COLUMBIA, Md., Sept. 23 /PRNewswire-FirstCall/ -- Martek
Biosciences Corporation (Nasdaq: MATK) announced today that it has
entered into an agreement to sell a significant portion of the
assets at its Winchester, Ky.,
manufacturing site to Alltech, an animal health company
headquartered in Nicholasville,
Ky. The assets to be sold include a majority of the land and
buildings at the Winchester site
as well as certain equipment therein, including all of the
production-scale fermentation and recovery equipment. The
transaction does not include the sale of, license of, or granting
of any rights to any of Martek's strains, patents or any other
technologies. It also does not permit the use of the Winchester assets to produce omega-3 and/or
omega-6 polyunsaturated fatty acids for human use for a period of
10 years. The sale is consistent with Martek's previously announced
plans to restructure its Winchester,
Ky., manufacturing facilities in an effort to streamline
operations, improve capacity utilization, and reduce manufacturing
costs and operating expenses. Under the terms of the sale
agreement, Alltech will pay Martek a total of approximately
$14 million over the next four years
for the assets to be acquired. The transaction is expected to close
by November 30, 2010, subject to
customary closing conditions.
Also as previously disclosed, as a result of the Winchester plant restructuring and sale,
Martek will incur both non-cash asset impairment and cash charges.
Based on the terms of the sale, we currently project that non-cash
charges of approximately $28-32
million will be recorded in the fourth quarter of fiscal
year 2010 as well as cash charges of approximately $1 million related to employee separation costs.
Following the sale and restructuring, Martek plans to continue
to maintain a strong presence in Winchester, with approximately 50 skilled
employees focused primarily on lab and pilot scale development,
limited production, and supply-chain management. In addition,
Martek will maintain necessary production redundancies through
continuing access to certain key processes at the Winchester facility and arrangements with
contract manufacturers.
"The restructuring of our manufacturing operations and this
related asset sale is a necessary part of our strategy to
significantly offset price reductions resulting from our infant
formula contract extensions through the implementation of
manufacturing cost savings, product innovation initiatives, and
growing our non-infant formula business. Importantly, Martek will
continue to have access to back-up production facilities, if
needed. This transaction will also enable Martek to maintain a
considerable presence in Winchester where we will carry-out a variety
of critical innovation, development, and other activities," said
Steve Dubin, CEO of Martek
Biosciences Corporation.
About Martek Biosciences Corporation
Martek Biosciences Corporation (NASDAQ: MATK) is a leader in the
innovation, development, production and sales of high-value
products from microbial sources that promote health and wellness
through nutrition. The company's technology platform consists of
its core expertise, broad experience and proprietary technology in
areas such as microbial biology, algal genomics, fermentation and
oil processing. This technology platform has resulted in Martek's
development of a number of products including the company's
flagship product, life'sDHA™ a sustainable and vegetarian
source of algal DHA (docosahexaenoic acid) important for brain,
heart and eye health throughout life for use in infant formula,
pregnancy and nursing products, foods and beverages and dietary
supplements. The company also produces life'sARA™
(arachidonic acid), an omega-6 fatty acid, for use in infant
formula and growing-up milks. Martek's subsidiary, Amerifit Brands,
develops, markets and distributes branded consumer health and
wellness products and holds leading brand positions in all of its
key product categories. Amerifit products are sold in most major
mass, club, drug, grocery and specialty stores and include:
Culturelle®, a leading probiotic supplement; AZO, the leading OTC
brand addressing symptom relief, detection and prevention of
urinary tract infections; and ESTROVEN®, the leading all-natural
nutritional supplement brand addressing the symptoms of menopause.
Martek currently has a number of nutritional health and wellness
products under development that it plans to commercialize and
distribute through Amerifit's distribution channels.
Martek's technology platform has also made it a sought-after
partner on a range of groundbreaking projects in process, including
the development of microbially-derived biofuels and the development
of DHA-containing oilseeds. For more information on Martek
Biosciences, visit http://www.martek.com/. For a complete list of
life'sDHA and life'sARA products, visit
http://www.lifesdha.com/. For more information about Amerifit
Brands, visit www.amerifit.com.
Safe Harbor Statement
Sections of this release contain forward-looking statements.
These statements, including statements about (i) Martek's planned
restructuring initiatives in Winchester,
Ky., and its plans with respect to future activities at that
site, (ii) expected future production and economic benefits of the
restructuring, (iii) expected charges resulting from the
restructuring, (iv) expected production capacity for DHA and ARA,
(v) expected future growth in demand for, and sales of, Martek
products, and (vi) performance of the Amerifit division, are based
upon numerous assumptions which Martek cannot control and involve
risks and uncertainties that could cause actual results to differ.
These statements should be understood in light of the risk factors
set forth in the company's filings with the Securities and Exchange
Commission, including, but not limited to, the company's Form 10-K
for the fiscal year ended October 31,
2009 and other filed reports on Form 10-K, Form 10-Q and
Form 8-K.
Contact:
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Kyle Stults
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Investor Relations,
Martek
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(410) 740-0081
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investors@martek.com
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Cassie France-Kelly
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Public Relations,
Martek
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(443) 542-2116
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media@martek.com
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SOURCE Martek Biosciences Corporation
Copyright . 23 PR Newswire