MDS Announces Agreements to Divest MDS Pharma Services' Early Stage Business
Company Focused on Building MDS Nordion
Upon the close of the sale, MDS will have completed its repositioning strategy and will be focused on building its MDS Nordion business, which has leadership positions in medical imaging and radiotherapeutics, and sterilization technologies.
"The agreements to divest the MDS Pharma Services business are the last major milestone in the repositioning of the Company," said
Under the terms of the agreements, MDS will divest its Discovery and Pre-Clinical operations in Bothell, Washington;
"We are evolving to meet the needs of our clients. This expansion, combined with our existing infrastructure, puts us on the forefront of providing comprehensive discovery and preclinical services from Intellectual Property to Investigational New Drugs to the biopharmaceutical industry," said
The Early Stage Development operations, which consist of Phase I clinics and bioanalytical labs, and the Company's Development and Regulatory Services consultancy, will be sold to a new corporation primarily owned by Bain Capital Ventures and SV Life Sciences, two leading private investment firms with established holdings in life sciences, including Ricerca. Bain Capital Ventures and SV Life Sciences both have long and successful track records of building market-leading companies in healthcare and the life sciences sector.
"We believe that the new corporation's combination of talented people, scientific excellence, and world-class facilities provides a strong foundation for future growth of the business, and we look forward to continuing to provide our clients with leading early-stage clinical development services," said
Exclusions from the Transactions
The divestiture of the MDS Pharma Services Early Stage business does not include the Early Stage Development facility in
Operating costs during the wind-down period are currently anticipated to be in the range of
Following the sale, MDS expects to retain certain liabilities and obligations related to the MDS Pharma Services Early Stage business, including litigation claims and other costs associated with the U.S. Food and Drug Administration's review of the Company's bioanalytical operations in
Cash and Distributions
Following the divestiture of the MDS Pharma Services Early Stage business and the intended
MDS's interest in the new corporation consists solely of the
Closing Conditions, Time Lines
The transaction is expected to close within two months, and is subject to customary approvals and closing conditions, including certain regulatory approvals and compliance with labor laws related to an operation in
MDS Special Committee
The Company's Special Committee of the Board of Directors, which was established in
MDS Strategic Repositioning
Background materials pertaining to the new strategic direction for MDS Inc. can be found on MDS Inc.'s Website at http://www.mdsinc.com/strategic_repositioning_of_mds/index.asp.
About MDS Pharma Services Early Stage Operations
MDS Pharma Services' Early Stage operations include approximately 1,700 employees at 10 sites -
MDS Inc. (TSX: MDS; NYSE: MDZ) is a global life sciences company that provides market-leading products and services that customers need for the development of drugs and the diagnosis and treatment of disease. MDS Inc. is a leading global provider of innovative technologies for use in medical imaging and radiotherapeutics, sterilization, and pharmaceutical contract research. MDS has more than 2,400 highly skilled people in nine countries. Find out more at www.mdsinc.com or by calling 1-888-MDS-7222, 24 hours a day.
Caution Concerning Forward-Looking Statements
This document contains forward-looking statements. Some forward-looking statements may be identified by words like "believes", "estimates", "projects", "expects", "anticipates", "plans", "intends", "indicates" or similar expressions. The statements are not a guarantee of future results and are inherently subject to risks and uncertainties. MDS's actual results could differ materially from those expressed in the forward-looking statements due to these risks and a number of other factors, including, but not limited to, successful completion of the aforementioned divestitures and their success as ongoing businesses, risks relating to obligations retained and projected adjustments, successful implementation of structural changes, including restructuring plans and acquisitions, technical or manufacturing or distribution issues, the competitive environment for MDS's products and services, the degree of market penetration of its products and services, the ability to secure a reliable supply of raw materials, the impact of our clients' exercising rights to delay or cancel certain contracts, the strength of the global economy, the stability of global equity markets, the availability and cost of financing, the impact of the movement of the U.S. dollar relative to other currencies, particularly the Canadian dollar and the euro, uncertainties associated with critical accounting assumptions and estimates, and other factors set forth in reports and other documents filed by MDS with Canadian and U.S. securities regulatory authorities from time to time, including MDS's quarterly and annual MD&A, Annual Information Form, and Annual Report on Form 40-F for the fiscal year ended