies
including products for the early detection of cervical and
esophageal cancer. For more information about Zila, visit
www.zila.com. This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements are based largely on Zila's
expectations or forecasts of future events, can be affected by
inaccurate assumptions and are subject to various business risks
and known and unknown uncertainties, a number of which are beyond
the Company's control. Therefore, actual results could differ
materially from the forward-looking statements contained herein. A
wide variety of factors could cause or contribute to such
differences and could adversely impact revenues, profitability,
cash flows and capital needs. There can be no assurance that the
forward-looking statements contained in this press release will, in
fact, transpire or prove to be accurate. For a more detailed
description of these and other cautionary factors that may affect
Zila's future results, please refer to Zila's Form 10-K for its
fiscal year ended July 31, 2005.
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