ACETO Announces Proposed Sale of its Chemicals Business Assets to New Mountain Capital for $338 million

Date : 02/20/2019 @ 2:39AM
Source : GlobeNewswire Inc.
Stock : Aceto Corp. (ACETQ)
Quote : 0.15  -0.0008 (-0.53%) @ 3:39PM

ACETO Announces Proposed Sale of its Chemicals Business Assets to New Mountain Capital for $338 million

Aceto Corp. (USOTC:ACETQ)
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6 Months : From Dec 2018 to Jun 2019

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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

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