plan for assets sale and share buyback

Going to buy back shares and get a bigger holding of Kedrion:

FOR IMMEDIATE RELEASE
Life Therapeutics Announces Plan for Assets sale and Share Buyback
ATLANTA and SYDNEY – September 18th 2007 Life Therapeutics (ASX: LFE)
today announced that the Board of Directors has resolved to divest the assets
of the company not the subject of the proposed transaction with Kedrion
S.p.A. (“Kedrion”). The assets concerned and the Company’s estimated
valuation of those assets are as follows:
• Anti-D Red Cell Line US$20 million
• Diagnostic Business US$25 million
• Two Plasma Collection Centres US$10 million
Total Estimated Valuation US$55 million
The Diagnostic business generated EBITDA of US$2.7 million on revenue of
US$13.1 million in the year ended 30 June 2007.
The net sale proceeds will be applied as follows:
• An on-market share buyback and share cancellation
• The retirement of certain debt
• To finance the purchase of extra equity in Kedrion
Share buyback and cancellation
It is the view of the Directors that the prevailing share price significantly
undervalues the company. Accordingly, the Board believes that it is
important that funds realised from the sale of assets be returned to
shareholders by way of a share buyback. The extent of the buyback will
relate to the degree to which the shares are undervalued.
The retirement of debt
Allowing for transaction expenses and contingencies, it is expected that
between US$10 – US$20m of company debt will be retired promptly following
the sale of the assets. The balance of company debt will be settled at the
time of the Kedrion IPO, subject to shareholder approval of the Kedrion
transaction.
-- more –
--2 –
The purchase of additional equity in Kedrion
As announced on 30 July 2007, under the terms of the proposed Kedrion
transaction, LFE has the right to purchase up to a 3.5% equity stake in Kedrion
at the time of the IPO, in addition to the 11.5% equity stake received in
consideration for the sale of 14 plasma collection centres.
After payment of initial debt and transaction related expenses as noted
above, the Directors expect that the remaining proceeds, ranging from
US$30 million to US$40 million from the sale will be applied to the share buy
back and the purchase of additional equity in Kedrion. The allocation
between these alternatives will be determined by the Board upon
consideration of the circumstances prevailing at the relevant time.
As noted on 30 July 2007, the IPO of shares in Kedrion and public listing is
expected to occur in 2008. Based on comparable EBITDA multiples and
Kedrion’s business plan, it is estimated that at IPO Kedrion will be valued
around US$850 million (around A$1 billion).
Other comments
Making the announcement today, LFE Chairman Dr Jim Brown said, “This
decision is about returning to shareholders the value which has been built in
these assets over a number of years.
“The Board believes that these assets will represent greater value for a larger
organisation with complementary business streams rather than as a stand
alone business owned by Life Therapeutics. In this way we make possible a
greater return to shareholders than is implicit in the prevailing price of LFE
shares.
“We have resolved to act now in order to maximise the sale proceeds for our
shareholders,” Dr Brown said.
The Board will appoint advisors to assist with the sale process. This process will
continue and is not affected by the proposed Kedrion transaction, which
shareholders will be asked to approve at an Extraordinary General Meeting
to be held in November this year.
About Life Therapeutics
Life Therapeutics is an international company that specializes in niche
therapeutic hyperimmune products. It has 14 operational plasma collection
centers and signed leases for a further 2 centers around the US. The
Company has considerable experience recruiting and collecting hard to find
hyperimmune plasma for IND studies and clinical trials.
-- more –
--3 –
Life Therapeutics has 500 employees, located in the United States and 14
plasma donor centers in eight American States. It has an established U.S.
American Depositary Receipt (ADR) Level I program, which enables trading in
Life Therapeutics shares by U.S. based investors. The company’s divisions are
all headquartered in Atlanta, Georgia.
Life Sera collects both specialty plasma and normal source plasma, including
Anti-D and Hepatitis B from a donor base of more than 5,000 in fourteen
operational U.S. collection centers. The plasma is then sold to blood
fractionators who process it into hyperimmune therapeutic products.
Life Diagnostics provides highly specific diagnostic tests for blood-clotting
disorders and source plasma products for blood-borne diseases.
Technologies include specialized blood coagulation tests to predict the risk of
thrombosis and bleeding disorders. It also collects high-titer source plasma
and serum used to make diagnostic kits.
For more information, visit www.life-therapeutics.com.
Enquiries: Francesca Boase
Porter Novelli
Ph: (02) 8424 8500
Prakash Patel
Company Secretary
Ph: (02) 8977 9000
# # # # #