Filed by
Charles River Laboratories International, Inc.
pursuant
to Rule 14a-12
of the
Securities Exchange Act of 1934
Subject
Company: Charles River Laboratories International, Inc.
(Commission
File No.: 001-15943)
Sales
Q&A for use with Customers
Document
will also be provided to employees who interact with customers
April
26, 2010
The
following Q&A will help you address customer questions and
concerns.
General
Questions
Q:
Why are you doing this deal?
A: By
combining Charles River and WuXi AppTec, we are creating the first fully
integrated, global early-stage CRO.
This
transaction offers a compelling value proposition for our
customers:
|
|
·
|
Customers
will be able to take advantage of our broader portfolio offering drug
development support from molecule creation to first-in-human
testing.
|
|
|
·
|
By
working with one larger strategic partner, we will be able to help you
simplify your processes and improve the efficiency of your early-stage
programs.
|
|
|
·
|
As
a result, we will be able to help you reduce the overall time and cost to
bring a drug to market.
|
|
|
·
|
Our
expanded global presence provides expanded access for placement of studies
across North America, Europe or China as you
choose.
|
Q:
Do
the two Companies share similar values?
A:
Charles River and WuXi AppTec share similar corporate values. We are
both employee centric organizations with a shared goal of accelerating our
clients’ research and drug development programs. We are both focused
on exceeding client expectations and building our scientific
expertise. We pride ourselves on our cultures of employee
longevity. Our shared values, business alignment and goals will play
a key role in successfully integrating the two organizations.
Q:
Who
will constitute the senior management team?
A: The team will consist
of:
|
|
·
|
Charles
River Chairman, Chief Executive Officer, and President, Jim Foster, will
continue to lead the combined
company.
|
|
|
·
|
WuXi
AppTec Chairman and Chief Executive Officer, Dr. Ge Li, will join the
Charles River board and become Corporate Executive Vice President and
President, Global Discovery and China
Services.
|
|
|
·
|
Tom
Ackerman will continue as Chief Financial
Officer.
|
|
|
·
|
Real
Renaud will be head of RMS, Dr. Nancy Gillett will lead PCS, and as
indicated above Dr. Ge Li will be head of a new segment called Discovery
Services.
|
Q:
Will any Charles River and/or WuXi AppTec facilities be eliminated as a result
of the transaction?
A: We see
this as a great opportunity for our customers, the company and our employees
over the long term. In the short term, there will be some overlap of
functions as the two companies merge. In the coming months our
integration teams will evaluate the logistics of the combined company and assess
how best to meet the needs of our customers.
Q:
Do you plan to explore other consolidation opportunities?
A: Our
focus is on ensuring a smooth and seamless integration. Other actions
we may or may not consider doing in the future would be, at this point, pure
speculation.
Q:
When is the transaction expected to close?
A: We
expect the transaction to close during the fourth quarter of 2010.
Q:
What does this mean for me and my relationship with Charles River and/or WuXi
AppTec?
A: In response to our clients’
increasing requests for broader services this combination transforms Charles
River to create the only global CRO to offer fully integrated drug development
services from molecule creation to first-in-human testing. By
combining the industry leaders in in vivo biology and
chemistry, we now offer a comprehensive portfolio of early-stage drug
development services as well as expanded manufacturing services to better meet
your needs. In addition, we can further help you reduce the time and cost to
bring a drug to market by working with one partner that can support all your
early-stage drug development needs.
Representatives
of each company will be actively communicating with its respective customers
today and in the days ahead to discuss further the potential benefits of this
transaction to you. It is business as usual until the transaction
closes – which we expect to occur in the fourth quarter of
2010. During the integration period, there will be no changes in your
contacts or in the terms of your contracts with either company. Your
sales executive will continue to be in touch with you as they normally would,
and you should not hesitate to reach out to them with any questions or
concerns.
Q:
In your press release you state that this is a “transformational
transaction”. What do you mean by that?
A: This
transaction is transformational for our company and the industry. By
acquiring WuXi AppTec, we are creating
the only global CRO to offer fully integrated drug development services from
molecule creation to first-in-human testing. As a result, you will be
able to access comprehensive support for your early-stage drug development needs
from one company with unparalleled scientific depth and breadth. In
addition, we will be able to provide our integrated portfolio of products and
services globally, enabling you to work in the locale you choose, across North
America, Europe and China. The combination of this scope of services
and global footprint is not available from any other contract research
organization.
Q:
What does your new comprehensive portfolio of services include,
exactly?
A: We are
combining leaders in in
vivo biology and chemistry with highly complementary portfolios with
limited overlap. The result is a diversified portfolio which offers
you the following:
|
|
·
|
Chemistry
services including discovery chemistry, analytic/bioanalytic chemistry,
DMPK and bioanalytical analysis, and process chemistry and
scale-up
|
|
|
·
|
In vivo biology
services including assay development and compound screening, research
models and related services, non-GLP efficacy testing, and GLP safety
assessment services
|
|
|
·
|
Manufacturing
services that provide biopharmaceutical and chemistry-based manufacturing
capabilities and support
|
Q:
Will you be outsourcing most of your business to China? Are you going
to close more facilities in North America or Scotland?
A: It is our long-term vision
to support our clients wherever they choose to conduct their drug research and
development. Many of our clients view China as the new frontier for
drug development. It is our goal to establish a strong presence for
drug development products and services in China, in response to our clients’
needs.
We see
this as a great opportunity for our customers, the company and our employees
over the long term. In the short term, there will be some overlap of
functions as the two companies merge. In the coming months our
integration teams will evaluate the logistics of the combined company and assess
how best to meet the needs of our customers.
Q:
Are you going to close your Shanghai operation? And/or any of your
other tox sites?
A: It is
too early to address this question. Operational decisions of that
sort will be made in due course by the integration teams, on which both
companies will be represented, and will make such decisions based on what makes
the most sense for the combined enterprise, and our customers.
Q:
Are you going to change your pricing models in China – or in other regions – as
a result of this combination?
A: It is
business as usual until the transactions closes – which we expect to occur in
the fourth quarter of 2010. This means that during this period there
will be no changes in your contacts or in the terms of your contracts with
either company as a result of this transaction.
Q:
I am in the process of signing a new contract with WuXi AppTec – how does this
acquisition affect that?
A: It is business as usual
until the transaction closes – which we expect to occur in the fourth quarter of
2010. This means that during this period there will be no changes in
your contacts or in the terms of your contracts with either company – so you
should continue to work with WuXi AppTec as you would
normally.
Please
understand that we cannot do business with or on behalf of WuXi AppTec until
this transaction closes – which we expect to occur in the fourth quarter of
2010.
Q:
When will I get to sit down with Charles River and WuXi AppTec to discuss our
future relationship?
A: Representatives of each
company will be actively communicating with our respective customers today and
in the days ahead to discuss the transaction and how it will benefit
you. Please keep in mind that it is business as usual until the
transactions closes – which we expect to occur in the fourth quarter of
2010. Until the transaction closes, Charles River
and WuXi
AppTec will continue to conduct business as separate Companies. This
means that during this period there will be no changes in your contacts or in
the terms of your contracts with either company.
Q:
How are you planning to apply commercial discounts for the combined
company?
A: It is
too early to address this question. Operational decisions of that
sort will be made in due course by the integration teams, on which both
companies will be represented, and which will make such decisions based on what
makes the most sense for the combined enterprise and our customers.
Forward-Looking
Statements
This
document includes “forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements may be
identified by the use of words such as “anticipate,” “believe,” “expect,”
“estimate,” “plan,” “outlook,” and “project” and other similar expressions that
predict or indicate future events or trends or that are not statements of
historical matters. These statements are based on current expectations and
beliefs of Charles River Laboratories International, Inc. (Charles River) and
WuXi PharmaTech (Cayman) Inc. (WuXi), and involve a number of risks and
uncertainties that could cause actual results to differ materially from those
stated or implied by the forward-looking statements. Those risks and
uncertainties include, but are not limited to: 1) the possibility that the
companies may be unable to obtain stockholder or regulatory approvals required
for the combination; 2) problems may arise in successfully integrating the
businesses of the two companies; 3) the acquisition may involve unexpected
costs; 4) the combined company may be unable to achieve cost synergies; 5) the
businesses may suffer as a result of uncertainty surrounding the acquisition;
and 6) the industry may be
subject
to future regulatory or legislative actions and other risks that are described
in Securities and Exchange Commission (SEC) reports filed or furnished by
Charles River and WuXi.
Because
forward-looking statements involve risks and uncertainties, actual results and
events may differ materially from results and events currently expected by
Charles River and WuXi. Charles River and WuXi assume no obligation and
expressly disclaim any duty to update information contained in this filing
except as required by law.
Additional
Information
This document may be deemed to be solicitation
material in respect of the proposed combination of Charles River and WuXi. In
connection with the proposed
transaction,
Charles River will file a preliminary proxy statement and a definitive proxy
statement with the SEC. The information contained in the preliminary filing will
not be complete and may be changed. Before making any voting or investment
decisions, investors and security holders are urged to read the definitive proxy
statement when it becomes available and any other relevant documents filed with
the SEC because they will contain important information. The definitive proxy
statement will be mailed to the shareholders of Charles River seeking their
approval of the proposed transaction. Charles River’s shareholders will also be
able to obtain a copy of the definitive proxy statement free of charge by
directing a request to: Charles River Laboratories, 251 Ballardvale Street,
Wilmington, MA 01887, Attention: General Counsel. In addition, the preliminary
proxy statement and definitive proxy statement will be available free of charge
at the SEC’s website, www.sec.gov
or shareholders may access copies of the documentation filed with the SEC by
Charles River on Charles River’s website at www.criver.com.
Charles
River and its directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding Charles River’s
directors and executive officers is available in Charles River’s proxy statement
for its 2010 annual meeting of shareholders, which was filed with the SEC on
March 30, 2010. Information regarding the persons who may, under the rules of
the SEC, be considered participants in the solicitation of Charles River
shareholders in connection with the proposed transaction will be set forth in
the preliminary proxy statement when it is filed with the SEC.
This
document does not constitute an offer of any securities for sale or a
solicitation of an offer to buy any securities. The Charles River shares to be issued in the proposed
transaction have not been and will not be registered under the Securities
Act of 1933, as amended (the “Securities Act”),
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. Charles River intends to
issue such Charles River shares pursuant to the exemption from registration set
forth in Section 3(a)(10) of the Securities