Divestment of Aspen’s Japanese operations ASPEN PHARMACARE HOLDINGS LIMITED (Incorporated in the Republic of South Africa) (“Aspen Holdings”) Registration number: 1985/002935/06 Share code: APN ISIN: ZAE000066692 LEI: 635400ZYSN1IRD5QWQ94 and its subsidiaries (collectively “Aspen” or “the Group”) DIVESTMENT OF ASPEN’S JAPANESE OPERATIONS Aspen is pleased to announce that its wholly owned subsidiary, Aspen Global Incorporated (“AGI”), which is incorporated in Mauritius, has concluded an agreement to divest of its Japanese operations and any related intellectual property to Sandoz, a Novartis Division, for a cash consideration of up to EUR 400 million (“the Transaction”). Sandoz is a multinational pharmaceutical company and global leader in generic and biosimilar medicines, headquartered in Holzkirchen, Germany. Additionally, AGI has entered into a five year Manufacturing and Supply Agreement with Sandoz (with an additional two year extension option at the election of Sandoz), which will take effect from completion of the transaction, for the supply of active pharmaceutical ingredients, semi-finished and finished products related to the portfolio of divested brands. In terms of the Transaction, the disposal of Aspen’s Japanese operations comprises of the following elements: - Intellectual property and any related goodwill owned by AGI; and - Transfer of all of AGI’s shares in Aspen Japan K.K (“AJKK”) (a wholly owned subsidiary of AGI) to Sandoz. Proceeds The payment of the purchase consideration in terms of the Transaction has been structured as follows: - Upfront cash consideration upon completion : EUR 300 million (Note 1) - Deferred conditional consideration: EUR 100 million (Note 2) - Note 1: The upfront cash consideration is subject to customary adjustments for net cash/debt and working capital in AJKK on completion; - Note 2: The deferred conditional consideration relates to milestone payments to be made to AGI contingent upon achieving certain supply criteria and licensing opportunities. It is expected that all milestone payments will have been received by 31 December 2023. The proceeds from the Transaction will be used to reduce debt. Conditions precedent and completion The Transaction is conditional upon the fulfilment of the customary conditions precedent applicable to transactions of this nature, the more material of which are: - Consent of lenders in terms of Aspen’s syndicated debt facilities; and - Anti-Trust approval from the Japan Fair Trade Commission. It is anticipated that the Transaction will complete during the first half of calendar year 2020 (the second half of Aspen’s 2020 financial year). Rationale The Transaction is consistent with the Group’s strategic intent to focus on its core pharmaceuticals business in markets where it has sufficient scale and where there is alignment between its business model and the relevant market dynamics. While Aspen’s current portfolio and operational platform in Japan do not provide sufficient scale and leverage in this market, it is believed that this business’ current strong management, dedicated staff, specialty portfolio and commercial platform will present an excellent opportunity once combined with Sandoz’s Japanese portfolio and product pipeline. Financial information Aspen’s Japanese operations contributed ZAR 2.1 billion (EUR 130 million*) in revenue and ZAR 0.4 billion (EUR 24 million*) in normalised EBITDA to the Group for the year ended 30 June 2019. The Net Asset Value of the Japanese operations was approximately ZAR 4.8 billion (EUR 298 million**) as at 30 June 2019. Categorisation of the Transaction The Transaction is categorized as a Category 2 transaction in terms of the JSE Limited Listings Requirements. *Converted at Aspen average exchange for the year ended 30 June 2019 of ZAR16.19 to EUR **Converted at Aspen closing rate as at the 30 June 2019 of ZAR16.02 to EUR Durban 11 November 2019 Sponsor Investec Bank Limited Date: 11/11/2019 08:00:00 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.