Nanogen enters asset purchase agreement with Elitech and files for
28 May 2009
Nanogen, Inc. (Pink Sheets: NGEN), developer of molecular and rapid
diagnostic products, has executed an asset-purchase agreement with
French company Elitech Group, a privately held diagnostics company, to
acquire substantially all of the assets of Nanogen.
As part of the sale, Nanogen filed a voluntary petition under chapter
11 of title 11 of the United States Code in the Bankruptcy Court for the
District of Delaware, including a motion seeking bankruptcy court
approval of the sale, subject to a court-supervised auction pursuant to
Section 363 of the Bankruptcy Code and designating Elitech as the
stalking horse bidder.
The auction bidding procedures, if approved, would require interested
parties to submit higher and better binding offers to acquire all of the
Company’s assets within approximately 30 days, and, assuming any
qualified overbids are submitted, an auction would be held within
approximately one week of the bid deadline.
The filing does not affect the operations of Nanogen Advanced
Diagnostics, Srl (NAD), the Company’s European affiliate located in
Milan, Italy, or NAD’s creditors and lenders as NAD is not a party to
the Company’s bankruptcy filing. Under the asset purchase agreement,
Elitech will acquire ownership of NAD.
Nanogen has agreed to sell substantially all of its assets to Elitech
for a purchase price of $25.7 million. The sale is subject to customary
closing conditions, approval of the Bankruptcy Court and the auction
process in which the Company will seek competing bids to achieve the
highest price possible for the assets. The Company will continue to
manage and operate its businesses and assets during the pendency of the
sales process, subject to the supervision of the Bankruptcy Court.
In conjunction with the filing, Nanogen is seeking customary
authority from the Bankruptcy Court that will enable it to continue
operations and deliver products to customers in the ordinary course of
business and without interruption.
The requested approvals include requests for the authority to make
wage and salary payments, continue various benefits for employees, and
honor basic terms of business for its customers. In addition, Nanogen
expects to honor its obligations to its vendors and other business
partners for goods and services received after the bankruptcy filing.
The companies announced an agreement to merge in August 2008. On
January 21, 2009, Nanogen announced that it would seek alternatives to
the previously announced share exchange agreement with Elitech. Despite
extensive and thorough efforts by the Company and its advisors, the
Company was unable to secure sufficient working capital or alternative
corporate transactions to enable the Company to service its debt
obligations and fund its operations.
The Company’s management believes that filing for relief under
Chapter 11 and the proposed sale of its businesses are in the best
interest of the Company, as well as its partners, vendors, customers and
The Company says it will not have sufficient proceeds to permit
distributions of cash or other property to its holders of common stock
unless the Company succeeds in selling its assets for an amount
significantly in excess of the amount contemplated by the asset purchase
agreement with Elitech.
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