8-KMaterial AgreementsOther EventsExhibits & Filings

BRISTOL MYERS SQUIBB CO 8-K Report, Material Agreement (May 7, 2008)

Filed May 7, 2008For Securities:BMYCELG-RIBMYMP

Summary

Bristol-Myers Squibb Company (BMY) has announced the sale of its ConvaTec business to Cidron Healthcare Limited, an affiliate of Nordic Capital and Avista Capital Partners, for $4.1 billion in cash. This significant divestiture is expected to close in the third quarter of 2008, pending regulatory approvals and other customary conditions. The sale includes all outstanding capital stock of certain indirect subsidiaries and specified assets and liabilities related to the ConvaTec business. Investors should note that the final purchase price is subject to adjustments based on closing working capital and a potential reduction if audited 2007 EBITDA falls below unaudited figures by a significant margin. The agreement also includes customary representations, warranties, and covenants, such as business conduct restrictions prior to closing and a three-year non-compete clause for Bristol-Myers Squibb in the ConvaTec business's sector. The buyers have secured committed financing, indicating a strong likelihood of closing. This strategic move signals a potential refocusing of Bristol-Myers Squibb's core operations.

Key Highlights

  • 1BMY is selling its ConvaTec business to Cidron Healthcare Limited (an affiliate of Nordic Capital and Avista Capital Partners).
  • 2The transaction is valued at $4.1 billion in cash.
  • 3The sale is expected to close in the third quarter of 2008, subject to regulatory approvals and closing conditions.
  • 4The purchase price is subject to adjustments based on closing working capital and potential EBITDA shortfalls from audited 2007 financials.
  • 5Bristol-Myers Squibb will be restricted from competing with the ConvaTec business for three years post-closing, with certain exceptions.
  • 6The buyer has secured fully committed financing for the transaction, removing a potential closing contingency.
  • 7This divestiture represents a significant strategic shift, likely allowing BMY to concentrate on its core pharmaceutical and biopharmaceutical segments.

Frequently Asked Questions

This Form 8-K filing announces Bristol-Myers Squibb's entry into a material definitive agreement to sell its ConvaTec business to Cidron Healthcare Limited for $4.1 billion in cash.

Yes, the final purchase price is subject to adjustments. These include variations in the ConvaTec business's closing working capital and a potential reduction if the audited 2007 EBITDA is significantly lower than the unaudited figures. If the EBITDA shortfall exceeds $10 million, the buyer has the right to terminate the agreement.

The transaction is anticipated to close in the third quarter of 2008. Key requirements include obtaining customary regulatory approvals (e.g., in the U.S. and EU), delivering audited 2007 financial statements for the ConvaTec business, and satisfying other standard closing conditions.

Following the closing of the transaction, Bristol-Myers Squibb is prohibited for three years from engaging in any business that materially competes with the ConvaTec business, subject to specific exceptions outlined in the purchase agreement.