8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 20, 2018

CAMBREX CORPORATION

(Exact name of Registrant as specified in its charter)

DELAWARE	1-10638	22-2476135
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)
ONE MEADOWLANDS PLAZA, EAST RUTHERFORD, NEW JERSEY		07073
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (201) 804-3000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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.  ☐

CAMBREX CORPORATION

Form 8-K

Current Report

Item 1.01. Entry into a Material Definitive Agreement.

On July 20, 2018, Cambrex Corporation (the “Company”) entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Halo Pharmaceutical, Inc., a Delaware corporation (“Halo US”), 8121117 Canada Inc., a corporation organized under the laws of Canada (also known as Halo Pharmaceutical Canada Holdings, Inc. (or “Halo 812”)), Halo Pharmaceutical Canada Inc., a corporation organized under the laws of Canada (“Halo Canada” and together with Halo US, Halo 812 and their respective Subsidiaries, the “Acquired Companies”), the holders of all the outstanding securities of the Acquired Companies (collectively, the “Sellers”), SK Capital Partners, L.P., a Delaware limited partnership, as representative of the Sellers and SK Angel Holdings, L.P., a Cayman Islands exempted limited partnership, as guarantor of the Sellers, pursuant to which the Company will acquire all of the outstanding securities of the Acquired Companies.

Pursuant to the Purchase and Sale Agreement, at the closing of the transaction, the Company has agreed to pay to the Sellers an aggregate purchase price equal to U.S. $425 million payable in cash, subject to certain adjustments as set forth in the Purchase and Sale Agreement. The Purchase and Sale Agreement contains customary representations, warranties, covenants and indemnities. The closing of the transaction is subject to customary closing conditions.

The foregoing description of the Purchase and Sale Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase and Sale Agreement, a copy of which the Company expects to file as an exhibit to its next Quarterly Report on Form 10-Q.

Item 7.01 Regulation FD Disclosure.

On July 23, 2018 the Company will be holding a conference call to discuss the transaction. A copy of the Company’s presentation is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 hereto) is being “furnished” and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of Section 18, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except as shall be expressly set forth by specific reference in such filing. The information included in this Current Report on Form 8-K under this Item 7.01 (including Exhibit 99.1 hereto) will not be deemed an admission as to the materiality of any information.

Item 9.01 - Financial Statements and Exhibits

(d) Exhibits

99.1    Presentation dated July 23, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf by the undersigned hereunto duly authorized.

	CAMBREX CORPORATION
Date: July 23, 2018	By:	/s/ Samantha Hanley
	Name:	Samantha Hanley
	Title:	Vice President & General Counsel

EX-99.1

Cambrex to Acquire Halo Pharma July 23, 2018 Exhibit 99.1

Forward-Looking Statements Statements in this presentation regarding the acquisition of Halo Pharma (“Halo”) and expected benefits therefrom (including revenue and earnings expectations), future financial and operating results, outlook, growth, prospects, business strategies, future market position, future operating environment and goals of Cambrex Corporation (the “Company”), including statements of expectation with respect to consolidated or product category sales, EBITDA or Adjusted EBITDA, depreciation and amortization, capital expenditures, and the type of acquisitions, divestitures, collaborations, or other expansion opportunities the Company may consider, as well as any other statements that are not related to present facts or current conditions or that are not purely historical, constitute “forward-looking statements.” These forward-looking statements are based on the Company's historical performance and its plans, estimates and expectations as of the date of this presentation. The words “anticipates,” “estimates,” “believes,” “expects,” “may,” “plans,” “will” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements are not guarantees that the future results, plans, intentions or expectations expressed or implied by the Company will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different than those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: the possibility that conditions to closing the transaction could not be met or that the benefits from the acquisition may not be as anticipated, customer and product concentration, the Company’s ability to renew to win new customer contracts and renew existing contracts on favorable terms, pharmaceutical outsourcing trends, competitive pricing or product developments, government legislation and regulations (particularly environmental issues), tax rates, interest rates, technology, manufacturing and legal issues, including the outcome of outstanding litigation, changes in foreign exchange rates, uncollectible receivables, the timing of orders, loss on disposition of assets, cancellation or delays in renewal of contracts, lack of suitable raw materials or packaging materials, the Company’s ability to receive regulatory approvals for its products and continued demand in the U.S. for late stage clinical products or the successful outcome of the Company’s investment in new products; and the other factors set forth in Part I, “Item 1A. Risk Factors” in the Company's most recent Annual Report on Form 10-K, as may be amended or updated in the Company's Quarterly Reports on Form 10-Q or subsequent filings with the SEC. Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after date of this presentation, even if its estimates change, and statements contained herein are not to be relied upon as representing the Company's views as of any date subsequent to the date of this presentation.

Transaction Overview $425 million total cash consideration To be funded with balance sheet cash and borrowings on $500 million senior credit facility Halo had Revenue and Adjusted EBITDA of $105 million* and $27 million, respectively for the 12 months ended 06/30/18 Enhances top-line revenue growth Accretive to adjusted EPS in 2019 Anticipate pro forma total net leverage at closing of 1.2x Expected to close in Q3 2018, subject to regulatory approvals and customary closing conditions Revised 2018 guidance to be provided post-closing in conjunction with Q3 2018 earnings release in early November Timing Consideration Financial Impact * Halo revenue is reported under ASC 605

Halo Pharma Overview Broad dosage form manufacturing capabilities Oral solids, liquids and sterile ointments and gels Specialty offerings include modified release, pediatric dosage forms and oral dissolving tablets, among others Focus on complex dosage forms Differentiated drug delivery, controlled substance and complex formulation competencies Integrated product development and manufacturing Product development business feeds clinical and long-cycle commercial manufacturing Diversified customer base with sticky products Includes large, specialty and generic pharma customers Sole source supplier for > 80% of commercial customers Efficient, 2 facility North American manufacturing network Whippany, NJ (167,000ft2) and Mirabel, Québec (234,000ft2) Strong regulatory history and capacity to fuel expansion Key Stats 400+ approved SKUs 100+ active PD projects 70+ active customers 2 state of the art facilities ~450 employees Leading dosage form custom development and manufacturing organization (CDMO) providing Product Development (PD) and Commercial Manufacturing services to the innovator and generic pharmaceutical markets

Strategic Rationale Expands addressable market and creates new avenue for growth within the large, fragmented and growing market for outsourced finished dosage form contract development and manufacturing Diversifies business, expands customer base and broadens molecule funnel Extends capabilities through addition of finished dose development and manufacturing and provides a platform for adding new dosage forms in the future Complements existing innovator, generic and controlled substance offerings Adds efficient North American network with existing capacity for mid-term growth and room for longer-term expansions Opportunity to expand generic drug product initiative Accretive transaction that accelerates growth Creates leading small molecule CDMO with broad range of capabilities

Provides Entry into the Finished Dose CDMO Market Cambrex will participate in 2 large and growing markets with increasing outsourcing penetration Finished Dosage Form [2] Small Molecule API [1] CDMO Small Molecule API Total Market Size $50-60B CDMO Finished Dosage Form Total Market Size $55-60B 50-60% Outsourced CDMO Market Size $25-35B Annual Growth 5-8% CDMO Market Size $15-20B Annual Growth 5-7% [1] Source: Cambrex estimates, William Blair Equity Research, PharmSource [2] Source: Cambrex estimates, PharmSource 30-35% Outsourced

Creates Leading Small Molecule CDMO with End-to-End Capabilities Drug Development Commercialization Clinical Phase I Clinical Phase II Clinical Phase III Launch Phase IV Generics Preclinical Development File IND File NDA Cambrex (High Point, NC, US) Cambrex (Charles City, IA, US) Cambrex (Karlskoga, Sweden) Cambrex (Milan, Italy) API FDF a a a a Halo Pharma (Whippany, NJ, US) Halo Pharma (Mirabel, Québec, Canada) a a

Efficient Finished Dose Manufacturing Network 167,000 ft2 (21 Acres) Controlled substance manufacturing (DEA Schedule I-V) Large vault capacity for additional narcotics storage Capabilities include analytical method development, formulation, transfers, release, microbiologic testing, manufacturing and packaging Production Capacities: Solid Dose: 3 Billion Units Liquid:500,000 Liters Suppository:5 Million Units Sterile Ointments:200,000 KG Bulk Powder:1,500 KG 234,000 ft2 (23 Acres) Controlled substance manufacturing (DEA Schedule I-V) Capabilities include analytical method development, formulation, transfers, release, microbiologic testing, manufacturing and packaging Production Capacities: Solid Dose:2 Billion Units Liquid:12 Million Liters Suppository:100 Million Units Semi Solids:325,000 KG Whippany, New Jersey, USA Mirabel, Canada Capacity for growth and room for long term expansions

Accelerates Growth Halo acquisition provides immediate growth with long-term upside Revised guidance for 2018 will be provided post-closing in our Q3 Earnings Call Expected to be accretive to adjusted EPS in 2019 Adjusted EBITDA is a non-GAAP financial measure. The reconciliation to the most directly comparable GAAP financial measure can be found in a table at the end of the earnings press release for each of the above historical years. 40 60 80 100 120 140 160 180 200 220 240 260 280 300 240 265 290 315 340 365 390 415 440 465 490 515 540 565 590 615 640 665 2012A 2013A 2014A 2015A 2016A 2017A 2018P Net Revenue PF w/ Halo Rev Adjusted EBITDA PF w/ Halo EBITDA

Extends customer offering beyond APIs and forward integrates business into new revenue streams in large, growing finished dosage form outsourcing market Provides high quality, complex finished dose manufacturing platform Diversifies business and enhances customer base and product and service offering Opportunities for cross selling of product and services Financially compelling transaction Summary Creates leading small molecule CDMO with end-to-end capabilities

Cambrex to Acquire Halo Pharmaceutical July 23, 2018