| Mon 30 Jun 2008, 14:27 | | APN - Aspen Pharmacare Holdings Limited - Worldwide acquisition of brands by |
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APN
APN
APN - Aspen Pharmacare Holdings Limited - Worldwide acquisition of brands by
Aspen Global Incorporated
ASPEN PHARMACARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1985/0002935/06
Share code: APN
ISIN: ZAE000066692
("Aspen" or "the Company")
Worldwide acquisition of brands by Aspen Global Incorporated
With reference to the cautionary announcement of 06 June 2008, Aspen Pharmacare
Holdings Limited is pleased to announce the conclusion of a deal by its wholly-
owned subsidiary, Aspen Global Incorporated ("Global"), with leading
multinational pharmaceutical company, GlaxoSmithKline (GSK), whereby Global has
purchased the intellectual property rights to four post-patent originator
products worldwide ("the GSK business"). The deal is valued at GBP 170 million
and is effective 01 July 2008.
The deal is herein referred to as the "Transaction".
RATIONALE FOR THE TRANSACTION
The Aspen Group has fostered a strong relationship with GSK over several years.
Aspen Pharmacare currently markets a number of selected GSK prescription
products into the South African market. Aspen Australia also holds the licence
to market and distribute a portfolio of GSK products into the Australian OTC
market.
Three of the four products acquired are in niche areas of highly specialised
treatments. The acquisition is consistent with a strategy to invest in
specialist and differentiated products. Revenue generated by the GSK business
exceeded ZAR 1 billion in 2007.The Aspen Group`s international operations
currently span Asia, Australasia, Latin America and East Africa. This deal
enables the Aspen Group to further extend its international presence in global
pharmaceutical markets.
The four products acquired are:
Eltroxin - indicated for the treatment of hypothyroidism
Imuran - an immunosuppressant indicated ,inter alia, for the survival of organ
transplants
Lanoxin - indicated for certain heart conditions including heart failure ; and
Zyloric - indicated for the treatment of gout
Except for the rights to market Zyloric in Japan, the rights to these products
have been acquired for all major markets outside the USA.
Global has already established a distribution network in emerging markets and
the Transaction will allow Global to further leverage this network and to expand
distribution into further territories, including Japan and Europe. It has been
the Aspen Group`s intention to increase its global footprint by developing a
distribution network for the sale and marketing of a selected portfolio of
pharmaceutical products. With the recently announced transactions in Latin
America and in East Africa, the Aspen Group has been expanding its capacity to
distribute through its own affiliates.
In addition to the Transaction, Global has entered into a transitional
distribution agreement and a supply agreement with GSK.
The Transaction will be financed with debt facilities. Aspen Global has secured
a six-month bridge financing facility from the Standard Bank Group in this
regard.
CONDITIONS PRECEDENT
There are no conditions precedent to the completion of the Transaction.
PRO FORMA FINANCIAL EFFECTS
The unaudited pro forma financial effects set out in the tables below have been
prepared to assist Aspen shareholders to assess the impact of the Transactions
on the earnings per share ("EPS"), headline EPS ("HEPS") and the net asset value
("NAV") and the tangible NAV ("NTAV") per Aspen ordinary share as at 30 June
2007 and for the year then ended. The pro-forma financial effects have been
prepared for illustrative purposes only and, because of their nature, they may
not fairly present Aspen`s financial position at 30 June 2007 and the results of
its operations for the year then ended.
It has been assumed for the purposes of the pro forma financial effects that the
Transactions took place with effect from 1 July 2006 for Income Statement
purposes and 30 June 2007 for Balance Sheet purposes. The Directors of Aspen
are responsible for the preparation of the financial effects which have not been
reviewed by the auditors.
The "After" columns represent the effects after the Transactions.
The "Change %" columns compares the "After" columns to the "Before" columns.
The number and weighted average number of shares in issue have been stated net
of treasury shares.
Actual Pro Forma Change %
"Before" "After" the
(1) GSK
transaction
(2,3,4,5)
EPS (cents) for the year ended 30 205.6 285.6 38.9
June 2007
HEPS (cents) for the year ended 30 210.1 290.1 38.1
June 2007
NAV (cents) as at 30 June 2007 633.3 633.3 0
NTAV (cents) as at 30 June 2007 308.2 (408.4) (232.5)
Number of shares in issue as at 30 350.6 350.6
June 2007 (`million)
Weighted average number of shares in 348.9 348.9
issue for the year ended at 30 June
2007 (million)
Notes:
Extracted from the published audited annual financial statements for the year
ended 30 June 2007.
The figures for the GSK business were extracted from the unaudited management
accounts for the twelve months ended 31 December 2007. These accounts do not
include indirect expenses and hence an adjustment of R83.2 million has been made
to reflect such expenses.
The entire purchase price represents intangible assets acquired. It is
estimated that 25% of the intangible assets are amortisable over an average of
25 years. The balance constitutes indefinite life assets.
Transaction costs of R57.8 million relating to the Transaction were included in
determining the financial effects.
A notional interest charge at a pre-tax rate of 7.0% has been applied in
determining the financial effects.
CATEGORISATION
In terms of the Listings Requirements of the JSE Limited, the Transaction has
been aggregated and is categorised as a Category 2 transaction.
30 June 2008
Sponsor: Investec Bank Limited
Date: 30/06/2008 14:27:01 Produced by the JSE SENS Department.
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