On December 23, 2004, Patheon Inc., a leading independent provider of pharmaceutical manufacturing and development services, acquired MOVA Pharmaceutical Corp. from a selling group led by majority owner Joaquín Viso. MOVA is a leading US prescription pharmaceutical contract manufacturer located in Puerto Rico. The purchase price was US$350 million, subject to an increase to a maximum of US$441 million based on earn-out arrangements.
Patheon concurrently completed a $223,600,000 offering of common shares (that was supplemented by the exercise of an over-allotment option of $22,360,000 of common shares) and entered into new credit facilities in the amount of US$169 million with Royal Bank of Canada as administrative agent and RBC Capital Markets as lead arranger and sole book runner. Additional financing was also made available by Westernbank Puerto Rico, which increased its existing credit facilities with MOVA to US$123 million. Portions of the purchase price for the acquisition were funded using the new credit facilities, proceeds of the equity offering, and the assumption of existing debt.
Patheon’s legal team was led by Riccardo Trecroce, general counsel, and Gregory Shepherd, associate general counsel, with assistance from legal counsel David Savarie and Alaine Grand. Patheon’s lead external counsel was Davies Ward Phillips & Vineberg LLP in Canada and the US, who was assisted by Fiddler González & Rodríguez in Puerto Rico and Thompson Hine LLP in Ohio. The Davies team included Jay Swartz, Cameron Rusaw and Darren Wasylucha (corporate and securities), Derek Vesey, Sonny Bhalla and Samantha Vaccaro (banking), Patrick Moyer and Donna Aronson (securities), Mark Katz and Julie Soloway (competition), Jeffrey Lem (real estate), and John Ulmer and Elie Roth (tax) in Toronto; and Gerald Shepherd (antitrust, corporate and securities), Valerie Vena and Jennifer Toone (securities) and Peter Glicklich (tax) in New York. The Fiddler team included Arline Bauzá and Pedro Cantero-Frau (corporate) and Roberto Suárez and César Gómez (tax). The Thompson Hine team included Robert Selak, Louis Solimine and Jeffrey Clarke.
The sellers were represented by McConnell Valdés in Puerto Rico. The majority seller, Mr. Viso, was represented by Skaden, Arps, Slate, Meagher & Flom LLP in the US. The McConnell team included Silvestre Miranda, Francisco Ramírez and Maria Christina Mena. The Skadden Arps team included Paul Schnell, Jason Okazaki and Kenneth Koleyni in New York, and Pankaj Sinha in Washington.
The lenders in the Patheon credit facility were represented by Osler, Hoskin & Harcourt LLP in Canada, with a team that included Michael Matheson, Michael Hart, Tim Meadowcroft and Dale Seymour (banking) and Tim Schumacher (real estate); by Jorge Souss and Pedro Morell of Goldman Antonetti & Córdova in Puerto Rico; and Sandra Nunn and Jane Hils Shea of Frost Brown Todd in Ohio.
The lenders in the MOVA credit facility was represented by Ronald Rosenbaum in Puerto Rico and by Jean Anderson of Goodmans LLP in Canada.
The underwriters for the equity offering, led by RBC Dominion Securities Inc., and including CIBC World Markets, Scotia Capital, TD Securities and Paradigm Capital, were represented by Torys LLP in Canada and the US, with a team that included Philip Brown, Philip Mohtadi and Kevin Cohen (securities), Michael Fortier and Dennis Mahony (environmental) and Catrina Card (tax) in Toronto, and Dan Miller (securities), Jeffrey Gracer (environmental) and Gregg Benson (tax) in New York.