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)
Leadership
Q&A
April
26, 2010
The
following Q&A will help you address employee questions and
concerns.
Q:
Why are we planning to acquire WuXi AppTec?
A: This
combination transforms Charles River and our industry by creating the only
global CRO to offer fully integrated drug development services from molecule
creation to first-in-human testing.
This is a
good opportunity for Charles River for four reasons:
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Enables
us to better serve our customers
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Enhances
our management team and scientific
expertise
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Drives
profitable revenue growth
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Gives
us a strong presence in China, an emerging research frontier for our
clients
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Q:
How will the acquisition impact our business?
A: This
transaction will strategically strengthen the company, which is good for
employees. We are introducing a new business segment, Discovery
Services (DS), which will complement our existing RMS and PCS
businesses. The DS business will consist of discovery and medicinal
chemistry, China-based non-GLP efficacy testing, chemistry-based manufacturing,
and discovery and imaging services. Customers are already outsourcing
in these areas which are fast-growing and profitable.
We are
excited about our expanded portfolio and how this transaction enables us to grow
the business in new areas.
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 our scientific expertise. We
pride ourselves on our cultures of employee longevity. Our shared
values, business and goals will play a key role in successfully integrating the
two organizations.
Q: Who is WuXi AppTec and what will the combined company
look like?
A: WuXi
AppTec is a leading drug research and development outsourcing company with
expertise in discovery chemistry. The Company was established in 2000
and has steadily grown to more than 4,000 employees with operations in China and
the United States. The combined company will have 12,000 employees
providing unparalleled support for our customers’ chemistry, biology and
early-stage drug development needs. For additional information on
WuXi PharmaTech, visit www.pharmatechs.com.
Q:
Does this mean we will transfer the work in North America and Europe to
China?
A: It is
our long-term vision to support our clients wherever they choose to conduct
their drug research and development. 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, to meet our
clients’ needs.
This
transaction will enable us to support our clients’ drug development needs in all
three geographic locations. This will enable our clients to work with
us in whatever location they choose; including North America, Europe, China or a
combination of sites.
It is
important to understand, that there is limited capacity in China, which will
restrict the amount of work that can be done in that area. Currently
North America and Western Europe have more than 8M square feet of preclinical
capacity vs China which has approximately 500K square feet.
Q:
Where will Charles River be headquartered?
A: Our headquarters will
remain in Wilmington, Massachusetts.
Q:
What makes this the right time to do this deal, especially considering we
recently reduced staff and closed facilities?
A:
Despite the difficult economy, we must respond to the changing market
environment and the needs of our client base —which calls for us to continue to
grow our business. This is a time when we see clients merging and
expecting that their suppliers have increasingly broader
portfolios. Through acquisitions of companies like WuXi AppTec, we
are building a stronger Company that will be well-positioned to compete in the
future. The Chemistry business is an emerging, fast growing area that will
enable us to grow our business faster.
Q:
When will I know what impact, if any, the transaction will have on me, my job,
my responsibilities, etc.?
A: We see this as a great
opportunity for the company and our employees over the long term. As
the two companies merge, there will be some limited duplication of functions but
the majority of employees will not be impacted. These duplications
will be identified in the coming months by the integration teams as we solidify
our integration strategy. We will work through the integration
process as quickly as possible.
Q:
What are the duplicate functions—i.e. jobs—that are going to be eliminated? In
areas where jobs are eliminated, how will it be decided who goes and who
stays? Will it be based on seniority? Job
performance? Some other criteria?
A: We see this as a great
opportunity for the company and our employees over the long term. As
the two companies merge, there will be some limited duplication of functions but
the majority of employees will not be impacted. These duplications
will be identified in the coming months by the integration teams as we solidify
our integration strategy. We will work through the integration
process as quickly as possible.
Q:
What sort of severance benefits will employees, whose jobs are eliminated,
receive? Will the company provide enhanced outplacement
services?
A: Employees leaving the
company will be treated fairly and with the courtesy and professionalism they
deserve. We will provide each impacted employee with career counseling services
through an outside professional vendor. We will be addressing this
topic with employees once the integration plan is finalized.
Q:
If my job is eliminated, can I apply for another job at the combined
company?
A: It’s our longstanding
policy to allow any employee to apply for any open position.
Q:
Will I be offered a job at the remaining corresponding facility in my
geography?
A: Operational decisions will
be made by the integration team, which is comprised of individuals from both
companies in the next few months. We will work through the
integration process as quickly as possible.
Q:
Should I contact my counterparts at WuXi AppTec to begin discussing transition
plans?
A: No. Until the
transaction is completed, both companies must continue to pursue their
respective business activities as separate, stand-alone enterprises, exactly as
before. It is business as usual at Charles River.
Q:
Will there be any changes to our benefits program?
A: We do not anticipate any
changes in the benefit programs at this time.
Q:
When is the transaction expected to close?
A: We
expect the transaction to close in the fourth quarter of 2010.
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 AppTec(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
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
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