Oss, Netherlands – JSE Limited listed Aspen Holdings is pleased to announce that the Aspen Group (“Aspen”), the ninth largest generic pharmaceutical company in the world, has:
(collectively “the Transaction”)
Stephen Saad, Aspen Group Chief Executive, said “One of Aspen’s primary strategic intents is to further globalise its business, increase its representation across a number of additional territories and provide support to its growing global presence with a differentiated pipeline. This Transaction provides a platform to contribute to the achievement of this strategic intent by enabling Aspen to access a niche range of APIs and finished dosage products.”
The Transaction, which is subject to conditions precedent, is valued at approximately US$1 billion (ZAR10.06 billion at ZAR10.06/US$) and comprises the following elements:
Aspen Global Incorporated, a wholly owned subsidiary of Aspen Holdings, has the option to acquire the Products by way of the exercise of a call option with a resulting asset purchase for a consideration of US$600 million.
The effective date of the API Business acquisition is expected to be 1 October 2013 while the expected effective date of the Products acquisition through the exercise of the option is 31 December 2013.
The Transaction, other than certain deferred payments for the MSD inventory and the Products, will be funded from new debt facilities which are at an advanced stage of negotiation. It is planned to fund the deferred payments from Aspen’s existing cash at the time payment is due.
The API Business consists of manufacturing operations within existing MSD sites comprised as follows:
The business also has sales offices at the Oss site in the Netherlands and in Des Plaines, Illinois, in the US.
The products manufactured at the sites fall into two categories, namely biochemicals, where biological processes are involved, and chemicals where the process is fully synthetic. The API Business recorded pro-forma revenue of €284 million in the year ended 31 December 2012.
The Products comprise a portfolio of 11 branded finished dosage form molecules, covering a diverse range of therapeutic treatments. The main brands being acquired, by therapeutic area, are:
|Hormone replacement therapy||Ovestin, Sustanon, Metrigen|
|Cortico-Steroid||Decadron, Oradexon, Metricorten, Meticortelone|
|Anabolic steroid||Deca Durabolin|
|Oral Contraceptives||Gracial, Novial|
|Vitamin B Complex||Benutrex|
MSD reports that the products which are the subject of the transactions recorded revenue of US$ 248 million in its financial year ended 31 December 2012. More than half of this revenue was generated in Aspen’s key strategic regions of Latin America and Asia Pacific with Europe being the other large territory.
The Products will be initially manufactured under the pre-existing MSD manufacturing arrangements in terms of a medium term supply agreement between Aspen Global Incorporated and MSD.
The following considerations support the rationale for the Transaction: