Johannesburg – JSE Limited listed Aspen Pharmacare Holdings Limited (APN), a leading global pharmaceutical company, has announced today, in conjunction with the announcement of its annual results for the year ended 30 June 2018, that it has concluded an agreement to divest of its global Nutritional Business to the Lactalis Group Stephen Saad, Aspen Group Chief Executive said, “We are pleased to announce that an agreement has been signed to divest of our Nutritionals Business to French-based Lactalis Group, a leading multinational dairy corporation, for Euro 740 million (R12.9 billion at current exchange rates). The disposal is in line with our strategic intention to focus our attention on our core pharmaceutical business which includes the Anaesthetics, Thrombosis and High Potency & Cytotoxic portfolios. The heightened focus is expected to drive increased business efficiency and performance.” “This year we celebrate 20 years since we listed on the JSE. Over the past two decades we have evolved from being a domestic generics player to a global multi-national focusing on specialised niche products that are complex to manufacture. Generic products contribute less than 15% to the Group’s pharma revenue today and our strategic focus is on building our specialty portfolio.” DIVESTMENT OF GLOBAL NUTRITIONALS BUSINESS TO LACTALIS FOR EUR 739.8 MILLION With reference to Aspen’s earlier announcement wherein it advised that it had undertaken a strategic review of its Global Nutritionals Business predominantly carried on in Latin America, Sub-Saharan Africa and Asia Pacific under the S-26, Alula and Infacare brands (“Nutritionals Business”), Aspen is pleased to announce that it has concluded an agreement to divest of its Nutritionals Business to the Lactalis Group, a leading multinational dairy corporation based in Laval, France, for a fully funded cash consideration of EUR 739.8 million / R12.9 billion (translated at ZAR17.4/EUR) (“the Transaction”). The Lactalis Group is a privately owned, global leader in the dairy industry with revenue of EUR 18.4 billion, sales in over 200 countries, approximately 80 000 employees and 246 industrial plants in 47 different countries. Lactalis’ strategic intent is to develop a global infant nutritional business to complement their existing global product range. The transaction is considered to be a compelling opportunity for both the transferring Aspen employees as well as the shareholders of both Aspen and Lactalis. In terms of the Transaction, the disposal of the Nutritionals Business will comprise the following elements: Intellectual property and any related goodwill presently owned by: Aspen Holdings and Pharmacare Limited in respect of the South African and Sub-Saharan Africa Nutritionals Businesses; and Aspen Global Incorporated in respect of the Latin American and Asia Pacific Nutritionals Businesses; Tangible assets (including plant, leased immovable property, equipment, associated fixed assets and inventory) presently owned by various Aspen Group companies in respect of the South African, Sub- Saharan Africa and Latin American Nutritionals Businesses; Product registrations and retail registrations regarding Aspen’s nutritional products; Shares in companies conducting Aspen’s Nutritional Business across Asia Pacific (including the acquisition of shares held by joint venture partners in New Zealand and Hong Kong); and Transfer of dedicated Nutritionals staff employed within each of the geographical regions. Rationale Aspen’s disposal of the Nutritionals Business will allow the Aspen business units in Asia Pacific, Latin America and Sub-Saharan Africa to dedicate all of their time and attention to their core pharmaceutical businesses. This heightened focus is expected to drive increased business efficiency and performance. Aspen believes that Lactalis’ entrepreneurial spirit and commitment to develop a leading global position in infant nutrition will provide the Nutritional Business and the transferring Aspen employees with exciting future opportunities for growth and development. Financial information The Global Nutritional Business contributed ZAR 3.091 billion to Group revenue and ZAR 512 million to Group segmental contribution profit for the year ended 30 June 2018. The proceeds of EUR 739.8 million will be reduced by approximately EUR 62 million which will be utilised to buy-out Aspen’s joint venture partners in New Zealand and China. The balance of the proceeds from the Transaction, after costs and taxes, will be utilised to reduce Aspen’s gearing, creating greater headroom and capacity. Conditions precedent and completion The Transaction is conditional upon the fulfilment of a number of conditions precedent, the more material of which are the following: Approval by the Mexican and South African Competition/Anti-Trust authorities; South African Reserve Bank approval to the extent required under the Exchange Control Regulations; New Zealand and Australian foreign investment approvals to the extent required; Signature by Aspen and Lactalis of implementation agreements, including certain regional asset purchase and share purchase agreements with the various Aspen subsidiaries; and Signature or renewal of certain transitional service and other incidental agreements, some of which are with third parties. It is anticipated that the Transaction will complete within the next 6 months. Categorisation of the Transaction The Transaction is categorised as a Category 2 transaction in terms of the JSE Limited Listings Requirements. Withdrawal of Cautionary Announcement Aspen has advised shareholders that following the release of the full details of the divestment of the Nutritionals Business, shareholders no longer need to exercise caution when dealing in their Aspen securities in this regard. GROUP PERFORMANCE FOR THE YEAR ENDED 30 JUNE 2018 Revenue increased by 3% to R42.6 billion. Normalised headline earnings per share (“NHEPS”) rose by 10% to 1604.9 cents. Normalised EBITDA increased by 5% to R12.0 billion. Earnings per share grew by 17% to 1316.6 cents. Headline earnings per share increased by 13% to 1468.8 cents. Operating cash flow per share increased by 8% to 1537.3 cents. Distribution to shareholders per share increased by 10% to 315.0 cents. Lower earnings in the second half of the year than in the first half were primarily influenced by the unfavourable impact of the strengthened ZAR. At constant exchange rates (“CER”), revenue in the second half of the financial year was in line with that of the first half. However, the stronger ZAR in the second half resulted in ZAR reported second half revenue being lower by R1.3 billion. Significant factors influencing performance… Continue reading Aspen’s revenue increases to R42.6 billion
