UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 21, 2014

Emergent BioSolutions Inc.

(Exact Name of Registrant as Specified in Charter)

Registrant's telephone number, including area code: (301) 795-1800

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

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On February 21, 2014, Emergent BioSolutions Inc. and its wholly-owned subsidiary, 2396638 Ontario Inc. ("Acquisition Sub"), completed the previously announced acquisition of Cangene Corporation, an Ontario corporation, in accordance with the Arrangement Agreement, dated as of December 11, 2013 (the "Arrangement Agreement"), among Emergent, Acquisition Sub and Cangene. Acquisition Sub paid $222 million in cash, or $3.24 per share (on a fully diluted basis), to acquire all of the outstanding common shares of Cangene. The acquisition was funded, in part, by proceeds from an offering by Emergent of its 2.875% Convertible Senior Notes due 2021 (the "Notes"), which closed on January 29, 2014.

Cangene is a Canadian biopharmaceutical company focused on the development and commercialization of specialty therapeutics, primarily targeting biodefense applications as well as infectious disease, hematology and transplantation.

Additional information and details of the Arrangement Agreement and the Notes, respectively, were previously disclosed in Item 1.01 of Emergent's Form 8-K filed on December 11, 2013 and Item 1.01 of Emergent's Form 8-K filed on January 29, 2014, both of which are incorporated by reference into this Item 2.01.

 The foregoing is a summary description of certain terms of the Arrangement Agreement and does not purport to be complete. It is qualified in its entirety by reference to the full text of the Arrangement Agreement, which was attached as Exhibit 2 to Emergent's Form 8-K filed on December 11, 2013.

The representations and warranties of Emergent, Cangene and Acquisition Sub contained in the Arrangement Agreement were made solely for the benefit of the parties to the Arrangement Agreement. In addition, such representations and warranties (1) were made only for purposes of the Arrangement Agreement, (2) may be subject to limits or exceptions agreed upon by the contracting parties, (3) are subject to materiality qualifications contained in the Arrangement Agreement which may differ from what may be viewed as material by investors, (4) were made only as of the date of the Arrangement Agreement or other specific dates and (5) have been included in the Arrangement Agreement for the purpose of allocating risk between the contracting parties rather than establishing matters as facts. Investors should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of Emergent, Cangene or any of their respective subsidiaries or affiliates. Additionally, the representations, warranties, covenants, conditions and other terms of the Arrangement Agreement were made subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations, warranties and covenants may change after the date of the Arrangement Agreement, which subsequent information may or may not be fully reflected in Emergent's or Cangene's public disclosures.

A copy of the Company's press release, dated February 21, 2014, announcing completion of the acquisition is attached to this report on Form 8-K as Exhibit 99 and is incorporated herein by reference.

 

(a) Financial Statements of Business Acquired

The audited consolidated financial statements of Cangene Corporation, including the consolidated balance sheets as at July 31, 2013 and 2012 and the consolidated statements of income (loss) and comprehensive income (loss), changes in equity and cash flows for the years ended July 31, 2013 and 2012, were included as Exhibit 99.1 to Emergent's Form 8-K filed on January 22, 2014, which is incorporated herein by reference.

The audited consolidated financial statements of Cangene Corporation, including the consolidated balance sheets as at July 31, 2012 and 2011 and the consolidated statements of income (loss) and comprehensive income (loss), changes in equity and cash flows for the years ended July 31, 2012 and 2011, were included as Exhibit 99.2 to Emergent's Form 8-K filed on January 22, 2014, which is incorporated herein by reference.

The unaudited condensed consolidated interim financial statements of Cangene Corporation, including the condensed consolidated interim balance sheets as at October 31, 2013 and July 31, 2013 and the condensed consolidated interim statements of income (loss) and comprehensive income (loss), changes in equity and cash flows for the three months ended October 31, 2013 and 2012, were included as Exhibit 99.3 to Emergent's Form 8-K filed on January 22, 2014, which is incorporated herein by reference.

(b) Pro Forma Financial Information

The unaudited pro forma combined financial statements reflecting the acquisition were included as Exhibit 99.4 to Emergent's Form 8-K filed on January 22, 2014, which is incorporated herein by reference. The unaudited pro forma combined financial statements were prepared prior to the issuance of the Notes. The actual aggregate principal amount of Notes issued in the offering was $250 million, representing $50 million more than the aggregate principal amount of Notes assumed in the pro forma combined financial statements, which results in a $1.4 million increase in pro forma interest expense for the year ended December 31, 2012, a $1.1 million increase in pro forma interest expense for the nine months ended September, 2013, a $0.03 decrease in basic earnings per share for the year ended December 31, 2012, and a $0.02 decrease in basic earnings per share for the nine months ended September 30, 2013.

(d) Exhibits

 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EXHIBT INDEX

 

 

Exhibit 99

EMERGENT BIOSOLUTIONS COMPLETES ACQUISITION OF CANGENE CORPORATION

ROCKVILLE, MD, February 21, 2014—Emergent BioSolutions Inc. (NYSE: EBS) announced today that it has completed its acquisition of Cangene Corporation for $222 million in cash.  After payment by Cangene of transaction related costs, Emergent expects to receive approximately $40 million of cash from Cangene in connection with closing.  The completion of the acquisition follows the successful conclusion of all closing conditions, including approval by the Ontario Superior Court of Justice and a positive vote by Cangene shareholders at a special shareholder meeting held on February 12, 2014.  The transaction is consistent with Emergent's growth plan in that it diversifies the company's revenue mix, adds commercial product sales and contributes to earnings growth.

"The acquisition of Cangene is expected to accelerate our growth by substantially expanding our biodefense product portfolio, by adding marketed therapeutics that are provided to hospitals and specialty clinics through an established commercial infrastructure, and by providing fill/finish manufacturing capabilities that have growing contract revenues," said Daniel J. Abdun-Nabi, president and chief executive officer of Emergent BioSolutions.  "We look forward to fully integrating Cangene into our operations and to building significant value as a combined company for our customers and shareholders."

About Emergent BioSolutions

Safe Harbor Statement

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements, other than statements of historical fact, including statements regarding the potential opportunities and financial impact of the transaction, our financial guidance, and any other statements containing the words "believes", "expects", "anticipates", "intends", "plans", "forecasts", "estimates" and similar expressions, are forward-looking statements. These forward-looking statements are based on our current intentions, beliefs and expectations regarding future events. We cannot guarantee that any forward-looking statement will be accurate. Investors should realize that if underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could differ materially from our expectations. Investors are, therefore, cautioned not to place undue reliance on any forward-looking statement. Any forward-looking statement speaks only as of the date of this press release, and, except as required by law, we do not undertake to update any forward-looking statement to reflect new information, events or circumstances.

There are a number of important factors that could cause the company's actual results to differ materially from those indicated by such forward-looking statements, including our ability to successfully integrate Cangene and realize the potential benefits of the transaction; our ability to successfully integrate the recent acquisition of the HPPD business and realize the benefits of the HPPD transaction; our ability to obtain new BioThrax sales contracts or modifications to existing contracts; our plans to pursue label expansions and improvements for BioThrax; availability of funding for our U.S. government grants and contracts; our ability to identify and acquire or in-license products or late-stage product candidates that satisfy our selection criteria; whether anticipated synergies and benefits from an acquisition or in-license are realized within expected time periods or at all; our ability to enter into selective collaboration arrangements; our ability to expand our manufacturing facilities and capabilities; our ability to meet operating and financial restrictions placed on us and our subsidiaries that are contained in our senior credit facility; the rate and degree of market acceptance and clinical utility of our products; the success of our ongoing and planned development programs; the timing of and our ability to obtain and maintain regulatory approvals for our product candidates; and our commercialization, marketing and manufacturing capabilities and strategy. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from our expectations in any forward-looking statement. Investors should consider this cautionary statement, as well as the risk factors identified in our periodic reports filed with the SEC, when evaluating our forward-looking statements.

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Investor Contact:

Robert G. Burrows

Vice President, Investor Relations

301-795-1877

BurrowsR@ebsi.com

Media Contact:

Tracey Schmitt

Vice President, Corporate Communications

301-795-1800

SchmittT@ebsi.com