(Read more on the industrial market.)

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RIVERSIDE, PA-Under an unusual agreement, Merck & Co. Inc.has sold its 327-acre pharmaceutical manufacturing complex to anentity of Philadelphia-based PRWT Services Inc. PRWT will continueto operate the plant through its affiliate, CherokeePharmaceuticals LLC.

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Simultaneous with the acquisition, Cherokee signed a five-yearsupply agreement with Merck for an estimated value of between $100million and $200 million a year. The plant, known as the Cherokeechemical manufacturing plant, produces antibiotic products forhumans and animals. It was among the largest employers inNorthumberland County, and the new owner is retaining all 400employees.

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PRWT is an African-American owned company and one of the largestminority-owned firms in the US. It was founded in 1988 to providebusiness process outsourcing services to state and localgovernments nationwide. It entered a new line of business in 2000with the acquisition of Philadelphia-based US Facilities Inc., afacilities management firm. The Merck buy marks its entry into thepharmaceuticals arena.

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In a statement, Willie Johnson, PRWT's chairman and CEO, says"the acquisition of the Cherokee plant is consistent with PRWT'svision of growing the company by expanding into new markets,services and lines of business. By establishing a presence in thelife sciences market, PRWT can now participate in an industry withtremendous growth potential and establish a strategic supplierrelationship with Merck."

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It intends to "make considerable capital investments" in thefacility. Justin Noll, Cherokee plant manager, says, "we arelooking forward to being a stand-alone company and a company whichwill have great potential for expansion."

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Under a global restructuring of its manufacturing operationsannounced in November 2005, Whitehouse Station, NJ-based Merckannounced plans to sell this and four other facilities from whichit expected to gain aggregate proceeds of approximately $4 billion.Neither Merck nor PRWT would disclose the price of thisacquisition, and, due to the unusual nature of the two-prongagreement, two area industrial brokers contacted by GlobeSt.comdeclined to offer even a guess on the price.

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A spokeswoman for Cherokee tells GlobeSt.com that 127 acres are"inside the fence line," and the complex contains 60 buildings, butshe was unable to immediately quantify the aggregate squarefootage. Although PRWT did not receive state funding for theacquisition, Gov. Ed Rendell issued a statement applauding theagreement and citing his own previous work with PRWT as both mayorof Philadelphia and governor. "We're looking for big things fromPRWT. We'll be keeping an eye on this venture, because ourmanufacturing base is vital to our economy and pharmaceuticals,specifically, is an important sector."

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