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
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
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).
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.
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
*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
11 November 2019
Investec Bank Limited
Date: 11/11/2019 08:00:00
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