[ID] => 10654
[post_author] => 5714
[post_date] => 2019-02-25 08:29:50
[post_date_gmt] => 2019-02-25 08:29:50
[post_content] => Aceto Corporation, a developer and distributor of performance chemicals and pharmaceutical ingredients, has entered into a ‘stalking-horse’ asset purchase agreement with an affiliate of New Mountain Capital to sell its chemical business assets for gross proceeds of $338m in cash, in addition to the assumption of certain liabilities and subject to certain adjustments on a cash-free and debt-free basis. New Mountain Capital, based in New York, currently manages private equity, public equity and credit funds with more than $20bn in assets under management.
The proposed sale will be conducted under section 363 of the US Bankruptcy Code. To facilitate the sale and satisfy its debt obligations, Aceto and its US subsidiaries have filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of New Jersey in Newark.
Aceto’s foreign chemicals business subsidiaries are not included in the filing but will, however, be included in the sale. Aceto also intends to enter into a stalking horse agreement for its subsidiary, Rising Pharmaceuticals, a distributor of niche, generic prescription pharmaceutical products. The company expects to complete the dispositions of its chemicals and Rising businesses before its fiscal year end on 30 June.
BUSINESS AS USUAL
“For the past several months, the board has been conducting a comprehensive evaluation of strategic alternatives to address the company’s debt burden in consultation with its financial and legal advisors while continuing to work cooperatively with its lenders,” says William C Kennally III, CEO of Aceto. “After assessing its options, the board has determined that court-supervised sales of Aceto’s chemicals business assets and its subsidiary Rising Pharmaceuticals are in the best interest of the company and its stakeholders. This decision provides stability and deep capital resources to the company and, importantly, ensures the continuity of customer, partner and supplier relationships critical to the company’s businesses operations and success.”
Aceto will continue to operate its business in the normal way while it completes the sales of its chemicals business assets and its subsidiary. Additionally, Aceto has received a commitment for debtor-in-possession (DIP) financing of $60m from a syndicate of lenders led by Wells Fargo Bank. The DIP financing will provide Aceto’s working capital needs through the completion of the sales transactions and support payments to vendors and suppliers for post-petition purchases in the ordinary course.
The proposed sales will be conducted through court-supervised processes, subject to court-approved bidding procedures, potential receipt of higher and better offers at auction and approval by the court. 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 CFO and advisor to the company.
Aceto, incorporated in 1947, operates in nine countries, including China and India, and distributes more than 1,100 chemical compounds used principally as finished products or raw materials in the pharmaceutical, nutraceutical, agricultural, coatings and industrial chemical industries.
In its first fiscal quarter results, released this past November, Kennally noted that sales at the Rising Pharmaceuticals business had declined, in part because of the loss of revenue from government entities and the “continuing challenges” in the generics market.
[post_title] => Aceto: Selling up
[post_status] => publish
[comment_status] => open
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[post_name] => aceto-selling-up
[post_modified] => 2019-02-25 08:31:37
[post_modified_gmt] => 2019-02-25 08:31:37
[post_parent] => 0
[guid] => https://www.hcblive.com/?p=10654
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Aceto has filed Chapter 11 petitions to facilitate the court-supervised sale of its chemical business assets and its Rising Pharmaceuticals subsidiary