Biopharma company Suven Life Sciences has entered into an asset purchase agreement with U.S. firm Aceto Corporation to buy the assets of Rising Pharmaceuticals and its subsidiaries.
A ‘stalking-horse’ asset purchase agreement, this is to be done through Suven’s joint venture partner Shore Suven Pharma Inc. and would be subject to the court-approved bidding process under Section 363 of the U.S. Bankruptcy Code, Suven said in a regulatory filing on Friday.
Bankrupt firm’s assets
A ‘stalking-horse’ agreement pertains to a bid on the assets of a bankrupt company. While Shore Suven Pharma is a JV of Suven Life Sciences and Shore Pharma Investments LLC of USA, Rising Pharmaceuticals is a part of Aceto. “This potential acquisition of Rising’s assets would transform Shore Suven Pharma into a strong U.S. generic pharmaceutical company.
“Leveraging Rising’s extensive product portfolio is to become vertically integrated with our world-class API, and finished dose manufacturing capabilities will enable us to serve U.S. customers better,” Suven Life Sciences CEO and chairman Venkat Jasti said.
Cash proceeds of $15 mn
A regulatory filing by the Nasdaq-listed Aceto said the pact with Shore Suven Pharma Inc. to sell the assets of Rising Pharmaceuticals and its subsidiaries was for a gross cash proceeds of $15 million, plus the assumption of operating liabilities and customer obligations related to the acquired business on a cash-free and debt-free basis. “The opportunity to work with Rising’s suppliers and employees to ensure continuity of product supply to customers in connection with this proposed integration will be our top priority,” said Vimal Kavuru, who will serve as CEO of Shore Suven Pharma. He founded Shore Pharma Investments and is a member of Aceto’s Board of Directors.
“This proposed transaction will help Rising balance its asset light business model through the opportunity to vertically integrate with a drug development lab and achieve greater control over its business,” William C. Kennally III, CEO of Aceto, said.
Aceto and its US subsidiaries had filed voluntary petitions under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of New Jersey (Newark) on February 19.
