Caraco Announces $5.25-A-Share Deal With Sun Pharma

Detroit-based Caraco Pharmaceutical Laboratories Ltd. (NYSE Amex: CPD) said Tuesday that it had entered into a merger agreement Monday with Sun Pharmaceutical Industires Ltd., an Indian pharma firm that already owns 75.8 percent of Caraco's stock.

Also part of the deal are Sun Pharma Global Inc, a wholly owned subsidiary of Sun Pharma organized under the laws of the British Virgin Islands and a new, indirect wholly owned subsidiary of Sun Pharma incorporated in Michigan.

The merger agreement provides that all shareholders of Caraco other than Sun Pharma and Sun Global will receive a cash payment of $5.25 per share upon the closing of the transaction.

As previously disclosed, Sun Pharma and Sun Global had proposed  a "going private" transaction by which Sun Pharma, Sun Global and one or more of their affiliates would acquire all of the outstanding shares of Caraco common stock not held by Sun Pharma and Sun Global for a per share consideration of $4.75 cash.

Caraco entered into the merger agreement based upon the recommendation and approval of the Independent Committee of Caraco's Board of Directors and the approval of the Board of Directors. The Independent Committee  was advised by William Blair & Co. L.L.C. as its independent financial advisor and Carrington Coleman as its independent legal counsel.

The closing of the transaction is subject to certain terms and conditions customary for transactions of this type, including receipt of approval by the holders of a majority of Caraco's outstanding common stock at a special meeting of stockholders.

In the merger agreement, Sun Pharma has agreed to cause all shares of Caraco common stock owned by Sun Pharma and Sun Global to be voted in favor of the merger. In connection with the proposed transaction, Caraco intends to file a proxy statement and other relevant materials with the Securities and Exchange Commission. Upon completion of the transaction, Caraco will become a privately held company and its common stock will no longer be traded on the NYSE Amex.

Detroit-based Caraco develops, markets and distributes generic pharmaceuticals to the nation's largest wholesalers, distributors, drugstore chains and managed care providers. The company is in contnuing talks with the Food and Drug Administration to resume production at its Michigan plants, which were shut down by the FDA in 2009 over quality concerns.

More at www.caraco.com.