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Ascendis expands with R7.3bn euro buys

Johannesburg - Ascendis Health [JSE:ASC] is continuing its international growth strategy with the announcement of separate acquisitions of two major European health and care businesses for a total of R7.3bn.

About half of Ascendis’ sales will now be generated by foreign operations and products will be sold in about 144 countries. Founded in 2008 and listed on the JSE since 2013, the group’s strategy is based on organic, acquisitive and synergistic growth locally and internationally.

Remedica Holdings, a pharmaceutical manufacturer based in Cyprus, will be acquired for R4.4bn, including a deferred payment of R1.5bn after three years. Scitec International, a European sports nutrition company, will be acquired for R2.9bn, including a deferred payment of R340m after one year.

“Our strategy is to complement growth in the domestic health and care market through international expansion and by acquiring platform businesses offshore,” CEO Dr Karsten Wellner had explained earlier this year. These acquisitions in the European Union will be game changing for Ascendis, in his view, and position the group as an international health and care business of scale.

Ascendis has secured irrevocable undertakings from certain existing shareholders and new strategic investors to the total value of R2.3bn to participate in the R1.2bn rights offer and the subsequent R1.2bn to R1.5bn vendor consideration placement. Ascendis has also entered into an underwriting agreement with Absa Bank and HSBC Bank to underwrite any rights offer shares not subscribed for pursuant to the rights offer.

READ: Ascendis plays like a good soccer team - CEO

According to Wellner, all conditions precedent to the R1.2bn rights offer have been fulfilled. The JSE has approved the circular to shareholders and the application for the listing of the letters of allocation and the rights offer shares required to implement the rights offer.

"We are also excited that both the rights offer and the vendor consideration placement are well supported by investors in the form of excess irrevocable undertakings provided,” he said.
 
Coast2Coast Capital, which currently directly or indirectly owns about 41% of the issued share capital of Ascendis, has committed to follow its rights under the rights offer, and/or successfully allocate any portion of its rights not taken up under the rights offer pursuant to back-to-back commitments, with the combined value thereof being up to R520m.

“This unequivocal support for the Ascendis business model across all sectors of the investment community is a clear vote of confidence in the growing value that we are adding to local and international shareholders, and confirmation of our prudent business practices to grow Ascendis into a global health and care company,” said Wellner.

Earlier this year, Ascendis also announced it had received Competition Commission approval to proceed with the 100% acquisition of pharmaceutical business Akacia Healthcare for R345m. Akacia manufactures and distributes branded generic prescription, over-the-counter and complementary medicines.

Wellner has explained in the past that the success of Ascendis lies in its strategy of diversification. He admitted that SA is facing difficult times as a country, but is confident that Ascendis' diversified product portfolio, strategy and customer base enable it to stay strong.

ALSO READ: Ascendis buys stake in Spanish drug firm

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