Akzo Nobel to Acquire Biomanufacturing
Business from Covance |
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Princeton, N.J., April 24, 2001 — Covance Inc. (NYSE: CVD), one of the world's largest and most comprehensive drug development services companies, today announced that Akzo Nobel's pharma business unit Diosynth will acquire Covance Biotechnology Services Inc. (CBSI) in a cash transaction valued at approximately $190 million. Closing of the transaction is targeted for mid-year of 2001.
"We welcome the purchase by Diosynth," said Chris Kuebler, Chairman and CEO of Covance Inc. "Using Diosynth's position as a reliable and committed partner for the innovative pharmaceutical industry is the best opportunity for growth at CBSI."
Covance expects to receive net proceeds from the sale of approximately $100 million. In addition, operating lease guarantees, CBSI debt obligations and liabilities will be assumed by Akzo Nobel. Covance will use proceeds from the sale to reduce its senior revolver.
CBSI is a leading provider of contract biomanufacturing services to major pharmaceutical and biotechnology companies for preclinical studies, clinical trials and commercial production, with a state-of-the-art manufacturing facility in North Carolina, USA. The CBSI acquisition represents an important strategic move for Akzo Nobel. Through the acquisition of CBSI, Diosynth gains access to the large professional development group at CBSI, together with its commercial network in the US biotech market. This combined with Diosynth's extensive industrial experience with Active Pharmaceutical Ingredient (API) manufacturing will create one of the world's leading companies in biopharmaceutical manufacturing.
"This acquisition strengthens Diosynth's potential for continued growth as a supplier of active ingredients to the innovative pharmaceutical industry. It will also enable Diosynth to increase its market strength as one of the strategic technology platforms of Akzo Nobel Pharma, alongside Organon and Intervet," said Paul K. Brons, the member responsible for the Pharma Group on Akzo Nobel's Board of Management. "The acquisition brings the added benefit of increasing Akzo Nobel's access to explorative biotech activities, especially those in the USA," he added.
"The timing of this acquisition is perfect," said Johan Evers, General Manager of Diosynth. "We have just opened our large downstream processing facility. And our new cell culture and fermentation plant will be on stream by the end of 2002. Combined with the increasing demand for biotechnology-based medicines, the acquisition will greatly enhance Diosynth's position as a supplier of biopharmaceutical APIs," explained Mr. Evers.
Lehman Brothers represented Covance in connection with this transaction. CS First Boston represented Akzo Nobel.
Covance Inc.
Covance, with headquarters in Princeton, N.J., is one of the world's largest and most comprehensive drug development services companies with 2000 revenues of $868 million, operations currently in 17 countries, and approximately 7,900 employees worldwide. Pro forma income statements excluding financial results for Covance's biomanufacturing business for the full year 2000 will be available post closing of the transaction.
Akzo Nobel
Akzo Nobel, based in the Netherlands, serves customers throughout the world with healthcare products, coatings and chemicals. Consolidated sales for 2000 totaled some EUR 14 billion (USD 13 billion, GBP 8.5 billion). The Company currently employs 68,400 people in 75 countries.
Diosynth
Diosynth, a business unit of Akzo Nobel, is a market-driven and technology based manufacturer of active pharmaceutical ingredients. Headquartered in the Netherlands, Diosynth has about 2300 employees and reached sales in 2000 of $350 million (EUR 380 million).
This announcement includes forward-looking statements. Covance has based these forward-looking statements on its current expectations and projections about future events. Although Covance believes that its assumptions made in connection with the forward-looking statements are reasonable, no assurances can be given that their assumptions and expectations will prove to have been correct. These forward-looking statements are subject to various risks, uncertainties and assumptions, including the assumption that the transaction will close as anticipated. Covance undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this announcement might not occur.
Note: Today's news release, along with other news about Covance, Akzo Nobel and Diosynth, is available on the Internet at www.covance.com, www.akzonobel.com and www.diosynth.com.
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