from neutral to add

12 MONTH VIEW Sigma Pharmaceuticals (SIP) - from NEUTRAL to ADD LONG TERM VIEW Sigma Pharmaceuticals (SIP) - from NEUTRAL to ADD

$297M raising and makes $60M acquisition...we upgrade to ADD 08-Sep-09 18:21 SIP is undertaking a fully underwritten, 1 for 3, accelerated, renounceable, pro-rata entitlement offer, priced at $1.02, to raise $297M. SIP will also pay $60M to acquire an established brand portfolio and manufacturing facility from Bristol-Myers Squibb (BMS).

The BMS acquisition is a nice bolt-on deal for SIP and the new equity significantly improves interest cover, decreasing company risk. Our 12 month target price increases by 21%. We upgrade SIP to ST and LT ADD.