Atrium Biotechnologies acquires Douglas Laboratories for C$107 million

By E. Janene Geiss

Philadelphia, Dec. 9 - Aeterna Zentaris Inc. said Friday that its subsidiary, Atrium Biotechnologies Inc. has acquired Pittsburgh-based HVL Inc., whose main brand is Douglas Laboratories.

Douglas has been marketing health and nutritional products through health care practitioners for more than 50 years and has current annual revenues of about C$80 million, according to a company news release.

Under terms of the agreement, Atrium will acquire Douglas for C$107 million, which represents about 6.4 times the adjusted EBITDA generated by Douglas.

About C$97 million will be paid in cash while the remaining C$10 million will be paid in Atrium subordinate voting shares issued to certain Douglas management shareholders at a price of C$10.95 per share, officials said.

The cash portion will come from Atrium's cash-on-hand and its newly renegotiated credit facility that can be increased to C$200 million under certain conditions, officials said.

"This significant acquisition represents Atrium's commitment to its aggressive corporate development strategy as well as immediately increases its EBITDA, net earnings and net earnings per share," stated Gilles Gagnon, president and chief executive officer at Aeterna.

The transaction, which is effective Dec. 9, is immediately accretive to Atrium, enabling it to increase its adjusted EBITDA from about C$31 million to about C$48 million on a pro forma basis and therefore also increasing its earnings per share by more than 50% before synergies, officials said.

Following the transaction, Atrium's pro forma revenues will exceed C$315 million, officials said.

By acquiring Douglas, Atrium said it positions itself as the leader in this sector throughout the United States, officials said.

Atrium Biotechnologies is a Quebec City, Quebec, developer, manufacturer and marketer of science-based products for the cosmetics, pharmaceutical, chemical and nutrition industries.

Aeterna Zentaris is a biopharmaceutical company engaged in the discovery, development and marketing of therapies for cancer and endocrine disorders.

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