DGAP-Adhoc: Fresenius SE: Fresenius Kabi to acquire APP Pharmaceuticals

Fresenius SE / Acquisition

07.07.2008 

Release of a Adhoc News, transmitted by DGAP - a company of EquityStory AG.
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Fresenius Kabi to acquire APP Pharmaceuticals – entry into North American
I.V. generics market provides excellent growth opportunities

Fresenius Kabi, a business segment of the health care group Fresenius, has
signed definitive agreements to acquire APP Pharmaceuticals, Inc. APP is a
leading manufacturer of intravenously administered generic drugs (I.V.
generics) in North America. The company is listed on the NASDAQ Stock
Market.

APP shareholders will receive a Cash Purchase Price of US$ 23.00 per share
and a registered and tradeable Contingent Value Right (CVR) that could
deliver up to US$ 6.00 per share, payable in 2011, if APP exceeds a
cumulative adjusted EBITDA target for 2008 to 2010.

Based on the Cash Purchase Price, the transaction values the fully diluted
equity capital of APP at approximately US$ 3.7 billion. Fresenius expects
the acquisition to be neutral to EPS in the first year and clearly
accretive from the second year onwards.

The acquisition is an important step in Fresenius Kabi’s growth strategy.
Through the acquisition of APP, Fresenius Kabi enters the U.S.
pharmaceuticals market and achieves a leading position in the global I.V.
generics market. This North American platform provides further attractive
growth opportunities for Fresenius Kabi’s existing product portfolio.

APP focuses on I.V. generics for hospital use and distributes its products
in the U.S. and Canada. The company employs around 1,400 people and has
state-of-the-art production facilities in Illinois, New York and Puerto
Rico as well as a subsidiary in Toronto, Canada.

With a portfolio of more than 100 products, comprising drugs for oncology,
intensive care, anaesthesia, analgesia as well as drugs for the treatment
of infections, APP holds an important position in the North American
hospital market. The company has a strong drug registration pipeline
covering all of its product segments.

In 2007, APP achieved sales of US$ 647 million and an adjusted EBITDA of
US$ 253 million. The company’s latest published guidance for 2008 forcasts
sales in a range of US$ 730 million to US$ 750 million and an adjusted
EBITDA in a range of US$ 285 million to US$ 300 million.

As part of this transaction APP will merge with a U.S. subsidiary of
Fresenius Kabi. The definitive agreements include a written consent and
voting agreement with Dr. Patrick Soon-Shiong, APP’s founder and
shareholder of over 80 % of the outstanding stock. The transaction has been
approved by APP’s Board of Directors.

Following the closing of the transaction, Patrick Soon-Shiong will serve as
a non-executive director on the Board of Fresenius Kabi’s U.S. holding
company. In this role, he will continue to contribute to the company’s
strategic development.

It is planned to finance the acquisition with a mix of debt and equity,
targeted to minimize the impact on Fresenius SE’s credit ratings. However,
given Fresenius’ rapid progress in de-levering since 2006, the largest
portion of the financing will consist of debt instruments.

Financing commitments for the total amount have been received from Deutsche
Bank, Credit Suisse and JP Morgan. Details of the financing plan will be
published in the coming weeks. Deutsche Bank acts as Global Coordinator of
the financing and as sole M&A advisor to Fresenius.

The transaction is subject to certain closing conditions, including
regulatory approvals, and approvals under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. Fresenius anticipates closing the transaction at
the end of 2008 or beginning of 2009.

EPS: before one-time transaction-related depreciation charges and assuming
a 2008 closing.

Adjusted EBITDA: EBITDA before one-time expenses and stock-option expenses,
as published by APP in Form 8-K, March 10, 2008, as of Dec 31, 2007.


The Management Board
Bad Homburg v.d.H., July 7, 2008

End of note
DGAP 07.07.2008 
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Language:     English
Issuer:       Fresenius SE
              Else-Kröner-Straße 1
              61352 Bad Homburg v.d.H.
              Deutschland
Phone:        +49 (0)6172 608-2485
Fax:          +49 (0)6172 608-2488
E-mail:       ir-fre@fresenius.com
Internet:     www.fresenius.com
ISIN:         DE0005785638, DE0005785604
WKN:          578563, 578560
Indices:      MDAX
Listed:       Regulierter Markt in Frankfurt (General Standard), München,
              Düsseldorf; Freiverkehr in Berlin, Hamburg, Stuttgart;
              Terminbörse EUREX
End of News                                     DGAP News-Service
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