Aceto announces proposed sale of chemical business assets for $338M in cash
Aceto announced that it has entered into a "stalking-horse" asset purchase agreement with an affiliate of New Mountain Capital, a leading growth-oriented investment firm with over $20 billion in assets under management, to sell its chemicals business assets for gross proceeds of $338 million in cash, plus the assumption of certain liabilities and subject to certain adjustments, on a cash-free and debt-free basis. The sale will be conducted under Section 363 of the U.S. Bankruptcy Code. To facilitate the sale and satisfy its debt obligations, Aceto and its U.S. subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. Aceto's foreign chemicals business subsidiaries are not included in the filing but will be included in the sale. In addition, Aceto intends to enter into a stalking horse agreement for its subsidiary, Rising Pharmaceuticals. Aceto expects to complete the dispositions of its chemicals and Rising businesses before its fiscal year end on June 30, 2019. Aceto will operate its business in the ordinary course while it completes the sales of its chemicals business assets and its subsidiary Rising Pharmaceuticals. To that end, Aceto has received a commitment for debtor-in-possession financing of $60 million from a syndicate of lenders led by Wells Fargo Bank, N.A. The DIP financing will finance 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 under Section 363 of the Bankruptcy Code, 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.