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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 Supplied by www.sharenet.co.za Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.
