PRINCETON, N.J., March 17 /PRNewswire-FirstCall/ -- PharmaNet
Development Group, Inc. (the "Company" , "PDGI" or "PharmaNet")
(NASDAQ:PDGI), a leading provider of clinical development services
to innovative pharmaceutical, biotechnology, generic drug and
medical device companies, announced that, pursuant to the terms of
the indenture (the "Indenture") governing its 2.25% convertible
senior notes due 2024 (the "Convertible Notes"), it anticipates
that a "Fundamental Change" (as such term is defined in the
Indenture) may occur as early as March 20, 2009, subject to the
satisfaction or waiver of a number of conditions (the "Anticipated
Effective Date"). As previously announced on February 12, 2009, JLL
PharmaNet Holdings, LLC, a Delaware limited liability company
("Parent"), through PDGI Acquisition Corp., a Delaware corporation
and a wholly owned subsidiary of Parent ("Purchaser"), commenced a
tender offer for all outstanding shares of PharmaNet at a price of
$5.00 per share, net to the seller in cash (the "Offer"). On March
13, 2009, the expiration date of the Offer was extended until March
19, 2009, subject to possible further extension. The Offer was
commenced pursuant to the terms of an Agreement and Plan of Merger,
dated as of February 3, 2009 (the "Merger Agreement"), by and among
Parent, PDGI and Purchaser. Parent and Purchaser are affiliates of
JLL Partners Fund V, L.P. and JLL Partners Fund VI, L.P. (together,
the "Sponsors"), each of which is a private equity investment fund
managed by JLL Partners, a leading private equity investment fund
("JLL"). As previously disclosed, the completion of the Offer is
subject to the satisfaction or waiver of a number of conditions set
forth in the Merger Agreement, as described in the Offer to
Purchase distributed by Parent, Purchaser and the Sponsors.
Following the completion of the Offer and subject to the
satisfaction or waiver of the conditions set forth in the Merger
Agreement, as soon as reasonably practicable after the completion
of the Offer, Purchaser is expected to merge with and into PDGI
(the "Merger"), with PDGI continuing as the surviving corporation
and a wholly owned subsidiary of Parent. Given that the Offer and
the Merger are each subject to a number of closing conditions,
there can be no assurance that the Offer or the Merger will be
completed on the expected dates. The completion of the Offer will
constitute a "Fundamental Change" under the terms of the Indenture
for the Convertible Notes. Under the Indenture, in the event of a
Fundamental Change prior to August 15, 2009, each holder of the
Convertible Notes has the right to require PDGI, or its successor,
to repurchase its Convertible Notes at a price equal to 100% of the
principal amount outstanding, plus accrued and unpaid interest,
plus a make-whole payment if certain thresholds are met. Since the
price per share of the tender offer is $5.00, the holders of the
Convertible Notes will not be entitled to a make-whole payment
under the terms of the Indenture. Within 30 days following the
Fundamental Change, PDGI, or its successor, will mail a notice, in
accordance with the Indenture, to all holders indicating that a
Fundamental Change has occurred and stating that the holders have
the right described above. This press release is being issued
pursuant to the terms of the Indenture and, in connection with
prior disclosure made by PDGI, is intended to give holders notice
of the Anticipated Effective Date of the Fundamental Change. Given
the uncertainty around the projected closing date of the Offer and
the conditions applicable to the Offer and the Merger, the Company
can not state with certainty if or when the Fundamental Change will
occur. The Company does not anticipate that holders of the
Convertible Notes will elect to convert because the holders of the
Convertible Notes will be entitled to receive consideration with a
greater value upon a repurchase of the Convertible Notes following
a Fundamental Change as compared to the payment they would be
entitled to receive following a conversion of their Convertible
Notes. About JLL Partners Parent is an affiliate of the Sponsors,
each of which is a private equity investment fund managed by JLL.
Each of Parent and Purchaser were formed for the purpose of
entering into a business combination transaction with PharmaNet,
and has not carried on any business activities other than in
connection with the tender offer and merger. Founded in 1988, JLL
is a leading private equity investment firm with approximately $4.0
billion of capital under management that has invested in a variety
of industries, with special focus on healthcare and medical
services, financial services and building products. JLL makes
equity investments in middle market companies with the objective of
extricating good companies from complicated situations or building
strong companies in partnership with exceptional managers. Further
information related to JLL can be found on its website,
http://www.jllpartners.com/. About PharmaNet Development Group,
Inc. PharmaNet Development Group, Inc., a global drug development
services company, provides a comprehensive range of services to the
pharmaceutical, biotechnology, generic drug and medical device
industries. The Company offers early and late stage consulting,
Phase I clinical studies and bioanalytical analyses, and Phase II,
III and IV clinical development programs. With approximately 2,500
employees and 41 facilities throughout the world, PharmaNet is a
recognized leader in outsourced clinical development. For more
information, please visit our website at http://www.pharmanet.com/.
Advisors Skadden, Arps, Slate, Meagher & Flom, LLP acted as
legal counsel and Jefferies & Company, Inc. acted as financial
advisor to JLL for this transaction. Morgan, Lewis & Bockius
LLP acted as legal counsel and UBS Investment Bank acted as
financial advisor to PharmaNet. Latham & Watkins acted as legal
counsel to PharmaNet's Board of Directors. Important Information
about the Tender Offer This press release is neither an offer to
purchase nor a solicitation of an offer to sell securities. The
tender offer is being made pursuant to a Tender Offer Statement on
Schedule TO (including the Offer to Purchase, the related Letter of
Transmittal and other tender offer materials) filed by Parent,
Purchaser and the Sponsors with the SEC on February 12, 2009. In
addition, on February 12, 2009, PharmaNet filed a
Solicitation/Recommendation Statement on Schedule 14D-9 with the
SEC related to the tender offer. The Tender Offer Statement (and
related materials) and the Solicitation/Recommendation Statement
contain important information that should be read carefully before
any decision is made with respect to the tender offer. Those
materials may be obtained at no charge upon request to either
Innisfree M&A Incorporated., the information agent for the
tender offer at (888) 750-5834 (toll free) or to Jefferies &
Company, Inc., the Dealer Manager for the tender offer at (888)
323-3302 (toll free). In addition, all of those materials (and all
other offer documents filed with the SEC) are available at no
charge on the SEC's website at http://www.sec.gov/. Forward-Looking
Statements Certain statements made in this press release are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 (the "Act") and are
subject to a variety of risks and uncertainties. Additionally,
words such as "seek," "intend," "believe," "plan," "estimate,"
"expect," "anticipate" and other similar expressions are
forward-looking statements within the meaning of the Act. Such
forward-looking statements include PharmaNet Development Group,
Inc.'s decision to enter into an agreement to be acquired by JLL,
the ability of PharmaNet Development Group, Inc. and JLL to
complete the transaction contemplated by the definitive agreement,
including the parties' ability to satisfy the conditions set forth
in the merger agreement, and the possibility of any termination of
the definitive agreement. The forward-looking statements contained
in this press release are based on the current expectations of
PharmaNet, and those made at other times will be based on
PharmaNet's expectations when the statements are made. Some or all
of the results anticipated by these forward-looking statements may
not occur. Factors that could cause or contribute to such
differences include, but are not limited to, the expected timetable
for completing the proposed transaction, the risk and uncertainty
in connection with a strategic alternative process, not having
sufficient funds to pay the principal due upon conversion of the
outstanding notes or to repurchase PharmaNet's outstanding notes,
which PharmaNet may be required to do beginning in August 2009, the
impact of the current economic environment, the impact of
PharmaNet's indebtedness on its financial condition or results of
operations and the terms of its outstanding indebtedness limiting
its activities, the impact of the investigation by the Securities
and Exchange Commission, its limited insurance coverage in
connection with the settled securities class action lawsuit,
limited additional coverage for the recently settled derivative
actions and associated future legal fees, the potential liability
related to the recently filed securities class action lawsuit, the
impact of ongoing tax audits, PharmaNet's ability to generate new
client contracts and maintain its existing clients' contracts, its
evaluation of its backlog and the potential cancellation of
contracts, the possibility PharmaNet under-priced its contracts or
overrun cost estimates and the effect on PharmaNet's financial
results by failure to receive approval for change orders and by
delays in documenting change orders, its ability to implement its
business strategy, international economic, political and other
risks that could negatively affect its results of operations or
financial position, changes in outsourcing trends and regulatory
requirements affecting the branded pharmaceutical, biotechnology,
generic drug and medical device industries, the reduction of
expenditures by branded pharmaceutical, biotechnology, generic drug
or medical device companies, actions or inspections by regulatory
authorities and the impact on PharmaNet's clients' decisions to not
award future contracts to PharmaNet or to cancel existing
contracts, the impact of healthcare reform, the fact that one or a
limited number of clients may account for a large percentage of
PharmaNet revenues, the incurrence of significant taxes to
repatriate funds, the fluctuation of PharmaNet operating results
from period to period, PharmaNet assessment of PharmaNet goodwill
valuation, the impact of foreign currency fluctuations, tax law
changes in Canada or in other foreign jurisdictions, investigations
by governmental authorities regarding PharmaNet inter-company
transfer pricing policies or changes to their laws in a manner that
could increase PharmaNet effective tax rate or otherwise harm
PharmaNet business, PharmaNet lack of the resources needed to
compete effectively with larger competitors, PharmaNet ability to
continue to develop new assay methods for PharmaNet analytical
applications, or if PharmaNet current assay methods are incorrect,
PharmaNet ability to compete with other entities offering
bioanalytical laboratory services, PharmaNet potential liability
when conducting clinical trials, PharmaNet handling and disposal of
medical wastes, failure to comply with applicable governmental
regulations, the loss of services of PharmaNet key personnel and
its ability to attract qualified staff, the continued effectiveness
and availability of PharmaNet's information technology
infrastructure, losses related to its self-insurance of its
employees' healthcare costs in the United States, PharmaNet's
ability to attract suitable investigators and volunteers for its
clinical trials, the material weaknesses relating to PharmaNet's
internal controls, and risks and uncertainties associated with
discontinued operations. Further information can be found in
PharmaNet's risk factors contained in its Annual Report on Form
10-K for the year ended December 31, 2007 and most recent filings.
PharmaNet does not undertake to update the disclosures made herein,
and you are urged to read PharmaNet's filings with the Securities
and Exchange Commission. Contact: Anne-Marie Hess Phone: (609)
951-6842 E-mail: DATASOURCE: PharmaNet Development Group CONTACT:
Anne-Marie Hess of PharmaNet Development Group, +1-609-951-6842,
Web Site: http://www.pharmanet.com/
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