Stockholders to Receive Cash Dividend of Approximately $13.50 to $14.50 Per
Share
Cambrex to Continue as Streamlined Human Health Business Focused On
Value-Added Pharmaceutical Services
Company to Submit Proposal to Declassify Board At 2007 Annual Stockholder
Meeting
EAST RUTHERFORD, N.J., Oct. 24 /PRNewswire-FirstCall/ -- Cambrex
Corporation ("Cambrex") (NYSE: CBM) today announced that it has entered
into a definitive stock purchase agreement with Lonza Group AG ("Lonza")
(SWX: LONN) for the sale of the businesses that comprise its Bioproducts
and Biopharma segments ("Bio Businesses"), for total cash consideration of
$460 million. The Company expects to realize net proceeds, after paying
taxes and transaction- related costs, of approximately $450 million which
will be used to repay all outstanding debt under the Company's existing
credit facility and to help fund a special dividend to stockholders. The
sale of the Bio Businesses, which is subject to Cambrex stockholder
approval and customary regulatory approvals, is expected to close in 90 to
120 days.
(Logo: http://www.newscom.com/cgi-bin/prnh/20000613/CAMBREXLOGO )
Following completion of the sale, Cambrex expects to pay a special
dividend that will be funded by the net proceeds from the sale plus an
additional $125 million to $150 million from new lines of credit that
Cambrex expects to secure after closing. Assuming financing can be arranged
on favorable terms at the currently anticipated levels, Cambrex expects the
special dividend to be approximately $13.50 to $14.50 per share.
Cambrex currently has three business segments -- Bioproducts, Biopharma
and Human Health. The Bioproducts business manufactures and markets
research, therapeutic and analytical testing products based on cell biology
and used in drug discovery and biotherapeutic manufacturing. The Biopharma
business offers process development services and contract manufacturing
under cGMP conditions for therapeutic proteins, vaccines and other biologic
drugs. The Human Health business features a broad portfolio of products and
services for process development and manufacturing of approximately 120
active pharmaceutical ingredients, advanced pharmaceutical intermediates
and specialty intermediates for animal health, x-ray diagnostic and other
applications. Combined 2005 sales from the Bio Businesses accounted for 42%
of the Company's total gross sales of $452 million.
James A. Mack, Chairman, President and Chief Executive Officer of
Cambrex Corporation, said: "We are pleased to announce the successful
completion of this important phase of our strategic review. After a
thorough and deliberate process, our Board of Directors determined that the
sale of our Bio Businesses to Lonza represents the most compelling means
for realizing value for Cambrex stockholders. In addition to receiving a
substantial cash dividend, stockholders can look forward to additional
benefits from their continuing investment in our strong Human Health
business."
"Going forward, Cambrex will focus on growth opportunities in the
markets we currently serve through our Human Health business. Our robust
portfolio of products and services in value-added niches, coupled with our
proven capabilities and first-rate regulatory record, uniquely position
Cambrex to support both branded and generic manufacturers throughout the
drug development life cycle. We are confident that our strong customer
relationships and talented employee base give us a solid foundation for
winning new business in the growing healthcare markets," continued Mr.
Mack. "Concurrently, we will be working to aggressively reduce our
corporate overhead in light of the decrease in both the size and complexity
of Cambrex's operations. We expect these cost reductions and the ongoing
benefits from the rollout of Lean Six Sigma programs to create additional
value for our stockholders. Consistent with our fiduciary duties, we will
also continue to evaluate strategic opportunities for the Human Health
business as they arise."
Stefan Borgas, Chief Executive Officer of Lonza, said: "For Lonza, this
is the largest acquisition in our long company history and represents a
significant commitment and leap forward toward achieving our long-time goal
of becoming one of the world's leading suppliers to our existing and new
customers in the pharmaceutical, healthcare and other life science
industries. We are now closer to this goal than ever before."
The Bio Businesses transaction is not subject to any financing
conditions and is subject to approval by Cambrex stockholders and customary
regulatory reviews. Under the terms of the agreement with Lonza, Cambrex's
Board of Directors may consider unsolicited superior acquisition proposals
that include these businesses if presented between signing and stockholder
approval, subject to a customary break-up fee.
Background on Strategic Alternatives Process
In February 2006, as part of Cambrex's publicly announced evaluation of
strategic alternatives, the Cambrex Board of Directors announced the
retention of Bear, Stearns & Co. Inc. to advise on options for maximizing
stockholder value. Over the course of the following months, Bear Stearns
solicited and received indications of interest from numerous potential
strategic and financial buyers seeking to acquire all or parts of the
Company. The Board of Directors decided that the combined sale of the
Bioproducts and Biopharma businesses on the terms proposed by Lonza is the
most effective means of delivering maximum value to stockholders for these
businesses, as it represents an opportunity to realize premium value in a
highly tax-efficient manner. The Board decided to retain the Human Health
business as it believes that more value can be created by continuing to
operate this business than through the other alternatives presented in the
strategic review process to date. As a further result of the evaluation of
strategic alternatives and as part of the drive to improve the
profitability of the remaining Human Health business, the Company recently
announced the sale of its subsidiaries based in Cork, Ireland and Landen,
Belgium.
Upon completion of the Bio Businesses transaction, Cambrex will
concentrate on deploying its resources to maximize the potential of the
Human Health business through reducing overhead by approximately $8 million
per year and refocusing and streamlining the business. The Human Health
business has consistently delivered industry-leading sales growth and
EBITDA margins, even in periods of industry overcapacity and reduced market
demand. We believe we are uniquely well positioned to capitalize on the
expected growth in global consumption of active pharmaceutical ingredients,
Human Health's primary business. The Company plans to accelerate the
rebalancing of its product line and enhance its position in high-value,
fast-growing niche markets through internal development programs and
selective acquisitions in order to drive future growth.
Corporate Governance Initiatives
Cambrex Corporation also announced today that its Board of Directors,
in order to give stockholders a greater voice in the future direction of
the Company, will include a proposal to declassify the Company's Board of
Directors at the Company's 2007 Annual Meeting of Stockholders. This
proposal underscores the Company's commitment to being responsive to
stockholders and implementing best practices in corporate governance. If
stockholders approve declassification, the Board also expects to implement
majority voting for directors.
Bear, Stearns & Co. Inc. acted as financial advisor to Cambrex in
connection with the transaction and rendered a fairness opinion to
Cambrex's Board of Directors. Wachovia Securities also rendered a fairness
opinion. Milbank, Tweed, Hadley & McCloy LLP acted as legal advisor to the
Company.
Conference Call and Presentation
A call for Analysts and Investors will be held at 9:30 a.m. Eastern
Time on Tuesday, October 24. Those wishing to participate should call
888-634-4003 for domestic callers and 706-634-6653 for international
callers, with the conference ID number of 9510185. A copy of a presentation
providing an update on the Company's strategic alternative process is
accessible by visiting the Investor Relations section on the Cambrex
website located at http://www.cambrex.com. A telephone replay of the conference
call will be available through midnight October 31, 2006 by calling
800-642-1687 for domestic callers and 706-645-9291 for international
callers, with the conference ID number of 9510185.
Proxy Statement
Cambrex Corporation plans to file with the SEC and mail to its
stockholders a Proxy Statement in connection with a special meeting of
stockholders to be called to approve the Bio Businesses transaction. The
Proxy Statement will contain important information about Cambrex
Corporation, the transaction and related matters. Investors and security
holders are urged to read the Proxy Statement carefully when it is
available. Investors and security holders will be able to obtain free
copies of the Proxy Statement and other documents filed with the SEC by
Cambrex Corporation through the web site maintained by the SEC at
http://www.sec.gov. In addition, investors and security holders will be able to
obtain free copies of the Proxy Statement from Cambrex Corporation by
contacting Peter Thauer, Senior Vice President, General Counsel and
Secretary, Cambrex Corporation, One Meadowlands Plaza, 15th Floor, East
Rutherford, NJ, Phone: 201-804-3005.
Participants in the Solicitation
Cambrex Corporation and its executive officers and directors may be
deemed, under SEC rules, to be participants in the solicitation of proxies
from Cambrex Corporation's stockholders with respect to the proposed Bio
Businesses transaction. Information regarding the executive officers and
directors of Cambrex Corporation is included in its definitive Proxy
Statement for its 2006 annual meeting filed with the SEC on June 9, 2006.
More detailed information regarding the identity of potential participants,
and their direct or indirect interests, by securities, holdings or
otherwise, will be set forth in the Proxy Statement to be filed with the
SEC in connection with the proposed Bio Businesses transaction.
About Cambrex
Cambrex is a global, diversified life sciences company dedicated to
providing products and services to accelerate and improve the discovery and
commercialization of human therapeutics. The Company currently employs
approximately 2,000 worldwide. For more information, please visit
http://www.cambrex.com
Forward Looking Statements
This news release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and Rule
3b-6 under The Securities Exchange Act of 1934, including, without
limitation, statements regarding expected performance, especially
expectations with respect to sales, research and development expenditures,
earnings per share, capital expenditures, acquisitions, divestitures,
collaborations, or other expansion opportunities. These statements may be
identified by the fact that words such as "expects", "anticipates",
"intends", "estimates", "believes" or similar expressions are used in
connection with any discussion of future events and financial and operating
performance. The 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 including but not limited to, global economic trends,
pharmaceutical outsourcing trends, competitive pricing or product
developments, government legislation and/or regulations (particularly
environmental issues), tax rate, interest rate, technology, manufacturing
and legal issues, changes in foreign exchange rates, performance of
minority investments, uncollectible receivables, loss on disposition of
assets, cancellation or delays in renewal of contracts, and lack of
suitable raw materials or packaging materials, the possibility that the
value of the acquisition of PermaDerm(TM) cultured skin may not be realized
or that our plans to obtain a Humanitarian Device Exemption, completion of
clinical trials and commercialization of PermaDerm cultured skin in the
United States may not be successful, the Company may not receive regulatory
approval for its products, the outcome of the evaluation of strategic
alternatives, the satisfaction of the conditions to closing set forth in
the stock purchase agreement with Lonza and the availability of financing
on favorable terms in order to fund the portion of the special dividend
that is not being funded from proceeds of the sale.
For further details and a discussion of these and other risks and
uncertainties, investors are cautioned to review the Cambrex 2005 Annual
Report on Form 10-K, including the Forward-Looking Statement section
therein, and other filings with the Securities and Exchange Commission,
including the Current Report on Form 8-K filed on October 24, 2006. The
Company undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
SOURCE Cambrex Corporation
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Related links:
http://www.cambrex.com/
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CONTACT:
Luke M. Beshar, Executive Vice President &
CFO, +1-201-804-3010, luke.beshar@cambrex.com, or Robert Thomson,
Director, Investor Relations, +1-201-804-3047,
bob.thomson@cambrex.com
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