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AIP - Adcock Ingram Holdings Limited - Acquisition of Nutrilida Adcock Ingram Holdings Limited (Registration number 2007/016236/06) (Incorporated in the Republic of South Africa) Share code: AIP ISIN: ZAE000123436 ("Adcock Ingram" or "the Company") ACQUISITION OF NUTRILIDA 1. Introduction Adcock Ingram today announced the acquisition of the business of Nutrilida Healthcare, ("NutriLida") (the "Transaction"), a vitamin, mineral and supplements ("VMS") business based in Johannesburg, South Africa. The acquisition of Nutrilida will further strengthen Adcock Ingram`s position as the leader in the VMS market and increase its market share in the broader Fast Moving Consumer Goods ("FMCG") market. 2. Nature of business of NutriLida NutriLida was established in 2001 and has become a market leader in several niche categories within the VMS industry. In 2010 NutriLida acquired the well-known Natrodale brand thereby expanding its overall product offering and improving the export potential of its existing product range. NutriLida`s products include: ProbiFlora for general digestive health ViralGuard for immunity ArthroGuard for joint health GynaGuard for intimate feminine care Bestum for everyday health and wellbeing NutriLida achieved turnover of R212 million for the financial year ended 31 December 2010. 3. Rationale NutriLida has strong brands in several niche market segments. It is Adcock Ingram`s intention to continue to grow these brands and leverage its brand building expertise to become a significant player in the South African VMS market. Adcock Ingram has grown its presence in the VMS category in recent years and has a strong presence in the tonics market with household name brands such as Bioplus, Vita-thion and Liviton. The Transaction will strengthen Adcock Ingram`s foothold in this fast growing market and further enable the group`s strategy to gain market share in the FMCG category. 4. Categorisation of Transaction In terms of the JSE Listings Requirements, the Transaction is categorised below the threshold of a category 2 transaction. Adcock Ingram has, however, elected voluntarily to provide to its shareholders certain details of the Transaction. 5. Details of the Transaction The sellers of the business of Nutrilida Healthcare are Nutrilida (Pty) Ltd, Midsummer Assets & Leasing (Pty) Ltd and Zeiss Road Manufacturing (Pty) Ltd ("the sellers"). The effective date of the Transaction will be the last day of the month in which the last of the conditions precedent contemplated in paragraph 6 below is fulfilled, which is anticipated to be no later than 31 July 2011. In terms of the purchase agreement entered into between the sellers and Adcock Ingram the purchase price is confidential. 6. Conditions precedent The Transaction is subject to the fulfilment or waiver, where applicable, of a number of conditions precedent including the unconditional approval by the South African competition authorities. 7. Pro forma financial effects The unaudited pro forma financial effects of the Transaction set out below have been prepared to assist Adcock Ingram shareholders in assessing the impact of the Transaction on the Company`s historical earnings per share ("EPS"), headline earnings per share ("HEPS")and net asset value ("NAV") per share. The pro forma financial effects are the responsibility of the directors of Adcock Ingram and are provided for illustrative purposes only. The pro forma financial effects have been prepared on the basis that the Transaction had been fully implemented on 1 October 2009 for Income Statement purposes and as at 30 September 2010 for purposes of the Statement of Financial Position. It does not purport to be indicative of what the consolidated financial results would have been had the Transaction been implemented on a different date. The material assumptions are set out in the notes following the table. Due to their nature, the pro forma financial effects may not fairly present the financial position, changes of equity, results of operations or cash flows of Adcock Ingram after the Transaction. Before the After the Percentage Transaction(1) Transaction(2) change (%)
,(3) EPS (cents) 363.5 381.3 4.9% HEPS (cents) 363.4 381.1 4.9% NAV per share (cents) 1,678.5 1,678.5 0% Weighted average number of 173,712,465 173,712,465 0% shares in issue* * excludes treasury shares Notes: 1. Extracted from Adcock Ingram`s published audited annual results for the financial year ended 30 September 2010. 2. Based on the estimated purchase price of the Transaction and the sellers audited balance sheets as at 31 December 2010, as if both companies` year ends were coterminous. 3. The effects on NAV per share are based on the following principal assumptions: - the Transaction was effective on 30 September 2010;and - inclusion of once-off costs of R1 million. 4. No charge for amortisation of intangible assets has been included in the pro forma financial effects. The Purchase Price Allocation exercise, as required by IFRS 3: Business Combinations has not yet been performed and therefore any intangible assets acquired, that are determined to have finite useful lives will need to be amortised. Any amortisation charge that may arise from these intangible assets will have the effect of reducing the pro forma EPS and HEPS, as calculated. 5. The pro forma financial effects have been prepared using the same accounting policies as those applied in the most recently published annual financial statements of Adcock Ingram. Midrand 29 March 2011 Sponsor Deutsche Securities (SA) (Proprietary) Limited Date: 29/03/2011 16:49:01 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.
