CoreRx, Inc. Completes Acquisition of Societal CDMO, Inc.

Rhea-AI Summary

CoreRx, Inc. completes the acquisition of Societal CDMO, Inc. (Nasdaq: SCTL) in a tender offer at $1.10 per Share. The acquisition results in Societal CDMO becoming a wholly owned subsidiary of CoreRx, leading to delisting from Nasdaq Capital Market.

Market Research Analyst

The completion of the acquisition of Societal CDMO by CoreRx represents a strategic consolidation in the contract development and manufacturing (CDMO) industry, which is characterized by a high degree of competition and a growing demand for outsourcing services by pharmaceutical companies. The acquisition price of $1.10 per share and the substantial tender of approximately 92.8% of Societal CDMO's shares indicate a strong shareholder agreement with the terms of the offer, reflecting confidence in CoreRx's future prospects post-acquisition.

This move could potentially streamline CoreRx's operations, expand its service offerings and increase its market share. With the delisting of Societal CDMO from the Nasdaq Capital Market, there will be implications for current investors, including changes in the liquidity and tradability of their shares. The long-term benefits for CoreRx could include enhanced economies of scale, improved R&D capabilities and a stronger competitive position in the CDMO market.

Financial Analyst

From a financial perspective, the acquisition's impact on CoreRx's balance sheet and earnings will be of particular interest to stakeholders. The tender offer's cash payment for Societal CDMO shares will affect CoreRx's cash reserves and the subsequent integration costs and synergies will influence future financial statements. Investors will monitor how this acquisition affects CoreRx's revenue growth, profit margins and return on investment, especially considering the premium paid per share relative to Societal CDMO's market performance prior to the acquisition.

Additionally, the role of financial and legal advisors, such as Raymond James & Associates and Goodwin Procter LLP for Societal CDMO and the legal advisors for CoreRx, may have had a significant influence on the negotiation process, potentially affecting the deal's structure and financial outcomes. The expertise of these advisors often plays a pivotal role in determining the success of such transactions.

Legal Expert

The completion of the acquisition through a second-step merger under Section 321(f) of the Pennsylvania Business Corporation Law of 1988 is a common legal pathway for consolidating ownership when a tender offer does not result in 100% share acquisition. In this case, the remaining shares of Societal CDMO were acquired through this statutory process, converting Societal CDMO into a wholly owned subsidiary of CoreRx.

The delisting from the Nasdaq Capital Market signifies a transition in the governance and reporting requirements for Societal CDMO. As a subsidiary, Societal CDMO will no longer be subject to the same public company obligations, which could result in reduced administrative overhead but also less transparency for external investors. It's important to note that such legal maneuvers require careful planning to ensure compliance with corporate law and to minimize potential legal risks associated with mergers and acquisitions.

CLEARWATER, Fla.--(BUSINESS WIRE)-- CoreRx, Inc. (“CoreRx”) today announced that it has completed its acquisition of Societal CDMO, Inc. (“Societal CDMO”) (Nasdaq: SCTL), a contract development and manufacturing organization dedicated to solving complex formulation and manufacturing challenges primarily focused on small molecule therapeutics.

The Offer and the Merger

CoreRx’s tender offer to acquire all of the issued and outstanding shares of common stock (the “Shares”) of Societal CDMO, at a purchase price of $1.10 per Share, in cash, without interest and less any applicable tax withholding, expired as scheduled one minute following 11:59 p.m., Eastern Time, on April 5, 2024 and was not further extended. The depositary and paying agent for the tender offer has advised CoreRx that, as of the expiration of the tender offer, a total of 102,588,622 Shares were validly tendered and not properly withdrawn, representing approximately 92.8% of the issued and outstanding Shares. Such Shares have been accepted for payment and will be promptly paid for in accordance with the terms of the tender offer. Following completion of the tender offer, CoreRx completed the acquisition of Societal CDMO through the previously planned second-step merger under Section 321(f) of the Pennsylvania Business Corporation Law of 1988. As a result of the merger, Societal CDMO became a wholly owned subsidiary of CoreRx. The common stock of Societal CDMO will be delisted from the Nasdaq Capital Market.

Advisors

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP and Ropes & Gray LLP served as legal advisors to CoreRx. Raymond James & Associates, Inc. served as financial advisor and Goodwin Procter LLP served as legal advisor to Societal CDMO.

About CoreRx

CoreRx, Inc. is an industry leading CDMO, providing innovative drug formulation, development, and GMP manufacturing to global pharmaceutical and biotech partners. CoreRx operates from two sites: (i) its state-of-the-art campus in Clearwater, Florida and (ii) its Bend Bioscience campus in Bend, Oregon. CoreRx delivers value-added solutions to its partners focused on oral solids, liquids, and topicals, including enhanced formulations utilizing particle engineering-based drug delivery technologies and spray dry dispersion. Learn more at https://www.corerxpharma.com and https://bendbioscience.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240408651990/en/

Ajay Damani (CoreRx)

Chief Executive Officer

(727) 259-6950

Jeremey Milner (Media Inquiries)

BackBay Communications

jeremy.milner@backbaycommunications.com

Source: CoreRx, Inc.

FAQ

What is the acquisition price per Share in the tender offer?

The acquisition price per Share in the tender offer is $1.10.

What percentage of Shares were tendered and accepted for payment?

Approximately 92.8% of the issued and outstanding Shares were tendered and accepted for payment.

What is the legal status of Societal CDMO after the acquisition?

Societal CDMO becomes a wholly owned subsidiary of CoreRx.

Which law governs the second-step merger for the acquisition?

The second-step merger for the acquisition is governed by Section 321(f) of the Pennsylvania Business Law of 1988.

Which firms served as legal advisors to CoreRx in the acquisition?

Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP and Ropes & Gray LLP served as legal advisors to CoreRx.