Cambrex to Sell Units

Proceeds should be $450 million.
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Cambrex

(CBM) - Get Report

is selling two of its businesses to drug developer Lonza in a deal worth $460 million.

Under an agreement between the companies, Lonza will acquire Cambrex's Bioproducts and Biopharma segments, while Cambrex will focus on its human health businesses.

Proceeds, which are expected to be $450 million after taxes and other costs, will be used to pay off debt and to help fund a special dividend to Cambrex stockholders, which is likely to be between $13.50 and $14.50 a share.

The sale should close within 90 to 120 days, after which Cambrex expects to secure new lines of credit, giving the company an additional $125 million to $150 million to use toward the special distribution.

"After a thorough and deliberate process, our board of directors determined that the sale of our Bio businesses to Lonza represents the most compelling means for realizing value for Cambrex stockholders," said James Mack, the company's chairman, president and CEO.

Shares rose 6% to $22.88 Tuesday.

Last week, Cambrex said it signed an agreement to sell two of its human health division's manufacturing facilities in order to streamline the business and focus on its three largest plants.