Release Date: 16/08/2010 08:05:02 Code(s): APN APN - Aspen...

Release Date: 16/08/2010 08:05:02 Code(s): APN
APN - Aspen Pharmacare Holdings Limited - Announcement regarding the acquisition
of the Pharmaceutical business of Sigma Pharmaceuticals Limited("SIGMA") By
Aspen
ASPEN PHARMACARE HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1985/002935/06)
Share code: APN ISIN: ZAE000066692
("Aspen
ANNOUNCEMENT REGARDING THE ACQUISITION OF THE PHARMACEUTICAL BUSINESS OF SIGMA
PHARMACEUTICALS LIMITED ("SIGMA") BY ASPEN
1 INTRODUCTION
Aspen shareholders are referred to the detailed cautionary announcement
released on the Securities Exchange News Service of the JSE Limited
("SENS") on 21 May 2010, and to the related renewal and further cautionary
announcements dated 7 July 2010 and 12 July 2010, respectively ("Cautionary
Announcements"). Subsequent to the completion by Aspen of the due diligence
process referred to in the Cautionary Announcements, Aspen Global
Incorporated ("Aspen Global"), a 100% owned subsidiary of Aspen, submitted,
to the Board of Directors of Sigma ("Sigma Board"), an offer ("Subsequent
Offer") to acquire the pharmaceutical business conducted by Sigma
("Pharmaceutical Business") on a debt-free basis for a cash consideration
of A$900 million (approximately ZAR5 871 million(1)). The Subsequent Offer,
which the Sigma Board has undertaken to support, is subject to limited
conditions precedent as detailed in paragraph 4.4 below.

(1)Based on AUD/ZAR exchange rate of 0.1533 as at 13 August 2010 (Source:
Bloomberg).
2 DESCRIPTION OF SIGMA AND THE BUSINESS
Sigma is a leading Australian Securities Exchange ("ASX") listed Australian
manufacturer and marketer of prescription, over-the-counter ("OTC") and
generic pharmaceutical products as well as a wholesale distributor of
pharmaceutical and consumer products.
The Pharmaceutical Business consists of the manufacture and marketing of
pharmaceutical products. It has an extensive product portfolio comprising
many well-known and trusted Australian brands which recorded sales revenue
of A$671 million in the year to 31 January 2010. The generics range has
approximately a 25% share of the growing Australian generics sector. The
Pharmaceutical Business is also Australia`s largest pharmaceutical
manufacturer.
For further details on the Pharmaceutical Business, Aspen shareholders are
referred to www.sigmaco.com.au.
3 RATIONALE FOR THE SUBSEQUENT OFFER

Aspen has an existing operation in Australia ("Aspen Australia"), marketing
and distributing pharmaceutical and consumer products. Established in
2001, Aspen Australia has an excellent record of growth with revenue of
approximately A$180million recorded in the year to 30 June 2010. Aspen
Australia`s success has been achieved by sound management supported by an
outstanding team which has consistently built Aspen`s product offering and
reputation in Australia. The implementation of the Subsequent Offer
creates the following opportunities:
* Synergies arising out of the consolidation of Aspen Australia and the
Pharmaceutical Business;
* An established point of entry to the Australian generics and OTC
sectors for the introduction of Aspen`s pipeline of generic and OTC
products;
* Strengthening Aspen`s position in the Australian market which will
form the foundation for further development of Aspen`s business in the
Asia Pacific region; and
* Incorporation of Australian manufacturing presence into Aspen`s global
manufacturing capabilities.

Aspen Global`s initial approach to Sigma referred to in the Cautionary
Announcements was for the acquisition of the entire business of Sigma,
including the wholesale business. The Subsequent Offer means that Sigma
will continue as an ASX listed company focused on the wholesaling business.
The construction of the Subsequent Offer was framed after lengthy
engagement with Sigma and recognizes that Sigma possesses the critical
skills to optimize the performance of the wholesaling business, an activity
in which Aspen does not have past experience. Furthermore, the
consideration received by Sigma for the Pharmaceutical Business will allow
it to establish a firm capital base from which to ensure an efficient
business model. In recognition of this, the Pharmaceutical Business will
commit to a long term supply, distribution and logistics arrangement with
Sigma.
4 DETAILS OF THE SUBSEQUENT OFFER
4.1 Terms of the Subsequent Offer
In terms of the Subsequent Offer, Aspen Global, or an entity nominated
by Aspen Global, will acquire the Pharmaceutical Business, by
acquiring either the business conducted by the Pharmaceutical Business
or the shares in the subsidiaries of Sigma that carry on the
Pharmaceutical Business and/or hold assets of the Pharmaceutical
Business, or a combination of the aforementioned, for a cash
consideration of A$900 million (approximately ZAR5 871 million1) on a
debt-free basis.
In terms of the Subsequent Offer, Sigma, which has agreed to deal
exclusively with Aspen until 15 October 2010, will also accept a non-
compete clause with the Pharmaceutical Business for a period of two
years.
4.2 Funding
The Subsequent Offer will be funded out of Aspen`s available cash
resources as well as cash to be raised from its bankers.
4.3 Effective date

The effective date of the implementation of the Subsequent Offer will
be upon completion of the conditions precedent.
4.4 Conditions precedent
The completion of the Subsequent Offer is subject to the satisfactory
conclusion of limited conditions precedent which are normal for a
transaction of this nature, including:
* conclusion of a Business and/or Share Purchase Agreement between Aspen
and Sigma;
* all requisite regulatory approvals; and
* the approval of Sigma shareholders.
5 PRO FORMA FINANCIAL EFFECTS
The unaudited pro-forma financial effects set out in the table below have
been prepared to assist Aspen shareholders to assess the impact of the
Subsequent Offer on the earnings per share ("EPS") and headline EPS
("HEPS") for the 6 months ended 31 December 2009, and the net asset value
("NAV") per Aspen ordinary share as at 31 December 2009. The pro-forma
financial effects have been prepared for illustrative purposes only and
because of their nature, may not fairly present the effects of the
Subsequent Offer on Aspen`s results of operations for the 6 months ended
and the financial position at 31 December 2009. The Pharmaceutical Business
results used are for the 6 months ended 31 January 2010.
The Directors of Aspen are responsible for the preparation of the financial
effects, which have not been reviewed by the auditors.
Pre-adjustment
For the six months ended 31 Post-adjustment
December 2009 For the six months ended
31 December 2009
Actual Pro- % Actual Pro- %
"Before" forma Chang "Before" forma Change2
(cents) "After" e2 (cents) "After"
(1,3,8) the (1,3,8) the
Subseque Subsequ
nt Offer ent
(1,2,4,6 Offer
,7) (1,2,5,
(cents) 6,7)
(cents)
EPS 240.58 (134.36) (155. 240.58 252.54 5.0
8)
HEPS 242.32 (132.61) (154. 242.32 254.28 4.9
7)
NAV 2,192.98 2,192.98 0.0 2,192.98 2,192.9 0.0
8
Notes:
1 Extracted from the published unaudited financial results of Aspen
for the six months ended 31 December 2009.
2 The "After" columns represent the effects after the Subsequent
Offer. The "% Change" columns compares the "After" columns to the
"Before" columns.
3 It has been assumed for the purposes of the pro-forma financial
effects that the Subsequent Offer took place with effect from 1
July 2009 for EPS and HEPS purposes, and at 31 December 2009 for
balance sheet purposes.
4 The Pre-adjustment financial information for the Pharmaceutical
Business for the six months ended 31 January 2010 as reported by
Sigma and adjusted for interest expense to reflect that the
Pharmaceutical Business will be acquired on a debt-free basis.
5 The Post-adjustment financial information for the Pharmaceutical
Business was calculated after reversing once-off income statement
items of R1 537 million (A$230million) from the Pre-adjustment
financial information as reported by Sigma and adjusted for
interest expense to reflect that the Pharmaceutical Business will
be acquired on a debt-free basis.
6 The average AUD/ZAR exchange rate for the 6 months ended 31
January 2010 of 0.14938 was used to translate the earnings and
headline earnings of the Pharmaceutical Business into ZAR. The
spot AUD/ZAR exchange rate as at 31 January 2010 of 0.14940 was
used to translate the NAV of the Pharmaceutical Business.
7 A notional interest charge at a pre-tax rate of interest of 9.6%
on the value of the Subsequent Offer has been included in the
financial effects.
8 The number of Aspen shares in issue of 431.591 million at 31
December 2009, and the weighted average number of Aspen shares of
367.037 million for the 6 months ended 31 December 2009, have
been stated net of treasury shares.
9 Sigma did not separately disclose the value of Tangible Net Asset
Value for the Pharmaceutical Business at 31 January 2010.
Accordingly, the effects of the Subsequent Offer on the Tangible
Net Asset Value per Aspen share have not been separately
disclosed.
6 CATEGORISATION AND WITHDRAWAL OF CAUTIONARY
An announcement has been released today in terms of the ASX regulations by
Sigma and is available at the ASX website at www.ASX.com.au.
The Subsequent Offer has been classified as a category 2 transaction in
terms of section 9.5(a) of the JSE Limited Listings Requirements. The
cautionary announcement dated 12 July 2010 is hereby withdrawn.
Accordingly, Aspen shareholders are no longer required to exercise caution
when dealing in Aspen shares.
Woodmead
16 August 2010
Investment Bank and Sponsor to Aspen
Investec Bank Limited
(Registration number 1969/004763/06) and Investec Bank (Australia) Limited
Date: 16/08/2010 08:05:02 Supplied by www.sharenet.co.za
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