Chemicals sold for $109 million
14 Jan 2002
Pharmaceutical Resources (PRI) intends to acquire the FineTech fine chemical business of International Specialty Products (ISP).
ISP FineTech, based in Haifa in Israel, conducts proprietary research and development in the area of synthetic molecules and provides forensic analytical services to the pharmaceutical industry. It also manufactures complex synthetic active pharmaceutical ingredients at the Israel plant. ISP's Columbus, OH facility manufactures large-scale active pharmaceutical ingredients and intermediates.
PRI anticipates that the acquisition will have neither a materially accretive nor a materially dilutive effect on earnings in fiscal year 2002. ISP FineTech achieved revenues of approximately $25 million in 2001.
Following the acquisition, Dr. Arie A. Gutman, the founder of FineTech and currently President of ISP FineTech, will become the chief executive officer of the acquired business, which will be a subsidiary of PRI. In addition, Dr. Gutman will be nominated to PRI's board of directors.
The proposed acquisition will include the assets and intellectual property of ISP's pharmaceutical custom manufacturing business, principally located in Columbus, OH and all of the capital stock of ISP FineTech.
The acquisition, for consideration of approximately $109 million, is expected to be financed by a combination of equity, cash-on-hand and PRI's existing debt facility, and will not require the approval of PRI's shareholders.
The acquisition will be accounted for using the purchase method and is subject to customary regulatory approvals and certain other conditions. The agreement provides for a break-up fee of $3 million payable to ISP if, for certain reasons, PRI decides not to continue with the transaction.
