PRWT buys Merck & Co chemical facility

PRWT Services says that, through its wholly-owned subsidiary, Cherokee Pharmaceuticals, it has acquired the Cherokee chemical manufacturing plant in Riverside, Pennsylvania, from US drug major Merck & Co. Cherokee has also entered into a five-year supply agreement with Merck worth an estimated $100.0-$200.0 million annually. Further financial terms were not disclosed.

Willie Johnson, chief executive of PRWT, said the acquisition of the Cherokee plant is consistent with the firm's "vision of growing the company by expanding into new markets, services and lines of business. By establishing a presence in the Life Sciences market, PRWT can now participate in an industry with tremendous growth potential and establish a strategic supplier relationship with Merck, one of the premier pharmaceutical companies in the world."

The Cherokee plant is a state-of-the-art active pharmaceutical ingredients manufacturing facility of products/antibiotics for humans and animals. All 400 employees working at the plant will be offered jobs and were expected to transfer to PRWT effective January 1. PRWT also intends to make considerable capital investments in the Cherokee plant to support the growth of the business. The sale of the site is part of Merck's global restructuring of its manufacturing operations (announced November 2005) to create a network that is better aligned to Merck's current and anticipated future product demand.