PORT WASHINGTON, N.Y., March 07, 2019 (GLOBE NEWSWIRE) -- 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 Shore Suven Pharma, Inc. to sell the assets of Rising Pharmaceuticals and Rising’s subsidiaries for gross cash proceeds of $15 million, plus the assumption of operating liabilities and customer obligations related to the acquired business on a cash-free and debt-free basis.
Shore Suven Pharma, Inc. is a joint venture between Suven Life Sciences Limited, an India-based provider of contract research and manufacturing services for the global life sciences industry, and Shore Pharma Investments, LLC, a company founded by Vimal Kavuru to acquire generic drug assets. Mr. Kavuru is a member of Aceto’s Board of Directors.
“We are very pleased to have completed a ‘stalking horse’ asset purchase agreement for Rising Pharmaceuticals. With its deep expertise in the generic drugs industry, Shore Suven Pharma ensures a seamless transition of Rising’s portfolio, customer programs and manufacturing and drug development relationships,” said William C. Kennally III, Chief Executive Officer of Aceto. “Strategically, this proposed transaction will help Rising balance its asset light business model through the opportunity to vertically integrate with a drug development lab and achieve greater control over its business going forward.”
“We are extremely pleased to have this opportunity to expand our global footprint. Leveraging Rising’s product portfolio to become vertically integrated with our well-respected API and finished dose manufacturing capabilities will enable us to better serve U.S. customers,” said Mr. Venkat Jasti, CEO and Chairman of Suven Life Sciences.
“The opportunity to work with Rising’s suppliers and employees to ensure continuity of product supply to customers in connection with this proposed integration will be our top priority. We have an experienced generic pharmaceutical management team ready to facilitate a smooth transition while maximizing the value of these assets. We look forward to working towards a successful closing,” said Mr. Kavuru, who will serve as CEO of Shore Suven Pharma.
The proposed sale will be conducted through a Court-supervised process under Section 363 of the Bankruptcy Code, subject to Court-approved bidding procedures, potential receipt of higher and better offers at auction; approval of the sale by the Court; and, the satisfaction of certain other conditions, including a mutual release of claims against certain of the buyer parties and their affiliates. As previously announced, Aceto has also entered into a “stalking horse” agreement to sell its chemicals business through a Court-supervised process under Section 363 of the Bankruptcy Code. 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.
Shore Suven Pharma, Inc. is represented by Reed Smith LLP. Citadel Management Consulting, a pharmaceutical-focused investment banking firm based in Hyderabad, India, also advised Shore Suven Pharma on this transaction.
To facilitate the sale of both Rising Pharmaceuticals and its chemicals business assets, 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. The Company expects to complete the dispositions of its chemicals and Rising businesses before its fiscal year end on June 30, 2019.
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.
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.
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, 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, 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 stalking horse 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.