Charles River Laboratories International, Inc. (NYSE: CRL) announced
today that it has completed the previously announced acquisition of the
CRO services division of Galapagos NV (Euronext: GLPG), which includes
both Argenta and BioFocus. The acquisition positions Charles River as a
full service, early-stage contract research organization (CRO), with
integrated in vitro and in vivo capabilities from target
discovery through preclinical development.
Argenta and BioFocus are global leaders in integrated drug discovery
services, with a predominant focus on in vitro capabilities.
Located in the United Kingdom and the Netherlands, Argenta and BioFocus
provide a full suite of drug discovery services from target discovery
through the delivery of clinic-ready candidates to a broad range of
pharmaceutical and biotechnology companies. Their deep in vitro expertise
includes medicinal chemistry, target discovery, and complex in vitro
biology, as well as therapeutic area expertise in respiratory,
inflammation, oncology, and CNS diseases.
The purchase price was €129 million in cash, subject to certain
post-closing working capital adjustments. In addition to the initial
purchase price, the transaction includes future performance payments of
up to €5 million. The acquisition is expected to add approximately 6% to
Charles River’s net sales in 2014. It is also expected to be accretive
to non-GAAP earnings per share in 2014 by approximately $0.10. Items
excluded from non-GAAP earnings per share are expected to include all
deal-related costs including amortization of intangible assets.
Use of Non-GAAP Financial Measures
This press release contains non-GAAP financial measures, such as
non-GAAP earnings per diluted share, which exclude the amortization of
intangible assets and other charges related to our acquisitions and
expenses associated with evaluating acquisitions. We exclude these items
from the non-GAAP financial measures because they are outside our normal
operations. This press release also refers to our sales in both a GAAP
and non-GAAP (constant currency) basis. There are limitations in using
non-GAAP financial measures, as they are not prepared in accordance with
generally accepted accounting principles, and may be different than
non-GAAP financial measures used by other companies. In particular, we
believe that the inclusion of supplementary non-GAAP financial measures
in this press release helps investors to gain a meaningful understanding
of our core operating results and future prospects without the effect of
these often-one-time charges, and is consistent with how management
measures and forecasts the Company's performance, especially when
comparing such results to prior periods or forecasts. We believe that
the financial impact of our acquisitions (and in certain cases, the
evaluation of such acquisitions, whether or not ultimately consummated)
is often large relative to our overall financial performance, which can
adversely affect the comparability of our results on a period-to-period
basis. In addition, certain activities, such as business acquisitions,
happen infrequently and the underlying costs associated with such
activities do not recur on a regular basis. Presenting sales on a
constant currency basis allows investors to measure our sales growth
exclusive of foreign currency exchange fluctuations more clearly.
Non-GAAP results also allow investors to compare the Company’s
operations against the financial results of other companies in the
industry who similarly provide non-GAAP results. The non-GAAP financial
measures included in this press release are not meant to be considered
superior to or a substitute for results of operations prepared in
accordance with GAAP. The Company intends to continue to assess the
potential value of reporting non-GAAP results consistent with applicable
rules and regulations. Reconciliations of the non-GAAP financial
measures used in this press release to the most directly comparable GAAP
financial measures are set forth in this press release, and can also be
found on the Company’s website at ir.criver.com.
Caution Concerning Forward-Looking Statements
This news release includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may be identified by the use of words such as “anticipate,”
“believe,” “expect,” “will,” “may,” “estimate,” “plan,” “outlook,” and
“project” and other similar expressions that predict or indicate future
events or trends or that are not statements of historical matters.
Forward-looking statements include statements in this press release
regarding the acquisition of Argenta and BioFocus, and Charles River’s
expectations with respect to the impact of Argenta and BioFocus on the
Company, its service offerings, net sales, sales growth rates and
earnings; Charles River’s projected future performance including sales
and earnings per share; as well as Charles River’s future growth in the
area of discovery services. Forward-looking statements are based on
Charles River’s current expectations and beliefs, and involve a number
of risks and uncertainties that are difficult to predict and that could
cause actual results to differ materially from those stated or implied
by the forward-looking statements. Those risks and uncertainties
include, but are not limited to, the ability to successfully complete
the acquisition of Argenta and BioFocus. A further description of these
risks, uncertainties, and other matters can be found in the Risk Factors
detailed in Charles River's Annual Report on Form 10-K as filed on
February 25, 2014, as well as other filings we make with the Securities
and Exchange Commission. Because forward-looking statements involve
risks and uncertainties, actual results and events may differ materially
from results and events currently expected by Charles River, and Charles
River assumes no obligation and expressly disclaims any duty to update
information contained in this news release except as required by law.
About Charles River
Accelerating Drug Development. Exactly. Charles River provides essential
products and services to help pharmaceutical and biotechnology
companies, government agencies and leading academic institutions around
the globe accelerate their research and drug development efforts. Our
dedicated employees are focused on providing clients with exactly what
they need to improve and expedite the discovery, early-stage development
and safe manufacture of new therapies for the patients who need them. To
learn more about our unique portfolio and breadth of services, visit www.criver.com.
Copyright Business Wire 2014