Solutia agrees to sell pharmaceutical business for $74.5 million

By Caroline Salls

Pittsburgh, May 24 - Solutia Inc. subsidiary Solutia Europe SA/NV has reached a definitive agreement to sell its pharmaceutical services business, comprised of CarboGen AG and Amcis AG, to Dishman Pharmaceuticals & Chemicals Ltd. for $74.5 million, making Dishman the only contract manufacturing organization in India with high potency manufacturing capability.

According to a Solutia news release, under the agreement, Dishman will buy 100% of the stock of CarboGen and Amcis as well as other assets used in the pharmaceutical services business for $74.5 million.

According to a Dishman news release, the purchase price includes $8 million in working capital.

All intellectual property, patents and trademarks, customer contracts, as well as employees of the business, are included in the sale transaction.

Dishman said it will enhance Carbogen-Amcis' business prospects by driving synergies between the two companies as well as expanding the product suite and renewing the focus on key accounts to enhance the scale of operations.

Jointly, Dishman said the businesses can serve the entire drug life cycle of 15 to 20 years, and the company also hopes to leverage its competency in operational efficiency in India to improve margins in the Swiss operation.

Dishman said the acquisition will boost its contract manufacturing business from Carbogen customers.

The transaction is subject to removal of the restrictions related to the sale under Solutia Europe's Euronotes, bankruptcy court approval and government and regulatory approvals, which are expected by Aug. 31.

CarboGen and Amcis had about CHF 80 million in sales in 2005.

Dishman said Carbogen-Amcis has developed a strong, loyal and satisfied customer base among medium-sized pharmaceutical and biopharmaceutical companies and generated about 90% of its 2005 revenue from repeat customers.

Dishman is an Ahmedabad, India-based manufacturer of active pharmaceutical ingredients.

Solutia, a St. Louis-based manufacturer and provider of performance films, specialty chemicals and an integrated family of nylon products, filed for bankruptcy on Dec. 17, 2003 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 03-17949.

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