Alliance Pharma acquires Healthcare Products from Sinclair IS Pharma plc

The Board of Alliance Pharma plc ("Alliance" or the "Company"), the specialty pharmaceutical company, has announced that it has entered into an agreement with Sinclair IS Pharma plc ("Sinclair") to acquire certain assets and businesses principally focused on dermatology (the "Healthcare Products Business") for a consideration of £127.5 million, plus an estimated £4.7 million for inventory, to be satisfied partly in cash, funded by way of the New Loans, and partly by the issue and allotment of the Vendor Consideration Shares pursuant to the terms of the Acquisition Agreement.

The Transaction highlights include:

- Alliance to acquire 27 products including five key growth brands (Kelo-Cote™, Flammacerium™, Aloclair™, Kelo-stretch™ and Atopiclair™). The acquisition of these complementary assets will materially increase the scale of the business.

- The Acquisition will significantly increase the Company's footprint outside of the UK and will provide an enhanced platform for further corporate development.

- In the 12 months ended 30 June 2015, the Healthcare Products Business generated revenues of £43.3 million and EBITDA before exceptional items of £9.0 million. It is estimated that cost-saving synergies of approximately £5.0 million will be achievable from the 12 months ending 31 December 2016.

- The Directors believe that, taking into account the business and prospects of the Enlarged Group, the Acquisition will be significantly accretive to earnings per share on an adjusted basis for the 12 months ending 31 December 2016.

- The Directors further believe that the return on invested capital associated with the Acquisition will exceed the Group's weighted average cost of capital in the 12 months ending 31 December 2017 (assuming a weighted average cost of capital of eight per cent.).

- The Acquisition and associated expenses will be financed by a fully underwritten vendor placing raising gross proceeds of £78.5 million and by £54.2 million to be drawn down under the New Loans.

- The vendor placing will comprise the issue of 191,463,414 new Ordinary Shares at a price of 41 pence per share, a discount of approximately 19.6 per cent. to the closing mid-market price of 51 pence per ordinary share on 25 November 2015.

John Dawson, Chief Executive of Alliance, commented:

"This Acquisition represents a very significant development for Alliance. On completion, Alliance will be a significantly larger business with synergies in existing markets. Having over half of our business outside of the UK, we will have a greater ability to compete for international deals and in-licensing opportunities."

Alliance Pharma plc

Alliance Pharma plc
Legacy pharmaceutical products

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