UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. |
On February 3, 2020, Catalent, Inc. (“Catalent” and, together with its subsidiaries, the “Company”) issued an earnings release setting forth the Company’s second quarter ended December 31, 2019 financial results. The earnings release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
As provided in General Instruction B.2 of Form 8-K, Exhibit 99.1 and the information contained in this Item 2.02 of this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall they be deemed to be incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such a filing.
| Item 7.01 | Regulation FD Disclosure. |
On February 3, 2020, Catalent issued a press release announcing the MaSTherCell Acquisition (as defined in Item 8.01 below). A copy of the press release is furnished as Exhibit 99.2 hereto and is hereby incorporated by reference into this Item 7.01.
As provided in General Instruction B.2 of Form 8-K, Exhibit 99.2 and the information contained in this Item 7.01 of this Form 8-K shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, nor shall they be deemed to be incorporated by reference in any filing under the Exchange Act or the Securities Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 8.01 Other | Events. |
On February 2, 2020, Catalent Pharma Solutions, Inc. (“CPS”), a subsidiary of Catalent, entered into a Stock Purchase Agreement (the “Acquisition Agreement”) with Orgenesis Inc. and GPP-II Masthercell, LLC (collectively, the “Sellers”). Pursuant to the terms and conditions of the Acquisition Agreement, at the closing, CPS will acquire (the “MaSTherCell Acquisition”) 100% of the outstanding equity interests of Masthercell Global Inc. (“MaSTherCell”) for an aggregate nominal purchase price of $315.0 million, subject to customary adjustments. The MaSTherCell Acquisition is expected to close in the third quarter of Catalent’s fiscal 2020, subject to customary closing conditions. The Acquisition Agreement contains customary representations, warranties, and covenants by the parties.
The foregoing description of the Acquisition Agreement does not purport to be complete and is qualified in its entirety by reference to the Acquisition Agreement, which is filed as Exhibit 2.1 to this Current Report on Form 8-K and which is incorporated herein by reference. The Acquisition Agreement has been filed to provide information to investors regarding its terms. It is not intended to provide any other factual information about the Company or MaSTherCell, their respective businesses, or the actual conduct of their respective businesses during the period prior to the consummation of the MaSTherCell Acquisition, or the other transactions contemplated by the Acquisition Agreement. The Acquisition Agreement and this summary should not be relied upon as disclosure about the Company or MaSTherCell. No third parties should rely on the representations, warranties, and covenants or any descriptions thereof as characterizations of the actual state of facts or conditions of the Company, MaSTherCell or any of their respective subsidiaries or affiliates. The Acquisition Agreement contains representations and warranties that are the product of negotiations among the parties thereto and that the parties made to, and solely for the benefit of, each other as of specified dates. The assertions embodied in those representations and warranties are subject to qualifications and limitations agreed to by the respective parties and are also qualified in important part by confidential disclosure schedules delivered in connection with the Acquisition Agreement. The representations and warranties may have been made for the purpose of allocating contractual risk between the parties to the agreements instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors.
Other than with respect to the Acquisition Agreement, there is no material relationship between the Company or its affiliates and MaSTherCell.
Contemporaneous with the entry into the Acquisition Agreement, CPS also entered into a debt commitment letter (the “Commitment Letter”), with JPMorgan Chase Bank, N.A. (the “Commitment Party”), pursuant to which, subject to the terms and conditions set forth therein, the Commitment Party has agreed to provide incremental term loan commitments under the Company’s existing senior secured credit facilities of up to $200.0 million in the
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aggregate for the purposes of funding a portion of the consideration to be paid (or to reimburse revolving borrowings made by the Company under its senior secured credit facilities for payments made) pursuant to the Acquisition Agreement and related fees, costs, and expenses, or for growth capital expenditures (the “Incremental Commitment”).
The Incremental Commitment will be reduced on a dollar-for-dollar basis by the gross proceeds the Company receives on or after the date of the Commitment Letter and on or prior to the funding of the Incremental Commitment or the termination thereof of any debt securities, incremental commitments under the Company’s senior secured credit facilities, or issuance of any equity securities by Catalent. Although the Company does not currently expect to make any borrowings under the Incremental Commitment, there can be no assurance that such borrowings will not be made. In that regard, the Company may be required to borrow under the Incremental Commitment if it does not generate sufficient gross proceeds from any potential future financing transactions to finance, together with cash on hand, the Acquisition and related costs, fees, and expenses or for the Company’s anticipated growth capital expenditures. The Incremental Commitment will expire on the earlier of (i) the date of funding the Incremental Commitment and (ii) April 2, 2020.
The funding of the Incremental Commitment is contingent on the satisfaction of certain customary conditions set forth in the Commitment Letter, including, without limitation, (i) the execution and delivery of definitive documentation with respect to the Incremental Commitment in accordance with the terms set forth in the Commitment Letter and (ii) the consummation of the MaSTherCell Acquisition in accordance with the Acquisition Agreement.
This Current Report on Form 8-K does not constitute an offer to sell, or a solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful.
Cautionary Note Concerning Forward-Looking Statements
This Current Report on Form 8-K and the exhibits attached hereto contain both historical and forward-looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, including statements regarding the expected consummation of the acquisition of MaSTherCell and the Incremental Commitment. These forward-looking statements generally can be identified because they relate to the topics set forth above or by the use of statements that include phrases such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “plan,” “project,” “foresee,” “likely,” “may,” “will,” “would” or other words or phrases with similar meanings. Similarly, statements that describe the Company’s objectives, plans or goals are, or may be, forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from the Company’s expectations and projections. Some of the factors that could cause actual results to differ include, but are not limited to, the following: participation in a highly competitive market and increased competition may adversely affect the Company’s business; demand for the Company’s offerings which depends in part on its customers’ research and development and the clinical and market success of their products; product and other liability risks that could adversely affect the Company’s results of operations, financial condition, liquidity, and cash flows; failure to comply with existing and future regulatory requirements; failure to provide quality offerings to customers could have an adverse effect on the business and subject it to regulatory actions and costly litigation; problems providing the highly exacting and complex services or support required; global economic, political, and regulatory risks to the Company’s operations; inability to enhance existing or introduce new technology or service offerings in a timely manner; inadequate patents, copyrights, trademarks, and other forms of intellectual property protections; fluctuations in the costs, availability, and suitability of the components of the products the Company manufactures, including active pharmaceutical ingredients, excipients, purchased components, and raw materials; changes in market access or healthcare reimbursement in the United States or internationally; fluctuations in the exchange rate of the U.S. dollar against other currencies; adverse tax legislative or regulatory initiatives or challenges or adjustments to the Company’s tax positions; loss of key personnel; risks generally associated with information systems; inability to complete any future acquisitions, including the pending MaSTherCell Acquisition, and other transactions that may complement or expand the business of the Company or divestment of non-strategic businesses or assets and difficulties in successfully integrating acquired businesses and realizing anticipated benefits of such acquisitions; risks associated with timely and successfully completing, and correctly anticipating the future demand predicted for, capital expansion projects at the Company’s existing facilities; offerings and customers’ products that may infringe on the intellectual property rights of third parties; environmental, health, and safety laws and regulations, which could increase costs and restrict operations; labor and employment laws and regulations or labor difficulties, which could increase costs or result in
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operational disruptions; additional cash contributions required to fund the Company’s existing pension plans; substantial leverage resulting in the limited ability of the Company to raise additional capital to fund operations and react to changes in the economy or in the industry; exposure to interest rate risk to the extent of the Company’s variable rate debt and preventing the Company from meeting its obligations under its indebtedness. For a more detailed discussion of these and other factors, see the information under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2019, filed August 27, 2019 with the Securities and Exchange Commission. All forward-looking statements speak only as of the date of this Current Report on Form 8-K or as of the date they are made, and the Company does not undertake to update any forward-looking statement as a result of new information or future events or developments except to the extent required by law.
| Item 9.01 | Financial Statements and Exhibits. |
| d. | Exhibits. The following exhibits are included as part of this Current Report on Form 8-K. |
| Exhibit |
Description | |||
| 2.1* |
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| 99.1 |
Earnings release, dated February 3, 2020, issued by Catalent, Inc. | |||
| 99.2 |
Press release, dated February 3, 2020, issued by Catalent, Inc. | |||
| 104 |
Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document). | |||
| * | Exhibits and schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted exhibits and schedules upon request by the SEC. A list identifying the contents of all omitted exhibits and schedules can be found in Exhibit 2.1. |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Catalent, Inc. | ||
| (Registrant) | ||
| By: |
/s/ STEVEN L. FASMAN | |
| Steven L. Fasman | ||
| Senior Vice President, General Counsel, and Secretary |
Date: February 3, 2020
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