-- Conference Call at 8:30 a.m. ET Today --
Cambrex Corporation (NYSE: CBM), the leading manufacturer of small
molecule innovator and generic Active Pharmaceutical Ingredients
(APIs), and finished dosage forms, today announced it has entered
into a definitive agreement to acquire Avista Pharma Solutions
(Avista), a contract development, manufacturing, and testing
organization, for approximately $252 million. Avista is a
portfolio company of Ampersand Capital Partners, a leading
healthcare focused private equity firm. With this
acquisition, Cambrex will enter the large and growing market for
early stage small molecule development and testing services.
Avista offers a broad suite of scientifically differentiated
services ranging from API and drug product development and cGMP
manufacturing to stand-alone analytical, microbiology testing and
solid state sciences. The acquisition of Avista further
strengthens Cambrex’s position as the leading fully integrated
small molecule contract development and manufacturing organization
(CDMO) across the entire drug lifecycle.
“We are excited to announce our acquisition of
Avista, which further rounds out our small molecule service
offering by adding a full complement of early stage development
capabilities for both API and finished dosage form as well as
comprehensive analytical testing services. The addition of
Avista further underscores our commitment to providing the broadest
possible range of world class services to our global customer
base,” commented Steve Klosk, President and CEO of Cambrex. “Like
the Halo transaction in September, this acquisition opens up an
exciting new segment of the market for Cambrex and brings a large
number of new customer relationships to Cambrex. These new
relationships will provide cross selling opportunities for
Cambrex’s API and finished dosage form services, and will
significantly increase the funnel of molecules that may advance to
commercial status, where Cambrex has always excelled.”
“This transaction affirms the reputation that
our dedicated employee base has established as a trusted early
stage CDMO with a track record of world class customer service,
technical expertise and strong growth,” commented Pat Walsh, CEO of
Avista Pharma. “We are very excited to be joining the Cambrex team
and believe the growth synergies as a result of this combination
will be significant.”
Commenting on the transaction, David Parker, of
Ampersand Capital Partners, said, “We are very proud of what has
been accomplished by Pat and the entire Avista management team.
We believe Avista will continue to generate strong
performance under Cambrex’s ownership and we wish Cambrex and the
employees of Avista every success. We look forward to
following their achievements in the years to come.”
Avista operates four facilities located in Durham, NC, Longmont,
CO, Agawam, MA and Edinburgh, Scotland, UK, comprising over 200,000
square feet of space. All sites have a strong reputation for
quality and excellent regulatory track records and contain state of
the art assets. Avista has worked on more than 200 small molecules
for approximately 180 customers so far in 2018, providing some
combination of analytical testing, early stage process chemistry,
formulation development, manufacturing, or solid state chemistry
services. Including the microbiological testing business,
Avista has over 400 active customers, and is expected to generate
approximately $65 million in annual revenue in 2018. Avista’s
330 person workforce will join Cambrex’s 1,700 employees across the
United States and Europe.
Cambrex will acquire Avista for approximately
$252 million in total cash consideration. The acquisition is
expected to be funded with a combination of cash on hand and
borrowings under Cambrex’s existing revolving credit facility which
in conjunction with this transaction, will be increased through the
accordion feature. Cambrex has secured committed financing
for the proposed increase. Upon completion of the
transaction, Cambrex’s net leverage ratio, pro forma for the
transaction, is expected to be approximately 2.4 times EBITDA as
defined under the Company’s credit agreement. Cambrex expects
the transaction to be accretive to adjusted earnings per share in
2019.
Completion of the transaction is subject to
customary closing conditions and is expected to occur during the
fourth quarter of 2018.
Wells Fargo Securities, LLC is serving as
exclusive financial advisor to Cambrex and Ropes & Gray LLP is
serving as legal counsel.
Bourne Partners is serving as exclusive
financial advisor to Avista and Goodwin Procter LLP is serving as
legal counsel.
Conference Call and WebcastA
conference call to discuss Cambrex’s acquisition of Avista will
begin at 8:30 a.m. ET on Tuesday, November 20, 2018 and can be
accessed by calling 1-877-260-1479 for domestic and +1-334-323-0522
for international. Please use the passcode 3270158 and call
approximately 10 minutes prior to the start time. A webcast will be
available in the Investors section of the Cambrex website located
at www.cambrex.com. A telephone replay of the conference call
will be available through Tuesday, November 27, 2018 by calling
1-888-203-1112 for domestic and +1-719-457-0820 for international.
Please use the passcode 3270158 to access the replay.
About CambrexCambrex
Corporation is an innovative life sciences company that provides
products, services and technologies to accelerate the development
and commercialization of small molecule therapeutics. The Company
offers Active Pharmaceutical Ingredients (APIs), finished dosage
forms, advanced intermediates and enhanced drug delivery products
for branded and generic pharmaceuticals. Development and
manufacturing capabilities include enzymatic biotransformations,
high potency APIs, high energy chemical synthesis, controlled
substances and continuous processing. For more information, please
visit www.cambrex.com
About Avista PharmaAvista
Pharma Solutions is a contract development, manufacturing, and
testing organization that understands what it takes to rapidly
advance products through every stage of development. With over
200,000 square feet of laboratory and manufacturing space in the
U.S. and U.K., Avista offers a broad suite of scientifically
differentiated services ranging from early stage discovery, API and
Drug Product development and cGMP manufacturing to stand-alone
analytical and microbiology testing support. Led by its broad
experience and collaborative approach, Avista is committed to
finding the shortest, most efficient path to success for its
clients – success that goes beyond science. For more information,
please visit www.avistapharma.com
About Ampersand Capital PartnersFounded in
1988, Ampersand is a middle market private equity firm dedicated to
growth-oriented investments in the healthcare sector. With
offices in Boston and Amsterdam, Ampersand leverages its unique
blend of private equity and operating experience to build value and
drive superior long-term performance alongside its portfolio
company management teams. Ampersand has helped build numerous
market-leading companies across each of our core healthcare
sectors, including Avista Pharma, Brammer Bio, Confluent Medical,
Genoptix, Talecris Biotherapeutics and Viracor-IBT Laboratories.
Additional information about Ampersand is available at
www.ampersandcapital.com
Forward-Looking StatementsThis
document contains “forward-looking statements” within the meaning
of the federal securities laws, including statements about revenue
and earnings expectations for the acquired business of Avista and
that the transaction will be accretive to Cambrex Corporation (the
“Company”) in 2019. These and other forward-looking
statements may be identified by the fact that they use words such
as “guidance,” “expects,” “anticipates,” “intends,” “estimates,”
“believes” or similar expressions. Any forward-looking
statements contained herein are based on current plans and
expectations and involve risks and uncertainties that could cause
actual outcomes and results to differ materially from current
expectations. Important factors that could cause such
differences include the possibility that conditions to closing the
transaction could not be met or that the benefits from the
acquisition may not be as anticipated. The factors described
in Item 1A of Part I of the Company’s Annual Report on Form 10-K
for the period ended December 31, 2017 captioned “Risk Factors,” or
otherwise described in the Company’s filings with the SEC provide
additional examples of such risks and uncertainties that may cause
the Company’s actual results to differ materially from the
expectations the Company describes in its forward-looking
statements, including, but not limited to, customer and product
concentration, the Company’s ability to win new customer contracts
and renew existing contracts on favorable terms, the Company’s
ability to cross-sell services to existing customers, significant
declines in sales of products to the Company’s customers,
pharmaceutical outsourcing trends, competitive pricing or product
developments, market acceptance and adoption rate of its customers’
products, government legislation and regulations (including those
pertaining to environmental issues), tax rate, interest rate,
technology, manufacturing and legal issues, including the outcome
of outstanding litigation, environmental matters, changes in
foreign exchange rates, uncollectible receivables, the timing
and/or volume of orders or shipments and the Company’s ability to
meet its production plan and customer delivery schedules, expected
timing of completion of capacity expansions, the Company’s ability
to successfully integrate acquired businesses, loss on disposition
of assets, cancellations or delays in renewal of contracts, lack of
suitable raw materials, the Company’s ability to receive regulatory
approvals for its products, continued demand in the U.S. for late
stage clinical products and the successful outcome of the Company’s
investment in new products.
For further details and a discussion of these
and other risks and uncertainties, investors are encouraged to
review the Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2017, including the Forward-Looking Statement
and Risk Factors sections therein, and other filings with the
SEC. The Company cautions investors and potential investors
not to place undue reliance on the forward-looking statements
contained in this press release and to give careful consideration
to the risks and uncertainties listed above and contained in the
Company’s SEC filings. The forward-looking statements in this press
release speak only as of the date of this document, and the Company
undertakes no obligation to update or revise any of these
statements.
Non-GAAP MeasuresNet leverage
ratio, pro forma for the transaction, is calculated as estimated
net debt at the closing of the transaction divided by forecasted
Adjusted EBITDA for the combined company at such time. The Company
defines Adjusted EBITDA as operating profit plus depreciation and
amortization expense, adjusted for the impact of any potential
acquisitions, restructuring activities and certain other
charges. Other companies may have different definitions of
net leverage ratio and Adjusted EBITDA. Therefore, these measures
may not be comparable with non-GAAP financial measures provided by
other companies. Net leverage ratio and Adjusted EBITDA
should not be considered alternatives to measurements required by
U.S. GAAP, such as net income or operating profit. The
Company uses net leverage ratio and Adjusted EBITDA among several
other metrics to assess and analyze its operational results and
trends. Reconciliations of these measures to measures
calculated in accordance with GAAP are not available without
unreasonable effort due to the unavailability of certain
information needed to calculate certain reconciling items,
including interest expense and income tax expense.
Contact: |
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Cambrex
Corporation |
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Gregory Sargen |
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Executive Vice
President & CFO |
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Tel: +201.804.3055 |
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Email: gregory.sargen@cambrex.com |
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