Charles River Implements $150 Million Accelerated Stock Repurchase Program
February 24 2011 - 9:00AM
Business Wire
Charles River Laboratories International, Inc. (NYSE: CRL)
announced today that it has implemented a new accelerated stock
repurchase (ASR) program to repurchase $150 million of common
stock, as part of its previously announced authorization from its
Board of Directors to repurchase up to $750 million of common
stock. This new program follows a $300 million ASR program that was
completed on February 11, 2011, and resulted in the repurchase of a
total of approximately 8.9 million shares.
Under the $150 million ASR program entered into with Morgan
Stanley & Co. Incorporated, the Company will receive an initial
delivery of approximately 3.7 million shares. The actual number of
shares that Charles River repurchases under the ASR program will be
determined based on a discount to the daily volume-weighted average
price (VWAP) of its common stock over the course of a calculation
period, which may extend approximately three months or conclude
earlier at Morgan Stanley’s option. The Company intends to fund the
stock repurchases through a new $150 million term loan.
New $150 Million Term
Loan
On February 24, 2011, Charles River amended its existing credit
agreement with certain financial institutions to add a $150 million
term loan. The credit agreement now provides for up to $900 million
in financing, including the prior $400 million U.S. term loan and
$350 million U.S. revolving credit facility, both of which remain
in effect and outstanding.
The new $150 million term loan matures in 18 quarterly
installments. The interest rate applicable to the new term loan is
the same as the existing $400 million term loan and $350 million
revolving credit facilities. This interest rate is equal to either
the base rate (which is the higher of (1) the prime rate, (2) the
federal funds rate plus 0.50%, or (3) the one-month adjusted LIBOR
rate) or the adjusted LIBOR rate, plus an interest rate margin
based upon the Company’s leverage ratio. Based upon the Company’s
current leverage ratio including funds used for the new ASR
program, the interest rate margin is expected to be 2.50% for the
term loans and drawn amounts on the revolving loan, and 0.50% for
undrawn amounts on the revolving loan.
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. These statements
also include statements regarding the accelerated stock repurchase
program, including the number of shares to be repurchased, expected
timing and duration, the amount of capital that may be expended and
the treatment of repurchased shares, all of which may be subject to
change in the future. 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. Those risks
and uncertainties include, but are not limited to: the ability to
successfully integrate businesses we acquire; negative trends in
research and development spending, negative trends in the level of
outsourced services, or other cost reduction actions by our
customers; the ability to convert backlog to sales; special
interest groups; contaminations; industry trends; new displacement
technologies; USDA and FDA regulations; changes in law; continued
availability of products and supplies; loss of key personnel;
interest rate and foreign currency exchange rate fluctuations;
changes in tax regulation and laws; changes in generally accepted
accounting principles; and any changes in business, political, or
economic conditions due to the threat of future terrorist activity
in the U.S. and other parts of the world, and related U.S. military
action overseas. 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 23, 2011, 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
Accelerating Drug Development. Exactly. 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 approximately 7,500 employees worldwide
are focused on providing clients with exactly what they need to
improve and expedite the discovery, development through
first-in-human evaluation, 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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