WuXi PharmaTech's China-Based Small-Molecule Manufacturing Subsidiary, STA, Enters into Private Placement Agreement
WuXi PharmaTech has announced that SynTheAll Pharmaceutical (STA), WuXi's small-molecule manufacturing subsidiary, has entered into an agreement in connection with a planned private placement of 7,160,000 common shares of STA stock, representing approximately 6% of STA's current shares outstanding, for RMB 498,694,000 in cash, or approximately $80 million at current exchange rates. Purchasers in the private placement (comprised of 33 institutional investors in China) have agreed to a lock-up period of 12 months, the same as for STA and WuXi management who purchased shares. None of the investors purchasing STA stock in the private placement are affiliated with WuXi. After giving effect to the private placement, WuXi will own 89.1% of STA's shares outstanding. The closing of the private placement is subject to customary conditions and is expected to close by the end of July 2015. In April 2015, STA completed the listing of its shares on the New Third Board, the over-the-counter stock exchange in China.
STA provides process chemistry services and manufactures small-molecule advanced intermediates and APIs for customer use in preclinical and clinical trials and for marketed small-molecule drugs. Its operations are located in the Waigaoqiao Free Trade Zone and Jinshan, both in Shanghai, and in Changzhou. STA does not include WuXi's biologics manufacturing business. STA's business is significantly more capital intensive than WuXi's laboratory services business and is in the process of building new facilities in Changzhou to substantially increase its production capacity. The proceeds of this new private placement will fund this capacity expansion and other investments necessary to support STA's future growth.
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