NUCRYST Announces Agreement to Sell Acticoat Business and Proposes Amalgamation with Westaim
11 November 2009 - 11:15AM
PR Newswire (US)
PRINCETON, NJ, Nov. 10 /PRNewswire-FirstCall/ -- NUCRYST
Pharmaceuticals Corp. announced today the execution of a definitive
agreement (the "S&N Agreement") with subsidiaries of Smith
& Nephew plc. (LSE:SN)(NYSE:SNN) for the sale to Smith &
Nephew of substantially all of Nucryst's operations and assets
including all rights to its proprietary nanocrystalline silver
technology for cash consideration of US$21 million plus the value
of working capital and subject to certain adjustments (the "Sale
Transaction"). The closing of the Sale Transaction is subject to
customary conditions including the approval of Nucryst
shareholders. Nucryst also entered into an amalgamation agreement
with The Westaim Corporation, which currently owns approximately
75% of Nucryst's outstanding common shares. Under the amalgamation
agreement, Nucryst will amalgamate with a newly formed subsidiary
of Westaim to form Amalco (the "Amalgamation") and Nucryst
shareholders other than Westaim will receive one redeemable
preferred share in the capital of Amalco, which share will be
redeemed for US$1.77 in cash upon the completion of the
Amalgamation. Completion of the Amalgamation is subject to certain
conditions including closing of the Sale Transaction and the
approval of Nucryst shareholders. Following the completion of the
Amalgamation, Nucryst intends to delist from the TSX and NASDAQ
stock exchanges. The board of directors of Nucryst engaged KPMG
Corporate Finance Inc. to provide a fairness opinion regarding the
Sale Transaction and an independent valuation of Nucryst for the
purpose of the Amalgamation, in accordance with Multilateral
Instrument 61-101. Specifically, KPMG Corporate Finance Inc. has
opined that the consideration offered in the S&N Agreement is
fair, from a financial point of view, to Nucryst. In addition, the
valuation prepared by KPMG Corporate Finance Inc. provides a
valuation range of $1.72 to $1.82 per common share, subject to
certain assumptions. Particulars of the fairness opinion and the
valuation will be provided to shareholders with the materials
mailed to shareholders in connection with the meeting to approve
the Sale Transaction and the Amalgamation. The board of directors
of Nucryst unanimously determined that the Sale Transaction is in
the best interests of Nucryst and is fair, from a financial point
of view, to Nucryst and that the value proposed to the minority
shareholders of Nucryst under the amalgamation agreement is fair,
from a financial point of view, to the common shareholders of
Nucryst (other than Westaim). In light of these conclusions, the
Nucryst board of directors unanimously determined to enter into the
S&N Agreement and the amalgamation agreement and to recommend
that Nucryst shareholders vote in favor of the resolutions
authorizing the Sale Transaction and the Amalgamation. Closing
under the S&N Agreement and completion of the Amalgamation is
conditional upon, among other things, approval of the shareholders
of Nucryst at a special meeting called for such purpose. The Sale
Transaction and the Amalgamation will each separately be proposed
to shareholders for consideration. The Sale Transaction requires
the approval of more than two thirds of the votes cast at the
meeting and Westaim has entered into a support agreement with Smith
& Nephew under which it will vote in favor of the S&N
Agreement, subject to certain limited exceptions applicable where a
financially superior proposal has been made. The Amalgamation
requires both the approval of more than two thirds of the votes
cast at the meeting and, pursuant to Multilateral Instrument
61-101, the approval of a simple majority of shareholders other
than the directors and officers of Westaim. If the Sale Transaction
is approved by shareholders and other conditions to closing are
satisfied, the transaction will proceed, irrespective of whether
the Amalgamation is approved. The S&N Agreement includes a
non-solicitation covenant on the part of Nucryst, subject to a
customary "fiduciary out" provision, the right of Smith &
Nephew to match any financially superior proposal and the payment
of a $1.0 million termination fee by Nucryst to Smith & Nephew
in certain circumstances. Details regarding the S&N Agreement
and the amalgamation agreement will be included in Nucryst's
management information circular which is expected to be mailed to
shareholders in late November, 2009 for a shareholders meeting to
be held in December, 2009. This news release is for information
purposes only and is not a substitute for the definitive agreements
in relation to the proposed transactions. There can be no assurance
that the conditions of closing will be satisfied, or that the
transactions will be completed as proposed or at all. About NUCRYST
Pharmaceuticals Corp. NUCRYST Pharmaceuticals Corp. (NASDAQ: NCST;
TSX: NCS) develops, manufactures and commercializes medical
products that fight infection and inflammation using SILCRYST(TM),
its patented atomically disordered nanocrystalline silver
technology. NUCRYST licensed world-wide rights for SILCRYST(TM)
wound care coating products to Smith & Nephew plc, which
markets these products in over 30 countries under their
Acticoat(TM) trademark. NUCRYST has developed its proprietary
nanocrystalline silver in a powder form, referred to as NPI 32101,
for use in medical devices and as an active pharmaceutical
ingredient. About Smith & Nephew plc. Smith & Nephew is a
global medical technology business, specializing in Orthopaedics,
including Reconstruction, Trauma and Clinical Therapies, Endoscopy
and Advanced Wound Management. Smith & Nephew is a global
leader in arthroscopy and advanced wound management and is one of
the leading global orthopaedics companies. Smith & Nephew is
dedicated to helping improve people's lives. The Company prides
itself on the strength of its relationships with its surgeons and
professional healthcare customers, with whom its name is synonymous
with high standards of performance, innovation and trust. The
Company operates in 32 countries around the world. Annual sales in
2008 were nearly $3.8 billion. SILCRYST(TM) is a trademark of
NUCRYST Pharmaceuticals Corp. Acticoat(TM) is a trademark of Smith
& Nephew plc This news release contains forward-looking
statements within the meaning of securities legislation in the
United States and Canada (collectively "forward-looking
statements"). Forward-looking statements in this news release
include, but are not limited to, statements about the contemplated
transactions described. With respect to the forward-looking
statements contained in this news release, readers are cautioned
that numerous risks, uncertainties and other factors could cause
our actual results to differ materially from those indicated in
these statements including, but not limited to: the failure to
satisfy any of the conditions to closing of the S&N Agreement
or the amalgamation agreement; future shareholder actions with
respect to the proposed transactions; our ability to satisfy
regulatory and stock exchange standards and requirements to
complete the proposed transactions; the uncertainty of our future
operating results, which are likely to fluctuate and could under
certain conditions prevent the completion of the proposed
transactions; our reliance on and ability to maintain our
collaboration with Smith & Nephew should the proposed S&N
Agreement not be completed; our reliance on sales of Acticoat(TM)
products with our SILCRYST(TM) coatings by Smith & Nephew.
Although we have attempted to identify the important risks,
uncertainties and other factors that could cause actual results or
events to differ materially from those expressed or implied in the
forward-looking statements in this release, there may be other
factors that cause actual results or events to differ from those
expressed or implied in forward looking statements. For a more
thorough discussion of the risks associated with our business, see
the "Risk Factors" section in our Annual Report on Form 10-K for
the year ended December 31, 2008 and in our Quarterly Reports on
Form 10-Q for 2009 as filed with the U.S. Securities and Exchange
Commission on EDGAR at http://www.sec.gov/ and with securities
authorities in Canada on SEDAR at http://www.sedar.com/. All
forward-looking statements are expressly qualified in their
entirety by this cautionary statement and NUCRYST disclaims any
intention or obligation to revise or update any forward-looking
statements whether as a result of new information, future
developments or otherwise after the date hereof. DATASOURCE:
NUCRYST Pharmaceuticals Corp. CONTACT: David Wills, Gillian
McArdle, Investor Relations, (416) 504-8464,
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