AMRI Announces Proposed Private Offering of $100 Million Cash Convertible Senior Notes

ALBANY, New York, Nov. 18, 2013 /PRNewswire/ -- Albany Molecular Research, Inc. (NASDAQ: AMRI) ("AMRI") announced its intention to privately offer $100 million principal amount of cash convertible senior notes due 2018, subject to market and other conditions, to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). AMRI also expects to grant the initial purchasers of the notes an option to purchase up to an additional $15 million principal amount of the notes solely to cover over-allotments, if any.

J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC are acting as joint-bookrunning managers for the proposed offering.

The interest rate, conversion rate and other terms of the notes will be determined by negotiations among AMRI and the initial purchasers of the notes. When issued, the notes will be unsecured senior obligations of AMRI. AMRI expects to pay interest on the notes semi-annually on May 15 and November 15 of each year, commencing May 15, 2014. The notes will mature on November 15, 2018, unless earlier repurchased or converted into cash in accordance with their terms prior to such date. The notes will be convertible at the option of the holders only in certain circumstances and solely into cash. The notes will not be convertible into AMRI's common stock or any other security under any circumstances. AMRI will not have the right to redeem the notes prior to maturity.

In connection with the pricing of the notes, AMRI intends to enter into privately negotiated cash convertible note hedge transactions with one or more of the initial purchasers of the notes or their respective affiliates (the "option counterparties"). The initial strike price of the cash convertible note hedge transactions is expected to be the same as the initial conversion price of the notes. AMRI also intends to enter into privately negotiated warrant transactions with the option counterparties. If the initial purchasers exercise their over-allotment option, AMRI may increase the size of the cash convertible note hedge transactions and enter into additional warrant transactions.

The cash convertible note hedge transactions are expected to offset cash payments due upon conversion of the notes in excess of the principal amount thereof in the event that the market value per share of common stock at the time of conversion of the notes is greater than the strike price under the cash convertible note hedge transactions. If, however, the market price per share of common stock exceeds the strike price under the warrant transactions as well at the time they are exercised, there would be dilution from conversion of the notes to the extent the then-current market price per share of common stock exceeds the strike price under the warrant transactions.

In connection with establishing their initial hedge of the cash convertible note hedge and warrant transactions, the option counterparties or their affiliates have advised AMRI that they expect to enter into various derivative transactions with respect to AMRI's common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of AMRI's common stock or the notes at that time. In addition, the option counterparties or their affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to AMRI's common stock and/or purchasing or selling AMRI's common stock or other securities of AMRI in secondary market transactions following the pricing of the notes and prior to the maturity of the notes (and are likely to do so during any observation period related to a conversion of notes). This activity could also cause or avoid an increase or a decrease in the market price of AMRI's common stock or the notes.

AMRI expects to use a portion of the net proceeds from the offering of the notes to pay the cost of the cash convertible note hedge transactions (after such cost is partially offset by the proceeds from the sale of the warrants). The remaining net proceeds from the offering may be used for working capital and other general corporate purposes, including to fund possible acquisitions of, or investments in, complementary businesses, products, services, technologies and capital expenditures.

The notes have not been and will not be registered under the Securities Act or the securities laws of any state or other jurisdiction and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable securities laws of any relevant state or jurisdiction.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities nor shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. AMRI gives no assurance that the proposed offering can be completed on any terms.