Germany's Fresenius to buy US injectables group APP for up to $4.6 billion

13 July 2008

German dialysis and home medical care specialist Fresenius has entered into a definitive merger agreement to acquire US hospital-based injectable drug products firm APP Pharmaceuticals in a deal that will cost the Bad Homburg-headquartered company at least $3.7 billion.

Under the terms of the accord, Fresenius will acquire the outstanding common stock of APP for $23.00 in cash per share plus a contingent value right (CVR) that could deliver up to an additional $970.0 million, or $6.00 per share in cash, if the financial results of the US group meet certain targets (payable in second-quarter 2011). The offer represents a premium of 29% and 63%, respectively, over APP's closing stock price on July 3.

Based on $23.00 a share price, the transaction values the fully-diluted equity capital of APP at around $3.7 billion; and with the CVR, if fully realized, at $4.6 billion. Fresenius will also assume all of APP's outstanding debt which currently totals approximately $940.0 million, net of cash. In aggregate the consideration for the acquisition of APP, including the CVR, could be up to $5.6 billion, the German firm points out.

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