Zila Completes Strategic Divestiture of Nutraceuticals Division
Zila Nutraceuticals, manufacturer and marketer of Ester-C and Ester-E, was purchased by NBTY, Inc.. The sale is consistent with Zila's strategy of focusing its business on cancer detection technologies and divesting its non-core assets.
05/10/06 Zila, Inc. has completed the divestiture of its wholly-owned subsidiary Zila Nutraceuticals, Inc. for a total cash transaction of $37.5 million with up to an additional $3 million to be paid through an earn-out formula dependent upon the future performance of the business. Zila Nutraceuticals, manufacturer and marketer of Ester-C and Ester-E, was purchased by NBTY, Inc.. The sale is consistent with Zila's strategy of focusing its business on cancer detection technologies and divesting its non-core assets.
"This sale accomplishes several very important objectives for Zila by completing our exit from the nutraceuticals space on favorable financial terms and providing capital to fund our future strategic business objectives and operations," said Zila Chairman, President and CEO, Douglas D. Burkett, Ph.D.
The Company has used part of the net proceeds from the sale to repay the remaining outstanding funds owed in connection with the $40 million Black Diamond Credit Facility. With the exception of approximately $500,000 of capital lease obligations, Zila now has no debt.
The balance of the proceeds may be used to pursue opportunities focused on the development and commercialization of cancer detection products by its Pharmaceuticals and Biotechnology Business Units, including a potential acquisition currently under a non-binding letter of intent, and for general corporate purposes.
Alvarez & Marsal Corporate Finance served as exclusive financial advisor to Zila, Inc. in connection with the sale of Zila Nutraceuticals, Inc., as well as in the securing of the $40 million credit facility with Black Diamond Commercial Finance, L.L.C. that was retired from the proceeds of such sale.
