The Daily Item, Sunbury, PA

News

January 3, 2008

Merck sale is finalized

RIVERSIDE -- After months of negotiations, the Merck & Co. Cherokee plant has been sold to a Philadelphia-based labor management company.

PRWT Services Inc. finalized the sale Tuesday and will begin to operate the manufacturing plant as Cherokee Pharmaceuticals LLC. The local plant will continue to manufacture Merck antibiotics, according to a new five-year supply agreement valued at an estimated $100 million to $200 million annually.

A press conference will be held Friday at the Cherokee plant featuring Gov. Edward G. Rendell, who will join PRWT, Cherokee and Merck officials to talk about the new ownership, outline immediate plans for the facility and discuss the economic and community impact the acquisition will have.

PRWT officials declined Wednesday to release the purchase price.

"The acquisition of the Cherokee plant is consistent with PRWT's vision of growing the company by expanding into new markets, services and lines of business," said Willie F. Johnson, PRWT's chairman and chief executive officer. "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."

This will be the first venture into the pharmaceutical business for PRWT, which provides services in operations support, technical services, software products and partnership management.

"The sale of the Cherokee plant, along with the supplier relationship Merck has established with Cherokee Pharmaceuticals, is another important step in the realigning of our manufacturing operations," said Larry Naldi, Merck's senior vice president of science and technology. "The completion of this sale also enables Merck to continue to have a presence in the local community through its interactions with Cherokee."

Merck announced in November 2005 it planned to close or sell five of its 31 manufacturing plants, including the Cherokee plant, which was built in 1941. The move was intended to generate up to $4 billion in savings, the company said.

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