UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): June 14, 2005
LIFE SCIENCES RESEARCH, INC.
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(Exact name of registrant as specified in its charter)
Maryland 0-33505 52-2340150
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
P.O. BOX 2360, METTLERS ROAD, EAST MILLSTONE, NJ 08875-2360
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 732-649-9961
Not Applicable
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Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Item 2.01. Completion of Acquisition or Disposition of Assets.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registant
On June 14, 2005, Life Sciences Research, Inc. and subsidiaries (collectively
"LSR" or the "Company") entered into and consummated purchase and sale
agreements with Alconbury Estates Inc. and subsidiaries (collectively
"Alconbury") for the sale and leaseback of the Company's three operating
facilities in Huntingdon and Eye, England and East Millstone, New Jersey (the "
Transaction"). Alconbury is a newly formed company wholly owned by LSR's
Chairman and CEO, Andrew Baker. Mr. Baker currently is the beneficial owner of
approximately 17.9% of the Company's outstanding shares of common stock.
Virtually all of such shares have been pledged by Mr. Baker as security for the
funds borrowed by Alconbury to pay the consideration for the Transaction. The
total consideration paid by Alconbury for the three properties is $40 million,
consisting of $30 million cash and a five year, $10 million variable rate
subordinated promissory note, which Alconbury has agreed to make a best effort
to repay within twelve months.
As a part of the Transaction, the Company (through subsidiaries) entered into
thirty year leases with Alconbury for each facility, with two five-year renewal
options. Base aggregate annual rent for the facilities is $4,900,000
(approximately $1.8 million in the US and approximately $3.1 million in the UK)
which amount will increase by 3% each year for the UK facilities and by an
amount equal to the annual US consumer price index for the US facility. Under
the terms of the leases, no security deposit was initially required, but a
three-month security deposit will be required at such time that Alconbury
refinances its current financing arrangements. Additionally, because the leases
are "triple net" leases, LSR will also pay for all of the costs associated with
the operation of the facilities, including costs such as insurance, taxes and
maintenance. The foregoing summary is subject to, and qualified in its entirety
by, the terms of the purchase and sale agreements, the leases and the promissory
note, attached hereto as Exhibits 2.1, 2.2, 2.3, 10.1, 10.2, 10.3 and 10.4, the
terms of which are incorporated herein by reference.
Since the Transaction is with a related party (Mr. Baker, the Company's Chairman
and CEO and the owner of Alconbury), an Independent Committee of LSR's Board of
Directors (the "Committee") was formed to analyze and consider the proposed
Transaction. The Committee was comprised of the three independent directors of
LSR: Gabor Balthazar, Afonso Junqueiras and Yaya Sesay. The Committee retained
independent legal and financial advisors to assist it in its analysis. The
Committee and LSR's senior management (other than Mr. Baker) negotiated the key
terms and provisions of the Transaction with Alconbury. The total consideration
paid was based on an assessment and review of the levels of consideration that
were proposed to be paid by independent third party bidders over the past
several years for sale/leaseback transactions of the Company's operating
facilities in transactions that were proposed and negotiated but not ultimately
consummated. The Committee also obtained appraisals of the facilities from
independent real estate appraisal firms.
The proceeds from the Transaction (plus additional cash on hand) were used by
the Company to pay in full its (pound)22.6 million bank debt (approximately
$41.3 million).
On June 14, 2005, the Company issued a press release regarding the Transaction.
The Company's press release is attached as Exhibit 99.1 and is incorporated
herein by reference.
Item 9.01. Financial Statements and Exhibits.
2.1 Contract for the Sale and Purchase, dated as of June 14, 2005, between
Huntingdon Life Sciences Limited and Alconbury Properties I Limited,
relating to the Huntingdon, England facility.
2.2 Contract for the Sale and Purchase, dated as of June 14, 2005, between
Huntingdon Life Sciences Limited and Alconbury Properties II Limited,
relating to the Eye, England facility.
2.3 Purchase and Sale Agreement, dated as of June 14, 2005, between Huntingdon
Life Sciences Inc. and Alconbury Properties III Limited relating to the
East Millstone, NJ facility.
10.1 Lease, dated as of June 14, 2005, among Alconbury Properties I Limited,
ServicePharm Limited and LSR, relating to the Huntingdon, England facility.
10.2 Lease, dated as of June 14, 2005, among Alconbury Properties II Limited,
ServicePharm Limited and LSR, relating to the Eye, England facility.
10.3 Lease Agreement, dated as of June 14, 2005, between Alconbury Properties
III Limited and ServicePharm Inc., relating to the East Millstone, New
Jersey facility.
10.4 Loan Note Instrument, constituting (pound)5,500,041 ($10,000,000) Variable
Rate Secured Loan Stock 2010 of Alconbury Properties I Limited.
99.1 Press Release dated June 14, 2005.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
June 15, 2005 LIFE SCIENCES RESEARCH, INC.
By: /s/ Richard Michaelson
Name: Richard A. Michaelson
Title: Chief Financial Officer & Secretary
Exhibit Index
Exhibit No. Description
2.1 Contract for the Sale and Purchase, dated as of June 14, 2005, between
Huntingdon Life Sciences Limited and Alconbury Properties I Limited,
relating to the Huntingdon, England facility.
2.2 Contract for the Sale and Purchase, dated as of June 14, 2005, between
Huntingdon Life Sciences Limited and Alconbury Properties II Limited,
relating to the Eye, England facility.
2.3 Purchase and Sale Agreement, dated as of June 14, 2005, between Huntingdon
Life Sciences Inc. and Alconbury Properties III Limited relating to the
East Millstone, NJ facility.
10.1 Lease, dated as of June 14, 2005, among Alconbury Properties I Limited,
ServicePharm Limited and LSR, relating to the Huntingdon, England facility.
10.2 Lease, dated as of June 14, 2005, among Alconbury Properties II Limited,
ServicePharm Limited and LSR, relating to the Eye, England facility.
10.3 Lease Agreement, dated as of June 14, 2005, between Alconbury Properties
III Limited and ServicePharm Inc., relating to the East Millstone, New
Jersey facility.
10.4 Loan Note Instrument, constituting (pound)5,500,041 ($10,000,000) Variable
Rate Secured Loan Stock 2010 of Alconbury Properties I Limited.
99.1 Press Release dated June 14, 2005.