ACETO Corporation (OTC: ACETQ), 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 agreed to sell its chemicals business
assets to an affiliate of New Mountain Capital (“NMC”), a leading
growth-oriented investment firm with over $20 billion in assets
under management.
The asset purchase agreement was entered into
following the conclusion of a court-supervised sale process
conducted under Section 363 of the U.S. Bankruptcy Code. Under that
process, an asset purchase agreement between Aceto and NMC was
executed, dated February 18, 2019, to sell the chemical business
assets as the “stalking horse agreement”. After receiving a
qualified offer from another bidder reflecting higher and/or
otherwise better terms, a court-supervised sale process was held on
April 12, 2019. Ultimately, NMC was selected as the successful
bidder. The transaction is subject to approval of the U.S.
Bankruptcy Court at a hearing scheduled for April 16, 2019, and is
expected to close in this calendar quarter, subject to satisfaction
of certain conditions.
“We are very pleased by the value realized,
through the sales process, for the global sourcing network,
regulatory and technical expertise and established customer base
associated with Aceto’s chemicals business assets. The transaction
with New Mountain Capital provides the company’s chemical-related
businesses with deep capital resources to invest in growth
opportunities for the benefit of their customers and suppliers,”
said William C. Kennally III, Chief Executive Officer of Aceto.
“Aceto is a leader in its space, and we are
excited to partner with the team to support the next phase of
growth,” said Andre Moura, Managing Director at New Mountain
Capital. “We look forward to working closely with management to
help the Company realize its full growth potential by scaling
capabilities in key markets and investing in new organic and
inorganic initiatives while maintaining the high level of quality
and reliability which have always been the hallmarks of Aceto’s
success.”
Lowenstein Sandler LLP is acting as legal
advisor to Aceto. PJT Partners LP is acting as Aceto’s financial
advisor and investment banker to lead the sales processes under the
bidding procedures. AP Services, an affiliate of AlixPartners LLP,
is also serving as Chief Financial Officer and advisor to Aceto.
Ropes and Gray LLP is acting as legal advisor to New Mountain. CIM
Partners LLC is acting as financial advisor to New Mountain.
As previously announced, 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 to facilitate the sales of
both its chemicals business assets and its subsidiary Rising
Pharmaceuticals and to satisfy its debt obligations. As previously
announced, on April 9, 2019, Aceto’s finished dosage, generic
pharmaceutical subsidiary, Rising Pharmaceuticals, Inc., obtained
Bankruptcy Court approval to sell substantially all of its assets,
and Aceto expects that transaction to close later this month.
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.
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 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, 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 timing for consummation of the referenced
sale, 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 pending
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
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