On 18 April 2016, Recipharm announced that it had entered into two separate agreements to acquire pharmaceutical contract development and manufacturing operations from Kemwell. The first acquisition comprises operations in the US and Sweden, and the second acquisition comprises operations in India. The conditions for the first acquisition have now been fulfilled and Recipharm will complete this transaction today. The second acquisition, regarding Kemwell’s pharmaceutical operations in India, is conditional on governmental approvals, and is expected to close before year end.
The acquisition now to complete is comprising Cirrus Pharmaceuticals Inc., with operations in the US, with services including development of inhalation, liquid,semi-solid, solid and parenteral products with emphasis on early formulation work as well as development of analytical methods and testing, and Kemwell AB in Sweden, with services primarily including manufacturing of APIs, solids and semi-solid formulations. The sellers of Kemwell’s operations in the US and Swedenare Kemfin Holdings Private Ltd and a minority seller.
Purchase price and issue of shares
The acquisition price for Kemwell AB and Cirrus Pharmaceuticals Inc. amounts to approximately USD 85 million on a cash and debt free basis.With regard to the estimated net debt of USD 10.2 million, the preliminary purchase price amounts to approximately USD 75 million, of which USD 55 million is to be paid through a share issue of class B shares at a subscription price of SEK 145.06 per share, and the remainder in cash. The Board of Directors today, by virtue of the authorisation from the Extraordinary General Meeting on 10 May 2016, resolved on a share issue in kind of 3,159,572 series B shares to the sellers of Kemwell AB. The new shares are expected to be registered with the Swedish Companies Registration Office around 26 May 2016. The cash part of the purchase price for Kemwell AB and Cirrus PharmaceuticalsInc. preliminarily amounts to approximately USD 19.6 million.
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Kemfin and the Minority Seller have undertaken not to sell or in other respects transfer their respective share holdings in Recipharm in respect of the share issue in kind during a period of 12 months from the closing date.
Directed share issue in cash
As previously announced, Kemfin and the Minority Seller, provided they receive shares in the issue in kind as described above prior to the record date 23 May 2016 in the ongoing rights issue of Recipharm, have agreed to participate in the rights issue through the exercise of subscription rights. Since Kemfin and the Minority Seller will not receive any subscription rights in the rights issue,the Board of Directors today, by virtue of the authorisation from the Extraordinary General Meeting on 10 May 2016, resolved on a directed share issue in cash of 631,914 series B shares to the sellers of Kemwell AB at a subscription price of SEK 82 per share, corresponding to the subscription price in the rights issue. At full subscription, the rights issue of approximately SEK805 million and the directed share issue of approximately SEK 51 million as stated above means that Recipharm will receive a total of approximately SEK 856 million before issue costs.
Date: October 8, 2018
Source: West
