MOUNTAIN VIEW, CA (November 7, 2000) - Catalytica, Inc. (Nasdaq: CTAL) today announced that it plans
to restructure its Catalytica Pharmaceuticals business in order to increase efficiencies in its operations.
As a result of an extensive review of its business, Catalytica Pharmaceuticals plans to close its small Bay
View chemical manufacturing operation in East Palo Alto, California, a facility with limited capacity and
flexibility. Catalytica Pharmaceuticals will transfer products currently manufactured at Bay View to its
Greenville, North Carolina and South Haven, Michigan facilities and, at the same time, will reorganize the
Greenville and South Haven facilities to increase efficiency and better serve customers.
As a result of the facility closure and reorganization, Catalytica will incur a pre-tax charge of approximately
$12-14 million in the fourth quarter, of which $3-4 million will require cash payments and the remainder will
represent non-cash write-offs.
Ricardo B. Levy, president and chief executive officer of Catalytica, Inc., commented, "This
restructuring is
the result of an extensive review of our operations by our management team at Catalytica Pharmaceuticals
with a keen focus on efficiency and uncompromised quality and service to our customers. Through feedback
compiled from
customer surveys and help from outside experts regarding streamlining the manufacture of
pharmaceutical products, we have put in place a
restructuring plan that we believe will both improve our cost
structure and enable us to continue to be responsive to our customers' needs."
Catalytica announced on August 2, 2000, that
DSM will acquire Catalytica's
pharmaceuticals business
through the purchase of Catalytica, Inc. for approximately $750 million plus the assumption of debt, for a
total current value of approximately $800 million. The transaction is structured as a merger of a
wholly-owned U.S. subsidiary of
DSM with Catalytica and a taxable
spin-off of the Catalytica Combustion
Systems and Catalytica Advanced Technologies businesses as a single entity to Catalytica stockholders. As a
result, Catalytica will operate as a subsidiary of DSM and the Catalytica Combustion Systems and Catalytica
Advanced Technologies businesses will comprise a stand-alone company that has been re-named Catalytica
Energy Systems, Inc. Shares of the spin-off company will be distributed in conjunction with the close of the
merger. Catalytica Energy Systems, Inc. has filed a registration statement on Form S-1 with the SEC with
respect to the spin-off. Catalytica, Inc. has filed a preliminary proxy statement on Schedule 14A with respect
to the merger agreement and merger with DSM. Concurrently, Catalytica, Catalytica Energy Systems, and
DSM are moving forward in order to complete this transaction in the fourth quarter.
Catalytica Pharmaceuticals, Inc., a subsidiary of Catalytica, Inc., provides the pharmaceutical and biotech
industries with comprehensive skills and demonstrated commercial experience in a broad spectrum of areas
extending from
process development through drug development,
formulation, manufacturing, and
packaging. Its customers include
Aventis,
Eli Lilly,
Glaxo Wellcome,
Pfizer, Pharma