* Deal for about $922 mln in cash
* Carlyle, GTCR to use debt, equity financing to fund deal
* Albany Molecular shares jump as much as 8.9 pct
(Adds analyst comment)
By Divya Grover
June 6 Contract drug manufacturer and research
company Albany Molecular Research Inc said on Tuesday
it had agreed to be taken private by buyout firms Carlyle Group
LP and GTCR LLC for about $922 million in cash.
The deal comes amid consolidation in the contract research
services industry, which has benefited in recent years from
pharmaceutical companies' drive to cut costs, reduce clinical
trial durations and expand their research and development
Albany Molecular offers a range of contract services for
life sciences companies, from discovering new drugs to
manufacturing products and active ingredients. Clinical research
organizations can prove to be lucrative investments for private
The company's stockholders will get $21.75 for each share
they hold, representing a premium of about 10 percent to the
stock's Monday close.
The offer represents a premium of about 61 percent since
April 7, when Dealreporter reported that the company was
exploring a sale.
The company wanted to refinance its balance sheet this year
after its $358 million acquisition of Therapeutics SpA, also
known as Euticals, William Blair analyst John Kreger wrote in a
"...a go-private transaction was the best way to clean up
the balance sheet, gain greater flexibility to pursue additional
deals, and more aggressively integrate operations without having
to report earnings quarterly," Kreger said.
Shares of the Albany, New York-headquartered company, which
had already risen close to 50 percent since speculation about
the deal broke, shot up about 9 percent to $21.52 in afternoon
trading on Tuesday. Shares of Carlyle Group fell as much as 2
percent to $17.20.
Albany Molecular will pay $35 million if it terminates the
deal for a superior proposal or fails to obtain the minimum
required stockholder approval for the transaction, according to
a regulatory filing. (bit.ly/2szmueB)
In case Carlyle and GTCR terminate the deal, they will have
to pay Albany Molecular a termination fee of $70 million,
according to the filing.
Carlyle and GTCR will use debt and equity financing to fund
the deal, Albany Molecular said.
Credit Suisse was Albany Molecular's financial adviser.
Barclays and Morgan Stanley advised Carlyle, while RBC Capital
Markets advised GTCR.
Reuters had reported on Monday that GTCR and Carlyle were in
talks to team up and buy Albany Molecular Research.
(Reporting by Divya Grover in Bengaluru; Editing by Sai Sachin
Ravikumar and Shounak Dasgupta)