ST. LOUIS—March 20, 2007—Beleaguered informatics company Tripos announced it had completed the sale of its Discovery Informatics business to affiliates of San Francisco-based Vector Capital for $26.2 million. Part of the proceeds will be used to retire existing Tripos debt with LaSalle Bank and Horizon Technology Finance.
ST. LOUIS—January 3, 2007—Tripos announced a definitive agreement to sell its U.K.-based discovery research operations to Provid Pharmaceuticals for about $2 million. The sale to the New Jersey-based medicinal chemistry service provider is expected to close in Q1 2007.
ST. LOUIS—After months of examining its options and the best way to continue doing business, Tripos, a provider of drug discovery chemistry and informatics products and services, has decided to dissolve itself as a publicly traded entity in favor of selling off both halves of its business.
With the release of its third-quarter financial results on Nov. 14, Tripos had already announced that it would exit the discovery research business after finding a buyer for Tripos Discovery Research, a decision that followed on the heels of continued declines in business for that division and more job cuts at the Discovery Research chemistry facility in England—which brought the headcount down to 43 employees compared with 165 at the beginning of 2006.
"As the year progressed and more and more large pharmaceutical companies decided to take their outsourced chemistry business to low-cost venues in China and India, we had to react match the size of our workforce to business that we had access to during this transition time," explains Dr. John P. McAlister, president and CEO of Tripos.
At that time, Tripos was still talking about restructuring the Discovery Informatics business as a public company and continuing to provide software and enterprise solutions to the pharmaceutical and biotechnology industries. But the third-quarter financial report did mention that the company was also in talks with a potential buyer for that half of the business.
Six days after the third-quarter results were made public, Tripos announced a definitive agreement to sell substantially all of the assets of its Discovery Informatics business to Vector Capital, a San Francisco-based private equity boutique specializing in buyouts, spinouts and recapitalizations of established technology businesses. Plans currently call for that business to operate under some form of the name Tripos. The buyer being courted for the Discovery Research business is still not being identified, but it is clear that the discovery research business will not bear the Tripos name.
Tripos estimates that after the asset sale of Tripos Discovery Informatics, expected to close in the first quarter of 2007, there will likely be between $6 million to $12 million available for distribution to common stockholders.
"Tripos Inc., the current parent entity, is a public company with two business divisions that have quite separate operations," McAlister notes. "They have effectively been operating as two independent units. We are in effect taking them private through acquisitions by independent private entities."
If the two transactions receive shareholder approval and are completed as planned, both of the business units will be in a much better business environment, McAlister predicts.
"They will be private entities and thus free of the incremental costs and regulatory reporting burdens of public companies," he notes. "They will be more able to make strategic decisions that are right for their respective businesses in the long term even if the short term does not yield financial results that are as attractive.