SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): April 17, 2002
PHARMACEUTICAL RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY FILE NUMBER 1-10827 22-3122182
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
ONE RAM RIDGE ROAD, SPRING VALLEY, NEW YORK 10977
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (845) 425-7100
ITEM 5. OTHER EVENTS.
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On April 17, 2002, we acquired ISP FineTech Ltd., or FineTech, and some
related intangible assets from ISP Hungary Holdings Limited and ISP Investments
Inc. for $32 million, under a purchase agreement that we entered into with ISP
Hungary Holdings Limited, ISP Investments Inc. and ISP Chemco Inc. (we refer to
these three companies collectively as the ISP Group, and we refer to such
purchase agreement as the Agreement). FineTech, based in Haifa, Israel,
specializes in the design and manufacture of proprietary synthetic chemical
processes used in the production of complex organic compounds for the
pharmaceutical industry. FineTech will be operated by us as a wholly-owned
subsidiary and will provide immediate chemical synthesis capabilities and
strategic opportunities to us and our customers.
Under the terms of the Agreement, we acquired from ISP Hungary Holdings
Limited all of the capital stock of FineTech and we acquired from ISP
Investments Inc. some intangible assets relating to FineTech's business. In
determining the purchase price, we principally considered (i) the anticipated
synergies between our existing businesses, including employees, and the assets
and business being acquired, including intellectual property, (ii) comparative
businesses of FineTech and the estimated cost and time required to start a
comparable business and (iii) the historical and projected cash flows of
FineTech's business. The acquisition was financed by cash-on-hand and is not
expected to have a material effect on earnings in 2002 and will be accounted for
using the purchase method. We expect the depreciation and amortization resulting
from the transaction goodwill and the write-up of the assets purchased to be tax
deductible.
Dr. Arie Gutman, who was the founder and president of FineTech, will
become the chief executive officer of FineTech. We have entered into a five-year
employment arrangement with Dr. Gutman with non-competition provisions, stock
option grants and a negotiated salary. Additionally, we have selected Dr. Gutman
to our Board of Directors.
We are planning to transfer a portion of FineTech's personnel and
technological resources to a laboratory facility in the northeastern United
States. A parallel research program has been established in Rhode Island and
will immediately be staffed with FineTech employees.
The above description is a summary of principal terms of the Agreement.
We have attached a complete copy of the Agreement to this Form 8-K as an
exhibit. Our description of the terms and conditions of the Agreement is
qualified in its entirety by reference to such exhibit.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(c) Exhibits:
10.1 Purchase Agreement among ISP Hungary Holdings Limited, ISP
Investments Inc., ISP Chemco Inc. and Par Pharmaceutical, Inc.
dated April 17, 2002.
99.1 Press Release announcing the acquisition of ISP FineTech Ltd.
and certain related intangible assets.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
May 2, 2002
PHARMACEUTICAL RESOURCES, INC.
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(Registrant)
/s/ DENNIS J. O'CONNOR
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Dennis J. O'Connor
Vice President, Chief Financial Officer
and Secretary
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