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ASPEN PHARMACARE HOLDINGS LIMITED - Divestment of Aspens European Thrombosis Business to Mylan and Withdrawal of Cautionary

Release Date: 08/09/2020 08:00
Code(s): APN     PDF:  
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Divestment of Aspen’s European Thrombosis Business to Mylan and Withdrawal of Cautionary

(Incorporated in the Republic of South Africa) (“Aspen Holdings”)
Registration number: 1985/002935/06
Share code: APN
ISIN: ZAE000066692
and its subsidiaries (collectively “Aspen” or “the Group”)


Following the release of a cautionary announcement on 24 August 2020, Aspen is pleased to announce that,
Aspen Global Incorporated (“AGI”), its wholly owned subsidiary incorporated in Mauritius, has concluded an
agreement in terms of which Mylan Ireland Limited (“Mylan”) will acquire the commercialisation rights and
related intellectual property relating to Aspen’s Thrombosis Business in Europe 1 (the “Assets”) for a purchase
consideration of EUR 641.9 million, plus the cost of the related inventory (the “Transaction”). AGI’s
thrombosis products (the “Products”) are sold under the brand names, and variations of the brand names,
Arixtra, Fraxiparine, Mono-Embolex and Orgaran in Europe. Mylan has retained AGI (via its subsidiary, Aspen
France SAS, “Aspen France”) as its distributor of the Products in France.

The Transaction will be conditional upon the fulfilment of customary conditions precedent applicable to
transactions of this nature. It is anticipated that the Transaction will complete before 31 December 2020.

Mylan is a global pharmaceutical company, with principal offices in Canonsburg, Pennsylvania, United States
of America. Mylan has a significant presence in Europe, generating sales of over USD 4 billion in 2019.

Transaction details

The disposal of the Assets comprises the following elements relating exclusively to the Products in Europe:

    -    intellectual property required for their commercialisation, and any related goodwill owned by AGI
         and its subsidiaries2;
    -    product registrations and marketing authorisations; and
    -    the related inventory3.

The purchase consideration payable by Mylan for the Assets, other than the inventory, of EUR 641.9 million
is structured as follows:

    -    Upfront cash consideration upon completion:                                     EUR 263.2 million
    -    Deferred cash consideration payable on 25 June 2021:                            EUR 378.7 million

The proceeds from the Transaction will be used to reduce the Group’s debt.

The transfer to Mylan of employees engaged in the Thrombosis Business will take place in accordance with
European labour law regulations.

Contemporaneously with the Transaction, Aspen and Mylan will enter into a Manufacturing and Supply
Agreement (the “MSA”) in terms of which Aspen will supply Products to Mylan for the Territory.

Financial information in respect of the Transaction

The Assets contributed approximately ZAR 1.91 billion4,5 in revenue, ZAR 0.53 billion5 in operating profit and
ZAR 0.45 billion5 in profit after tax6 to the Group for the six months ended 31 December 2019. The Net Asset
Value of the Assets was approximately ZAR 9.25 billion7 as at 31 December 2019. It is expected that the net
proceeds from the Transaction will not vary materially from the Net Asset Value of the Assets at time of
completion of the Transaction.


In March 2019, Aspen announced that it would undertake a strategic review in respect of its Europe CIS
Commercial business (“the Business”). The review has focused on assessing alternative models for the
conduct of the Business and in determining the range of available options with a view to optimising the
Group’s sustainable returns. In line with the objectives of the strategic review, Aspen is of the view that the
disposal of the commercialisation rights to the Products while continuing to manufacture and supply the
Products is an attractive option for the following reasons:

     •    the Transaction supports Aspen’s strategy of continuing to reshape the Group towards a greater
          concentration of revenue in Emerging Markets (“EMs”) – the Thrombosis business that Aspen will
          retain is almost exclusively in EMs and well supported by strong sales representation;
     •    the disposal will allow Aspen to achieve a more streamlined Business in Europe;
     •    in terms of the MSA, Aspen will continue to manufacture and supply the Products, contributing its
          significant expertise in the production of sterile injectables;
     •    the positive cash inflow from the proceeds of the disposal will allow Aspen to further strengthen its
          balance sheet and assist in establishing financial headroom for future investments; and
     •    Mylan represents the ideal partner to acquire these assets given the company’s strength in Europe,
          commitment to the injectables and biosimilars space and comparable employee-first culture and

Categorisation of the Transaction and Withdrawal of Cautionary

In terms of the JSE Limited Listings Requirements the Transaction is categorised as a Category 2 transaction.
This cautionary, as issued by Aspen on 24 August 2020, is hereby withdrawn.

1 Excludes Russia and the other Commonwealth of Independent States countries
2 Excluding certain goodwill relating to distribution of the Products in France
3 Excluding inventory in France where Aspen France will continue to distribute the Products
4 Includes revenue in France of ZAR 0.36 billion related to the Products that Aspen will continue to distribute and recognise the revenue
5 Aspen  average exchange rate for the six months ended 31 December 2019 was ZAR16.30 to 1 EUR
6 Profit after tax excludes any notional saving in interest paid arising from the repayment of borrowings with the net proceeds from
the Transaction
7 Aspen closing exchange rate as at the 31 December 2019 was ZAR15.69 to 1 EUR

8 September 2020

Investec Bank Limited

Date: 08-09-2020 08:00:00
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