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Divestiture
 6 Months Ended
Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Divestiture Assets and liabilities held for sale
On June 20, 2024, the Company announced that it had entered into the Asset Purchase Agreement to sell its Drug Product facility in Baltimore-Camden to an affiliate of Bora, a leading international pharmaceutical services company, for a total value of approximately $30.0 million. The Camden site, which is part of the Company’s Bioservices segment, has clinical and commercial non-viral aseptic fill/finish services on four fill lines, including lyophilization, formulation development, and support services. Alongside the facility, approximately 350 current Emergent employees are expected to join Bora as part of the transaction.
The Camden Transaction is expected to close in the third quarter of 2024, subject to the satisfaction or waiver of customary closing conditions.
In the accompanying Condensed Consolidated Balance Sheet as of June 30, 2024, the assets and liabilities that are expected to be conveyed in the Camden Transaction are classified as held for sale and are measured at the lower of (i) the carrying value of the disposal group and (ii) the fair value of the disposal group, less costs to sell. Effective with the designation of the Camden Transaction as held for sale on June 20, 2024, the Company suspended recording depreciation of property, plant and equipment and right-of-use assets while these assets are classified as held for sale. Any loss resulting from the measurement is recognized in the period the held for sale criteria are met. Conversely, gains are not recognized until the date of sale. The Company recognized a loss on assets held for sale of $40.0 million, including transaction costs of $3.9 million, during the three months ended June 30, 2024 in “Gain (loss) on sale of business and assets held for sale” within non-operating activities.
Assets and liabilities classified as held for sale in the Condensed Consolidated Balance Sheets as of June 30, 2024 consist of the following:
June 30, 2024
Assets held for sale:
Accounts receivable, net$21.5 
Inventories, net28.9 
Prepaid expenses and other current assets0.5 
Property, plant and equipment, net22.1 
Other assets0.7 
Valuation allowance(40.0)
Total assets held for sale$33.7 
Liabilities held for sale:
Accounts payable$6.5 
Accrued compensation2.5 
Other current liabilities0.3 
Other liabilities0.8 
Total liabilities held for sale$10.1 
Divestiture
On May 15, 2023, pursuant to the Purchase and Sale Agreement (the “Purchase and Sale Agreement”), by and between the Company, through its wholly owned subsidiaries Emergent International Inc. and Emergent Travel Health Inc., and Bavarian Nordic, the Company completed the sale of the Company’s travel health business, including rights to Vivotif®, the licensed typhoid vaccine; Vaxchora®, the licensed cholera vaccine; the development-stage chikungunya vaccine candidate CHIKV VLP; the Company’s manufacturing site in Bern, Switzerland; and certain of its development facilities in San Diego, California.
At the closing, Bavarian Nordic paid a cash purchase price of $270.2 million, exclusive of customary closing adjustments for cash, indebtedness, working capital and transaction expenses of the business at closing. Bavarian Nordic may also be required to pay milestone payments of up to $80.0 million related to the development of CHIKV VLP and receipt of marketing approval and authorization in the U.S. and Europe, and earn-out payments of up to $30.0 million based on aggregate net sales of Vaxchora® and Vivotif® in calendar year 2026. On July 18, 2024, Bavarian Nordic announced that the European Medicines Agency had validated the marketing authorization application, which triggered a development milestone payment under the Purchase and Sale Agreement to the Company in the amount of $10.0 million. See Note 18, “Subsequent events” for more information on the development milestone trigger.
As a result of the divestiture, the Company recognized a pre-tax gain of $74.2 million, net of transaction costs of $4.0 million recorded within "Gain (loss) on sale of business and assets held for sale" on the Condensed Consolidated Statements of Operations during 2023.
In connection with the divestiture, the Company entered into a Transition Services Agreement (“TSA”) with Bavarian Nordic to help support its ongoing operations. Under the TSA, the Company provides certain transition services to Bavarian Nordic, including information technology, finance and enterprise resource planning, research and development, human resources, employee benefits and other limited services. Income from performing services under the TSA is recorded within "Other, net" on the Condensed Consolidated Statements of Operations and was $0.1 million and $0.5 million for three and six months ended June 30, 2024, respectively and $1.0 million for the three and six months ended June 30, 2023.