Chattem Announces Agreement to Acquire Remaining Worldwide Rights to ACT(R) From Johnson & Johnson
Chattem, Inc. (NASDAQ: CHTT) — a leading marketer and manufacturer of branded consumer products, today announced that it has entered into an agreement to acquire the rights to ACT®, a branded over-the-counter (“OTC”) anti-cavity mouthwash/mouth rinse, in Western Europe together with worldwide trademark rights from Johnson & Johnson for $4.1 million in cash plus certain assumed liabilities. The transaction has received the approval of the European Commission, and subject to certain closing conditions, is expected to close towards the end of May 2007.
Chattem acquired the U.S. rights to ACT from Johnson & Johnson as a part of its acquisition of five OTC brands in a transaction that closed on January 2, 2007.
The rights to ACT in Western Europe are being divested by Johnson & Johnson as a condition to the European Commission’s approval of Johnson & Johnson’s acquisition of Pfizer Consumer Healthcare and certain regulatory requirements in connection with that acquisition in Greece.
To fund the transaction, Chattem will either utilize existing cash or borrow from its existing senior secured revolving credit facility.
“This acquisition will provide Chattem with a strategic vehicle to expand the ACT franchise in international markets,” said Zan Guerry, chairman and chief executive officer. “The U.S. ACT business can serve as a foundation for new product development in the countries where ACT is currently sold which include Switzerland, Greece, Netherlands, Belgium and Luxemburg and for the introduction of ACT in additional markets,” continued Guerry. “Disciplined and strategic international acquisitions are a component of growth for us and this acquisition complements Chattem’s acquisition of ACT in the U.S. and the Selsun international business in 2002.”
About Chattem
Chattem, Inc. is a leading marketer and manufacturer of a broad portfolio of branded OTC healthcare products, toiletries and dietary supplements. The Company’s products target niche market segments and are among the market leaders in their respective categories across food, drug and mass merchandisers. The Company’s portfolio of products includes well-recognized brands such as Icy Hot®, Gold Bond®, Selsun Blue®, ACT®, Cortizone and Unisom®. Chattem conducts a portion of its global business through subsidiaries in the United Kingdom, Ireland and Canada. For more information, please visit the Company’s website: www.chattem.com.
Certain statements and information included in this release constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Chattem to be materially different from any future results, performance or achievements expressed or implied in such forward-looking statements. Additional discussion of factors that could cause actual results to differ materially from management’s projects, estimates and expectations is contained in Chattem’s Annual Report on Form 10-K for the fiscal year ended November 30, 2006 and the other documents Chattem files with the SEC from time to time. Chattem undertakes no duty to update its forward-looking statements, including any such statements regarding the expected economic benefits resulting from the acquisition.