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UPDATE 1-Martek to sell most of Kentucky plant for $14 mln
September 23, 2010 / 9:07 PM / 7 years ago

UPDATE 1-Martek to sell most of Kentucky plant for $14 mln

* Says Alltech to pay $14 mln over 4 yrs

* To take non-cash charge of $28-$32 mln in Q4

* Sees cash charge of $1 mln

Sept 23 (Reuters) - Martek Biosciences Corp MATK.O said it will sell a major portion of its Winchester, Kentucky plant assets to animal healthcare company Alltech for about $14 million, and take related charges.

Martek, which makes health and nutrition supplements, expects non-cash asset impairment charges of about $28-$32 million in the fourth quarter as well as cash charges of about $1 million related to employee separation costs.

The company said it will get the deal price over the next four years.

The assets being sold include a majority of the land and buildings at the site and also certain equipment including all of the production-scale fermentation and recovery equipment, Martek said.

The deal does not include sale, license or granting of any rights of Martek’s strains, patents or any other technologies, and also does not allow use of the site’s assets to produce polyunsaturated fatty acids for human use for 10 years.

Martek expects the deal to close by Nov. 30, after which it will continue to maintain presence in Winchester with 50 workers, who will work mainly on lab and pilot scale development production, and supply-chain management.

On June 30, Martek said it would cut 45 jobs and was considering selling a portion of the Winchester plant to partly offset price reductions. [ID:nSGE65T0K6]

Martek’s shares, which have gained 17 percent since early August until Thursday, closed at $22.84 on Nasdaq. (Reporting by Shravya Jain in Bangalore; Editing by Gopakumar Warrier)

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