TERVEYSTALO HEALTHCARE OYJ STOCK EXCHANGE RELEASE 19 January 2009 at 9.35 am PUBLIC TENDER OFFER FOR ALL THE SHARES AND OPTION RIGHTS IN TERVEYSTALO HEALTHCARE OYJ Terveystalo Healthcare Oyj and Star Healthcare Oy have today (19 January, 2009) entered into a Transaction Agreement whereby Star Healthcare will make a public tender offer to purchase all of the issued and outstanding shares that are not owned by Terveystalo and option rights in Terveystalo. - The price offered in the Tender Offer will be EUR 2.00 per share in cash, representing a premium of 203.0 per cent compared to the closing price of the Terveystalo shares on NASDAQ OMX Helsinki Ltd. on 16 January 2009, the last trading day preceding this announcement. - Terveystalo shareholders representing in total approximately 51.8 per cent of the shares and votes in Terveystalo, including Mutual Pension Insurance Companies Ilmarinen and Varma, other major insurance companies and certain Board members, the Managing Director and certain members of the management team of Terveystalo, have undertaken irrevocably and unconditionally to accept the Tender Offer. - The Board of Directors of Terveystalo unanimously recommends the shareholders and holders of option rights to accept the Tender Offer. - The acceptance period of the Tender Offer is expected to commence on 26 January 2009 and to run until 16 February 2009. STAR HEALTHCARE OY TO LAUNCH A RECOMMENDED CASH TENDER OFFER FOR ALL THE SHARES AND OPTION RIGHTS IN TERVEYSTALO HEALTHCARE OYJ Star Healthcare is a newly incorporated Finnish limited liability company ultimately owned by Bridgepoint Europe IV, the latest fund of the European private equity manager Bridgepoint. - Terveystalo has since its foundation in 2001 quickly reached its goal to become the largest private healthcare service company in Finland with more than hundred units including 15 private clinic hospitals in more than 50 municipalities. The company needs further resources to consolidate the companies acquired by it and to continue to develop high quality healthcare services and its growth strategy, comments Kari Neilimo, Vice Chairman of the Board of Directors of Terveystalo. - As the demand for healthcare services in Finland is increasing, the need for the private sector to complement the public healthcare is also growing. Terveystalo is the leading private healthcare service provider in Finland and has therefore unique possibilities to respond to this market trend. By providing the management with support in terms of experience and capital, we can support Terveystalo's management to continue to expand and strengthen Terveystalo's leading market position, says Mikael Lövgren, Partner responsible for Bridgepoint's investment activities in the Nordic region. The two biggest shareholders of Terveystalo, Ilmarinen and Varma, each holding 14 per cent of the shares and votes, have undertaken to accept the Tender Offer. - In the current demanding market environment, it is in our view good that the company has one single owner. This will secure the company's development in the long term. We find this new ownership structure positive because it not only secures fair compensation to the company's current shareholders, but also generates good prospects for the further development of the company and strengthens Terveystalo's leadership in the growing private sector healthcare market. This solution will benefit the current shareholders, Terveystalo's personnel as well as the company itself, emphasizes Timo Ritakallio, the Deputy Chief Executive Officer of Ilmarinen. According to Mikko Koivusalo, Director, Investments, responsible for Capital Markets at Varma: “We find the tender offer positive for both the current shareholders and the future of Terveystalo. Bridgepoint is committed to the development of the company and experienced in the healthcare market which will enable Terveystalo to effectively utilize the evident and significant potential in its market.” PRESS CONFERENCE A press conference regarding the Tender Offer will be held today on 19 January 2009 in Helsinki starting at 12:00 a.m. at Radisson SAS Royal Hotel, Runeberginkatu 2. FURTHER INFORMATION For further information, please contact: Martti Kiuru, CEO, Terveystalo, tel. +358 30 633 1629 Mikael Lövgren, Partner, Bridgepoint, tel. +46 706 15 48 48 THE TENDER OFFER The price offered in the Tender Offer will be EUR 2.00 per share in cash. The offer price represents a premium of 203.0 per cent compared to the closing price of the Terveystalo shares on NASDAQ OMX Helsinki on 16 January 2009, the last trading day preceding this announcement, a premium of 197.2 per cent compared to the volume-weighted average trading price of the Terveystalo shares on NASDAQ OMX Helsinki during the last 3 months, and a premium of 77.6 per cent compared to the volume-weighted average trading price during the last 12 months. Star Healthcare will also offer to acquire all of the 2008 option rights issued by Terveystalo and granted to holders for a price of EUR 0.20 in cash for each option right. Terveystalo shareholders representing in total approximately 51.8 per cent of the shares and votes in Terveystalo, including Mutual Pension Insurance Companies Ilmarinen and Varma, other major insurance companies and certain Board members, the Managing Director and certain members of the management team of Terveystalo, have undertaken irrevocably and unconditionally to accept the Tender Offer. The Board of Directors of Terveystalo unanimously recommends the shareholders and holders of option rights to accept the Tender Offer. The Board of Directors will issue its complete statement on the Tender Offer in accordance with the Finnish Securities Market Act on 21 January 2009 at the latest. The Board of Directors has obtained a fairness opinion from Pohjola Corporate Finance Oy, according to which the price offered in the Tender Offer is fair, from a financial point of view, to the shareholders and holders of option rights in Terveystalo. The members of Board of Directors of Terveystalo Ari Ahola, Pentti Parkkinen and Matti Roto have (personally and/or through entities represented by them) given irrevocable and unconditional undertakings to accept the tender offer and have thus not participated in any decision-making regarding the tender offer in the Board of Directors of Terveystalo. On the date of this press release, Terveystalo's share capital amounts to EUR 811,064.21 and the number of shares issued to 81,106,421. Star Healthcare or Bridgepoint Europe IV do currently not hold any shares or option rights in Terveystalo. BACKGROUND AND REASONS FOR THE TENDER OFFER Terveystalo has during the last years grown rapidly and is today the largest private healthcare service company in Finland. Star Healthcare believes Terveystalo is uniquely positioned in the Finnish healthcare and occupational healthcare market with its nationwide network of units, excellent customer base built on long-term relationships and experienced organisation and management. Bridgepoint has more than 20 years' experience in investing in European healthcare businesses including the Nordic healthcare service providers Attendo and Diaverum (formerly Gambro Healthcare). Bridgepoint has during the recent years followed the development of the Finnish healthcare market closely. The Finnish healthcare market is currently undergoing considerable changes and it is generally expected that the private sector participants will play an increasingly important role in the Finnish healthcare market in the long term. As the market leader, Terveystalo has the opportunity to further develop its operations and strengthen its active role in ensuring the provision of efficient and high quality healthcare services for private, corporate and public sector customers across Finland. Terveystalo, however, currently also faces some challenges. Following the acquisition of Medivire Työterveyspalvelut Oy in 2007, Terveystalo has experienced balance sheet constraints and a need to integrate the large number of acquisitions made during the last years. Completion of this integration programme in a quick and successful manner is critical to ensure continued quality of service to Terveystalo's customers. At the same time, Terveystalo remains focused on actively further developing its market leading position in the Finnish healthcare market. Star Healthcare has announced to be attracted by the opportunity to support the management and the business in achieving Terveystalo's long term potential. Through Bridgepoint's experience of successfully supporting similar healthcare businesses across Europe, Bridgepoint believes it is able to provide financial and also strategic support for Terveystalo's further development. Star Healthcare believes that Terveystalo would benefit from being a privately held company with owners that can respond immediately to Terveystalo's capital and strategic requirements, including access to capital to support Terveystalo's growth agenda and to enable a refinancing of Terveystalo's existing debt facilities in conjunction with the Tender Offer. In a private environment, Terveystalo's management can focus on delivering the strategic plan set for the business. REFINANCING FACILITIES AGREEMENT Terveystalo has on 19 January 2009 entered into an agreement with certain financial institutions concerning the refinancing of Terveystalo's current financing arrangements in conjunction with the Tender Offer (the “Refinancing Facilities Agreement”). The availability of the refinancing is contingent on the Tender Offer being completed in accordance with the terms and conditions thereof and certain other conditions. The new arrangements include a EUR 110 million term loan facility, a EUR 10 million acquisition facility, a EUR 10 million revolving facility and a EUR 30 million leasing facility. The term of the new facilities will be five years. Terveystalo's current financial arrangements include undertakings, the breach of which by Terveystalo entitles the lenders to terminate the facilities and require immediate repayment. During the financial year 2008 Terveystalo has negotiated several amendments to existing loan documents in order to ensure compliance with various undertakings. One of these related to the financial performance of Terveystalo as per year end 2008. The Refinancing Facilities Agreement will provide Terveystalo with long term financing on terms and conditions that Terveystalo believes will secure its ability to operate successfully and pursue its business concept both short and long term. In view of the Tender Offer and the Refinancing Facilities Agreement, Terveystalo's current lenders have undertaken not to use their termination right or their right to require repayment of their loans on account of a possible breach of Terveystalo's financial undertakings during the first quarter of 2009 or on account of the change of ownership resulting from the successful completion of the Tender Offer. Should the Tender Offer not be completed, both the Refinancing Facilities Agreement and the undertaking by the current lenders will lapse and Terveystalo will continue with its present financing arrangements that will remain in force. TERMS AND CONDITIONS OF THE TENDER OFFER The acceptance period under the Tender Offer by Star Healthcare is expected to commence on 26 January 2009 and to run until 16 February 2009. Star Healthcare has announced to reserve the right to extend the acceptance period in accordance with the terms and conditions of the Tender Offer. The completion of the Tender Offer will be subject to the following conditions: 1) the valid tender of shares representing more than 90 per cent of the issued and outstanding shares and voting rights of Terveystalo; 2) the receipt of all necessary regulatory approvals, permits and consents, including competition clearances, on terms acceptable to Star Healthcare; 3) no event, circumstance or change having occurred after the date hereof that results in or constitutes, or that can reasonably be expected to result in or constitute, a Material Adverse Change (as defined in the terms and conditions of the Tender Offer); 4) Star Healthcare not, after the date hereof, having received information previously undisclosed to it that has resulted in or constituted, or that can reasonably be expected to result in or constitute, a Material Adverse Change (as defined in the terms and conditions of the Tender Offer); 5) no court or regulatory authority of competent jurisdiction having given an order or issued any regulatory action preventing, postponing or materially challenging the completion of the Tender Offer; 6) the Board of Directors of Terveystalo having issued its complete statement regarding the Tender Offer (as required by the Finnish Securities Market Act) within two banking days after the date hereof recommending the shareholders and holders of Terveystalo option rights to accept the Tender Offer and such recommendation remaining in force and not being modified or changed; 7) the Transaction Agreement not having been terminated and remaining in force; and 8) the facilities under the Refinancing Facilities Agreement remaining available in accordance with the terms and conditions of said agreement. Star Healthcare will reserve the right to complete the Tender Offer even if the conditions to completion of the Tender Offer would not be fulfilled. As regards the regulatory approvals referred to in condition 2 above, the Finnish Competition Authority will be notified of the Tender Offer. Star Healthcare expects to receive the necessary clearance within the anticipated acceptance period. The Tender Offer will be financed through equity capital from Bridgepoint Europe IV, which is a EUR 4.8 billion fund raised in 2008 from leading institutional investors around the world. The Tender Offer will not be conditional upon obtaining financing for the Tender Offer. The detailed terms and conditions of the Tender Offer will be included in the tender offer document expected to be published by Star Healthcare on 26 January 2009. TRANSACTION AGREEMENT The Transaction Agreement between Star Healthcare and Terveystalo sets forth the principle terms under which Star Healthcare will make the Tender Offer. Under the Transaction Agreement, the Board of Directors of Terveystalo has undertaken, in the event of a competing offer, not to withdraw the recommendation for the Tender Offer unless, inter alia, (i) the terms and conditions of such offer are clearly more favourable to Terveystalo's shareholders than the Tender Offer and unconditional financing has been secured for such offer, (ii) the Board of Directors has, after having received independent external advice, reasonably and in good faith considered that failure to withdraw the recommendation would cause the Board of Directors to breach its fiduciary duties towards Terveystalo's shareholders under Finnish laws and (iii) the Board of Directors has complied with certain agreed procedures allowing Star Healthcare to enhance the Tender Offer. Should Star Healthcare enhance the Tender Offer so as to be at least equally favourable to Terveystalo's shareholders as the competing offer, the Board of Directors has undertaken to confirm and uphold the recommendation for the Tender Offer, as enhanced. The Board has also agreed not to, directly or indirectly, initiate or encourage any proposals for transactions competing with the Tender Offer and not to facilitate any such competing proposals. The Transaction Agreement further includes representations, warranties and undertakings by Terveystalo customary in transactions of a similar nature, such as conduct of business in the ordinary course of business and cooperation by the parties in necessary regulatory filings and in completing the Tender Offer in the most expeditious manner practicable. Terveystalo has further agreed that it shall in certain circumstances, such as a failure by the Terveystalo Board to issue its recommendation or a withdrawal, modification or change of its recommendation, compensate the Offeror its external transaction costs relating to the Tender Offer. Star Healthcare's intention is to cause the shares of Terveystalo to be delisted from NASDAQ OMX Helsinki as soon as permitted and practicable under applicable laws and regulations. ADVISORS Pohjola Corporate Finance Oy acts as the financial advisor and Bützow Attorneys Ltd. acts as the legal advisor for Terveystalo in connection with the Tender Offer. SEB Enskilda acts as the financial advisor and Roschier, Attorneys Ltd. as the legal advisor to Bridgepoint and Star Healthcare in connection with the Tender Offer. TERVEYSTALO HEALTHCARE OYJ Board of Directors FURTHER INFORMATION: Terveystalo Healthcare Oyj, Managing Director Martti Kiuru, tel. +358 30 633 1629, martti.kiuru@terveystalo.com Bridgepoint, Mikael Lövgren, Partner, tel. +46 706 15 48 48 This release is available at http://www.terveystalo.com TERVEYSTALO: Terveystalo is Finland's leading healthcare service company, offering versatile healthcare, occupational healthcare, diagnostics and hospital services. The company has more than 100 units around the country. Terveystalo, which was founded in 2001, has grown strongly. The company share is listed on the NASDAQ OMX Helsinki Ltd under the code SUT1V. www.terveystalo.com BRIDGEPOINT: Bridgepoint is one of Europe's leading mid-market private equity managers with a 25-year track record of investing in European businesses valued up to EUR 1 billion. It has a broad experience from a large number of buy-outs and investments in a wide range of sectors. Within healthcare, Bridgepoint is an active investor having made 12 investments across Europe with a total value of EUR 4 billion since 2000 alone. Bridgepoint has made eleven investments in the Nordic region since 1995, including A-Katsastus and Huurre in Finland. www.bridgepoint.eu THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW AND THIS PRESS RELEASE IS NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW BY ANY MEANS WHATSOEVER INCLUDING, WITHOUT LIMITATION, MAIL, FACSIMILE TRANSMISSION, E-MAIL OR TELEPHONE. DISTRIBUTION: NASDAQ OMX Helsinki Ltd Principal media www.terveystalo.com
PUBLIC TENDER OFFER FOR ALL THE SHARES AND OPTION RIGHTS IN TERVEYSTALO
| Source: Terveystalo Healthcare Oyj