Lowenstein Sandler is representing Aceto Corporation (Aceto) in entering into a stalking-horse asset purchase agreement with an affiliate of New Mountain Capital to sell Aceto’s chemicals business assets for gross proceeds of $338 million in cash, plus the assumption of certain liabilities and subject to certain adjustments, on a cash-free and debt-free basis. Lowenstein also represented Aceto’s subsidiary, Rising Pharmaceuticals, Inc. (Rising), in entering into a stalking-horse asset purchase agreement with Shore Suven Pharma to sell Rising’s pharmaceutical assets for gross proceeds of $19 million in cash and the assumption of over $120 million of certain liabilities. 

Aceto is an international company engaged in the development, marketing, sale, and distribution of human health products, pharmaceutical ingredients, and performance chemicals. New Mountain Capital is a leading, growth-oriented investment firm with over $20 billion in assets under management. Shore Suven Pharma is a joint venture of Shore Pharma and Suven Life Sciences Limited. 

The sales will be conducted under Section 363 of the U.S. Bankruptcy Code, subject to court-approved bidding procedures, potential receipt of higher and better offers at auction, and approval by the court. 

To facilitate the sale and satisfy its debt obligations, Aceto and its U.S. subsidiaries have filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. Aceto’s foreign chemicals business subsidiaries are not included in the filing but will be included in the sale. Aceto expects to complete the dispositions of its chemicals and Rising businesses before its fiscal year ends on June 30, 2019. The representation has required a multifaceted effort, including coordination among various Lowenstein practice groups, including corporate, M&A, tax, and real estate, as well as seamless integration with foreign counsel, as the client operates in more than 15 non-U.S. jurisdictions.  

These transactions are the result of a comprehensive evaluation of strategic alternatives to address the company’s debt burden. After assessing its options, Aceto’s board determined that court-supervised sales of the company’s chemicals business assets and Rising are in the best interest of the company and its stakeholders. The decision provides stability and deep capital resources to the company and ensures the continuity of customer, partner, and supplier relationships critical to the company’s business operations and success.

Aceto will operate its business in the ordinary course while it completes the sales of its chemicals business assets and Rising. To that end, Aceto has received a commitment for debtor-in-possession (DIP) financing of $60 million from a syndicate of lenders led by Wells Fargo Bank, N.A. The DIP financing will fund Aceto’s working capital needs through the completion of the sales transactions and support payments to vendors and suppliers for post-petition purchases in the ordinary course. 

Lowenstein Sandler is serving as Aceto’s legal counsel. PJT Partners LP is acting as the company’s financial advisor and investment banker, and AP Services, an affiliate of AlixPartners LLP, is serving as Aceto’s Chief Financial Officer and advisor. The Lowenstein team includes Kenneth A. Rosen, Steven E. Siesser, Paul Kizel, Michael S. Etkin, Jeffrey Cohen, Wojciech F. Jung, Philip J. Gross, Michael Savetsky, and Michael Papandrea.