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Print Edition StoriesMonday, April 26, 2010
Charles River Labs pays $1.6B for Chinese R&D firm
By Mass High Tech staff
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Charles River Laboratories International Inc. has acquired Chinese drug research and development outsourcing firm WuXi PharmaTech (Cayman) Inc. for about $1.6 billion.
As part of the deal, the combined company will operate as Charles River (NYSE: CRL), and current Charles River chairman, president and CEO James Foster will continue in his role at the helm, while WuXi chairman and CEO Ge Li will take on the role of corporate executive vice president and president of global discovery and China services, a new segment of the company. Li and two WuXi directors will join the board of directors at Charles River.
The acquisition deal, which is expected to close in the fourth quarter of 2010, is a combined cash and stock buyout. Charles River noted in a press release that it plans to use both cash on hand and debt financing, including a $1.25 billion credit facility from J.P. Morgan Chase and Bank of America Merrill Lynch, to pay for the acquisition. The deal has been approved by both companies’ board of directors and now awaits stockholder approval.
Wilmington-based Charles River, which is a provider of outsourced laboratory and research services, said the addition of WuXi will expand its product and service offerings, “from molecule creation through first-in-human testing,” to the biotechnology, pharmaceutical and medical device industries.
Neither company mentioned layoffs, but Charles River noted its plan to form a “joint integration team” that will determine the logistics related to optimizing the two companies’ resources.
In January, Charles River announced plans to close a facility in Shrewsbury and lay off 300 people. The company made several strategic acquisitions in 2009 and also opened a 60,000 square-foot facility in Shanghai.
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