Ascendis Health has announced that its R1.2 billion rights issue, which closed last week, has been more than three times oversubscribed. The company has also secured the required funding to conclude its recent R7.3 billion acquisitions of global pharma company, Remedica and European sports nutrition company, Scitec.
Notwithstanding the conclusion of a successful rights offer to fund the deals, Ascendis secured additional irrevocable undertakings from existing and new strategic shareholders to the total value of R2.3 billion at the time of the release of the circular. It then entered into an underwriting agreement with Absa Bank and HSBC Bank to fully underwrite the rights offer.
This underwriting of the rights offer was however not required as the 54 million rights offer shares were snapped up by supportive shareholders. Additional support, via the irrevocable undertakings, was received from a mix of local and several international investors, including the International Finance Corporation, a division of the World Bank.
Ascendis CEO, Dr Karsten Wellner, comments: ‘This overwhelming support from the local and international investment community is extremely encouraging, and a continuing vote of confidence for our proposition, delivery and focussed globalisation strategy.’
Expanded product offerings and organic growth
Remedica is a specialist generics pharmaceutical company with a presence in over 100 countries and a major supplier of pharmaceuticals to non-governmental organisations active in medical relief. Scitec is a leading European sports nutrition company that sells its products in nearly 90 countries globally. The products and distribution networks offered by these companies (including the Spanish pharma company Farmalider, which was acquired during 2015) complement each other, making it possible for the combined group to offer a broader range of health products, while at the same time driving the organic growth synergies.
It is expected that the transactions will be concluded by the beginning of September, and will boost Ascendis’ current market cap from R7.3 billion to more than R10 billion, supporting the vision of becoming a leading global player in the health and care sector.
Dr Wellner concludes: ‘We are extremely grateful to Absa and HSBC, our equity partners and the management of Remedica and Scitec, not to mention the outstanding deal team from Coast2Coast for their great support in securing these transformative deals. A rights issue which is significantly oversubscribed is surely an indication of the trust the market has in Ascendis, its management and its growth strategies.’