ASCENDIS HEALTH LIMITED - Transaction Update Relating To Ascendis Acquisition Of Remedica

Transaction Update Relating To Ascendis’ Acquisition Of Remedica

ASCENDIS HEALTH LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2008/005856/06)
Share code: ASC ISIN: ZAE000185005
(“Ascendis” or “the Company”)

TRANSACTION UPDATE RELATING TO ASCENDIS’ ACQUISITION OF REMEDICA

Ascendis shareholders (“Shareholders”) are referred to the circular dated 12 July 2016 (the “Circular”) relating to
the acquisition of the entire issued share capital of Remedica Holdings Limited (“Remedica”) from Margrit
Pattichis, Charalambos Pattihis and Goldbond Trading and Investments Ltd (collectively, the “Sellers”) (the
“Acquisition”) and the subsequent announcements released on the Stock Exchange News Service (“SENS”) of
the JSE Limited (“JSE”) regarding the Acquisition, the last of which was dated 26 August 2016 and informed
Shareholders that the Acquisition was implemented. In terms of the Acquisition, a deferred payment of €90 million
is payable to the Sellers on 25 August 2019 (“Deferred Payment”).

The Board of Ascendis (“Board”) has given due consideration to the continued implementation of the Company’s
growth strategy whilst maintaining an optimal capital structure. The Board has considered various options in
formulating a financing strategy that would allow Ascendis to support its growth strategy in the most efficient
manner. To this end, the Board has resolved to raise equity to repay a portion of the Company’s medium term
debt obligations in order to reduce its debt position to a level which the Board considers to be more in line with its
target capital structure and which will provide sufficient flexibility to pursue its growth strategy.

The Board has therefore elected to settle a portion of the Deferred Payment in advance of its due date. The
Sellers have agreed that this portion may be settled at a discount to its outstanding value. Thus, Ascendis has
entered into a deed of variation (“Deed of Variation”) with the Sellers, to inter alia, amend the terms of the
Deferred Payment, as set out below:

    -    In terms of the Acquisition, the Deferred Payment is payable to the Sellers on 25 August 2019 (being the
         third anniversary of the date on which the Acquisition was implemented). It has been agreed to reduce
         the Deferred Payment to €86.2 million (previously €90 million), and accelerate the repayment of €46.2
         million of the reduced deferred payment (“Accelerated Payment”). The Accelerated Payment will be
         funded using the proceeds of the Rights Offer as announced on SENS on 1 November 2017;
    -    In terms of the Acquisition, Ascendis issued shares to the value of €10 million to Charalambos Pattihis at
         R22.00 per share on closing of the Acquisition, as part payment of the purchase consideration, which
         shares were subject to a lock-in period of 3 years. In terms of the Deed of Variation, the lock-in period on
         these shares will expire on signature of the Deed of Variation;
         (collectively, “the Amendments”).

Further to the expiry of the lock-in, in the event that the Sellers wish to dispose of their shares the shares will be
placed by way of a private placement process.

The implementation of the Amendments is expected to have the following benefits:
    -   result in a significant reduction of c.50% of outstanding non-current deferred vendor consideration
        payments, thereby reducing Ascendis’ overall indebtedness;
    -   reduce repayment risk by settling anticipated near term obligations earlier; and
    -   address foreign exchange risk by settling a portion of Euro-denominated vendor liabilities at current
        rates.

The Amendments have been considered by the Board and Ascendis’ legal advisors, who have all confirmed that,
in the context of the overall transaction, the Amendments are not material or inconsistent with the terms of the
Acquisition as approved by Shareholders. Furthermore, the reporting accountants have confirmed that the
Amendments do not have a material effect on the previously calculated pro forma financial effects as disclosed in
the Circular nor Ascendis’ annual results for the period ended 30 June 2017. Consequently, no additional
Shareholder approval is required to affect the Amendments.

13 November 2017

Johannesburg
Sponsor
Investec Bank Limited

Legal Advisors to Ascendis
Cliffe Dekker Hofmeyr Inc.

Reporting Accountant to Ascendis
PricewaterhouseCooper Ltd

Date: 13/11/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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