Aceto Corp. is going out of business, having sold its chemicals and generic drug divisions in auctions supervised by a bankruptcy court, the CEO of the Port Washington company said Tuesday.
“We have now completed the sales of all of our operating businesses,” William C. Kennally III said in a statement. “We will proceed with the process of preparing, filing and seeking confirmation of an orderly plan of liquidation, with all that process entails.”
The company’s local workforce totaled 80 in 2017, according to the most recent state records.
Kennally’s announcement coincided with the closing of New Mountain Capital’s purchase of Aceto’s chemicals unit for $422 million. New Mountain is a private equity investor headquartered in Manhattan.
In a securities filing on Tuesday, Aceto said it used $234.6 million of the sale proceeds to settle debts and $2.6 million to pay off the mortgage on the Port Washington headquarters.
In February, Aceto, which has been in business for 72 years, filed for Chapter 11 bankruptcy protection from its creditors, citing massive debt and mounting losses from its Rising Pharmaceuticals Inc. division in New Jersey. The sale of Rising to an India-based drug company for $15 million was completed in mid-April.
The buyer, Shore Suven Pharma Inc., is a joint venture of Suven Life Sciences Ltd., a public company in Telangana, India, and Aceto board director Vimal Kavuru, according to company documents.
Kavuru will serve as CEO of Shore. He joined the Aceto board and ran Rising after selling some of the assets of two drugmakers to Aceto for $462 million in December 2016. He operated those two drugmakers at the time. The acquisitions were part of a strategy by Aceto to enlarge Rising, which it purchased in December 2010.
In a securities filing last week, Aceto said Kavuru “recused himself from all further company board of director meetings” as of Nov. 14 because he wanted to buy Rising. “The purchase price was determined by arms-length negotiations following a competitive bidding process,” Aceto said in the filing.
The company’s shares began trading April 3 on the Over-The-Counter Pink Sheet Market after being delisted from the Nasdaq stock market.