US life science chemicals company Cambrex has altered the terms of its agreement to sell Rutherford Chemicals and will make a slightly higher loss on the new transaction.
Rutherford makes speciality and fine chemicals for industrial applications, and the divestment is intended to allow Cambrex to focus on its core human health and bioscience activities, serving the pharmaceutical and biotechnology industries.
Cambrex had agreed to sell Rutherford to Arsenal Capital Partners for $55 million in cash at closing, a $2 million subordinated interest-bearing note due in five and a half years, and $8 million in performance-related payments based on Rutherford's operating profits over the next three years.
At the time the deal was first announced in August, Cambrex said it would receive $64 million in cash for Rutherford, and would make a $50 million loss on the transaction. Now, the company says its loss will be $53-$57 million.
The proceeds of the transaction will be used to pay off outstanding debt at a time when Cambrex says it plans to "accelerate organic growth and pursue strategic acquisitions in the biotechnology and pharmaceutical markets."