DETROIT, Feb. 22, 2011 /PRNewswire/ -- Caraco
Pharmaceutical Laboratories, Ltd. (NYSE Amex: CPD) (Caraco or the
Company) announced that on February 21,
2011 it entered into a merger agreement with Sun
Pharmaceutical Industries Limited (Sun Pharma), Sun Pharma Global,
Inc, a wholly-owned subsidiary of Sun Pharma organized under the
laws of the British Virgin Islands
(Sun Global) and a newly-formed, indirect wholly-owned subsidiary
of Sun Pharma incorporated in Michigan. Sun Pharma and Sun Global
collectively own 75.8% of Caraco common stock. The merger
agreement provides that all shareholders of Caraco other than Sun
Pharma and Sun Global will receive a cash payment of
$5.25 per share upon the closing of
the transaction. As previously disclosed, Sun Pharma and Sun Global
had proposed a "going private" transaction by which Sun
Pharma, Sun Global and/or one or more of their affiliates would
acquire all of the outstanding shares of Caraco common stock not
held by Sun Pharma and Sun Global for a per share consideration of
$4.75 cash. Caraco entered into the
merger agreement based upon the recommendation and approval of the
Independent Committee of Caraco's Board of Directors and the
approval of the Board of Directors. The Independent Committee
was advised by William Blair
& Company, L.L.C. as its independent financial advisor and
Carrington Coleman as its
independent legal counsel.
The closing of the transaction is subject to certain terms and
conditions customary for transactions of this type, including
receipt of approval by the holders of a majority of Caraco's
outstanding common stock at a special meeting of stockholders. In
the merger agreement, Sun Pharma has agreed to cause all shares of
Caraco common stock owned by Sun Pharma and Sun Global to be voted
in favor of the merger. In connection with the proposed
transaction, Caraco intends to file a proxy statement and other
relevant materials with the Securities and Exchange Commission.
Upon completion of the transaction, Caraco will become a privately
held company and its common stock will no longer be traded on the
NYSE Amex.
Detroit-based Caraco develops,
markets and distributes generic pharmaceuticals to the nation's
largest wholesalers, distributors, drugstore chains and managed
care providers.
Safe Harbor: This news release may contain forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934.
Without limitation, the words "believes," "plans," "expects," and
similar expressions are intended to identify forward-looking
statements. Those statements include statements regarding our
intent, belief, and current expectation. These statements are not
guarantees of future performance and are subject to risks and
uncertainties that cannot be predicted or quantified. Consequently,
actual results could differ materially from those expressed or
implied by such forward-looking statements. Such risks and
uncertainties include, but are not limited to: (i) that the
information is of a preliminary nature and may be subject to
further adjustment; (ii) not obtaining FDA approval for new
products or delays in receiving FDA approvals; (iii) governmental
restrictions on the sale of certain products; (iv) dependence on
key personnel; (v) development by competitors of new or superior
products or cheaper products or new technology for the production
of products or the entry into the market of new competitors; (vi)
market and customer acceptance and demand for new pharmaceutical
products; (vii) availability of raw materials in a timely manner,
at competitive prices, and in required quantities; (viii) timing
and success of product development and launch; (ix) integrity and
reliability of the Company's data; (x) lack of success in attaining
full compliance with regard to regulatory and cGMP compliance; (xi)
inability to achieve successful remediation efforts (xii)
dependence on limited customer base; (xiii) occasional credits to
certain customers reflecting price reductions on products
previously sold to them and still available as shelf-stock; (xiv)
possibility of an incorrect estimate of charge-backs and the impact
of such an incorrect estimate on net sales, gross profit and net
income; (xv) dependence on few products generating majority of
sales; (xvi) product liability claims for which the Company may be
inadequately insured; (xvii) subjectivity in judgment of management
in applying certain significant accounting policies derived based
on historical experience, terms of contracts, our observations of
trends of industry, information received from our customers and
other sources, to estimate revenues, accounts receivable allowances
including chargebacks, rebates, income taxes, values of assets and
inventories; (xviii) litigation involving claims of patent
infringement; (xix) litigation involving claims for royalties
and/or options relating to a prior contract for one product and
(xx) material litigation from product recalls, (xxi) the purported
class action lawsuits alleging federal securities laws violations,
(xxii) delays in returning the Company's products to market,
including loss of market share, and (xxiii) excessive dependency
for revenues on the marketing agreement and distribution and sale
agreement, both signed with Sun Pharma; (xxiv) excessive dependency
on Sun Pharma and other third parties for manufacture of Caraco
owned products; and (xxv) inability to successfully transfer
Caraco-owned products to other manufacturing sites; (xxvi) other
risks identified from time to time in our reports and registration
statements filed with the Securities and Exchange Commission. These
forward-looking statements represent our judgment as of the date of
this report. We disclaim, however, any intent or obligation to
update our forward-looking statements.
SOURCE Caraco Pharmaceutical Laboratories, Ltd.