Cambrex acquires 51% equity stake in Zenara for $20M

Nov 3 2010

Cambrex Corporation (NYSE: CBM) announced today that it acquired a 51% stake in Zenara Pharma, a Hyderabad, India based pharmaceutical company focused on the formulation of final dosage form products.

Highlights

• To be named Cambrex Zenara
• Positions Cambrex as one of the leading global suppliers to the large and growing Nicotine Replacement Therapy ("NRT") market providing both active pharmaceutical ingredients ("APIs") and finished dosage form products
• Creates the opportunity to integrate Cambrex's API and drug delivery capabilities with Zenara's broad range of formulation and finished dosage form capabilities
• Provides a development and manufacturing platform for Cambrex within the increasingly important and growing Indian pharmaceutical market and creates the ability to develop and manufacture cost effective products for high growth emerging markets
• Adds an experienced and talented management team across all aspects of the pharmaceutical industry, including the development, formulation and production of finished dosage form products

Steve Klosk, the President and CEO of Cambrex commented, "This transaction represents another significant step in Cambrex's strategic objective of enhancing our technology portfolio and providing high value products to the pharmaceutical industry.  We are excited to partner with Zenara and believe the combination of capabilities and technologies will make us a global leader in providing products for the approximately $1.5 billion NRT market. The integration of Cambrex's API and drug delivery business with Zenara's formulation and finished dosage experience enables Cambrex to provide greater benefit to our pharmaceutical customers.  We commend the team at Zenara for building a strong company and we look forward to working with them to rapidly grow the business."

Ashok Narasimhan, the President of Cambrex Zenara added, "Cambrex, with its leading position in western markets for the development and manufacture of APIs, and its history of supplying products to the NRT market, is a natural partner for Zenara.  Our technology and cost position enable us to supply cost effective products to our customers in both developed and higher growth emerging markets.  We are currently supporting our customer's launch of NRT gums and lozenges in India, with roll-outs in several other high potential markets to follow in 2011 and beyond.  We look forward to working with Cambrex to accelerate our market penetration and expand access for both companies to new product categories, geographies and customers."

Cambrex acquired a 51% equity stake in Zenara for $20 million, which may be adjusted based on closing date working capital balances.  Pursuant to the stock purchase agreement, Cambrex will acquire the remaining 49% in early 2016 at a value based on a weighted combination of a multiple of 2015 earnings before interest, taxes, depreciation and amortization ("EBITDA") and cumulative EBITDA for the years 2011 through 2015.

The Company does not expect the impact of its ownership stake in Zenara to be material to Cambrex's income statement for 2010.  Transaction costs will be recorded in the third and fourth quarters.

Please see the Company's SEC filings for a more complete description of this transaction, Cambrex's business and historical performance.