Transformational acquisition establishes Knight as a premiere pan-American (ex-US) specialty pharma company

  • Executes on Knight’s strategy to build a Rest of World specialty pharmaceutical company and become the partner of choice for top pharmaceutical companies for pan-American (ex-US) in-licensing opportunities
  • Strong regional infrastructure and management team with a unique footprint across 10 countries in Latin America
  • Established and diversified portfolio of innovative products across specialty therapeutic areas
  • Significant organic growth opportunity via robust in-licensing pipeline and a solid platform for future growth via acquisition
  • Grupo Biotoscana generated revenue of BRL 754 million or C$240 million and adjusted EBITDA of BRL 154 million or C$49 million for the last twelve month period ending June 30, 2019(1, 2)

MONTREAL, Oct. 21, 2019 (GLOBE NEWSWIRE) -- Knight Therapeutics Inc. (TSX: GUD) ("Knight") today announced that it has entered into a definitive agreement under which Knight will acquire a 51.21% interest in Biotoscana Investments S.A. (B3: GBIO33) (“GBT” or “Grupo Biotoscana”) from a controlling shareholder group that includes Advent International and Essex Woodlands, among others, for BRL 10.96 per share. This implies a 22.2% premium to GBT’s 30-day volume weighted average share price as of October 18, 2019. Knight will pay approximately BRL 596 million or C$189 million(1) in cash consideration for the 51.21% controlling interest in GBT. Following completion of this transaction, Knight will launch a mandatory tender offer to acquire the remaining 48.79% interest in GBT from public shareholders on similar terms, for expected cash consideration of approximately BRL 568 million or C$180 million(1), assuming all public shareholders tender their shares.

Following completion of the acquisition of 100% of GBT, Knight expects to pay an aggregate equity purchase price of BRL 1,164 million or C$369 million(1) and an enterprise value of BRL 1,318 million or C$418 million(1), including net financial debt as at June 30, 2019. This represents an attractive purchase multiple of 8.5x GBT’s LTM adjusted EBITDA.

“This transformational acquisition establishes Knight as a premiere pan-American (ex-US) specialty pharmaceutical company. With scale and a strong regional infrastructure, we will be well positioned as the pan-American (ex-US) in-licensing partner of choice,” said Jonathan Ross Goodman, Chief Executive Officer of Knight. “The combination of Knight and GBT creates a compelling platform in large, fast growing markets. GBT is a natural strategic fit, with a similar business model to Knight and strong relationships with global partners.”

Grupo Biotoscana is a biopharmaceutical group that operates in the fast-growing Latin American region and focuses on rapidly growing market segments such as oncology and onco-hematology, infectious diseases and other specialty therapeutic areas. GBT is currently present throughout 10 Latin American countries where it operates under its companies Biotoscana, United Medical, LKM and DOSA.

“After an extensive search for opportunities and partners in Latin America, we are very excited to welcome GBT’s team of talented people, who are fundamentally aligned with Knight’s culture and core values”, commented Samira Sakhia, President of Knight. “GBT is a stand-alone successful business that we intend to add significant value to through our business development and operational expertise. We look forward to working with our new extended team to build a pan-American commercial solution for biotech and pharmaceutical companies with late-stage innovative therapeutics.”

Transaction Structure, Approvals and Closing Conditions

Knight will acquire a 51.21% interest from a controlling shareholder group that includes Advent International and Essex Woodlands (the “Private Transaction”) for cash consideration of approximately BRL 596 million or C$189 million(1). The Private Transaction is expected to close by November 29, 2019, subject to the satisfaction of customary closing conditions, and will not be subject to anti-trust approval in Brazil. The Private Transaction will be fully funded from cash on Knight’s balance sheet. Upon completion of this first step, Knight will become the controlling shareholder and will appoint its representatives to the board of directors of GBT.

Following the closing of the Private Transaction, Knight will launch a mandatory public tender offer to acquire the remaining 48.79% interest in GBT from public shareholders (the “Tender Offer”) on similar terms as the Private Transaction. Knight expects to pay approximately BRL 568 million or C$180 million(1) in connection with the Tender Offer, assuming all public shareholders tender their shares. The Tender Offer process is expected to take 4 to 8 months from launch to complete and is expected to be fully funded from cash on Knight’s balance sheet.

Knight will own a 51.21% controlling interest in GBT upon the close of the Private Transaction and public shareholders will continue to own the remaining 48.79% interest. Knight intends to acquire 100% of GBT following completion of the Tender Offer. Following completion of the acquisition of 100% of GBT, Knight expects to pay an aggregate equity purchase price of BRL 1,164 million or C$369 million(1) and an enterprise value of BRL 1,318 million or C$418 million(1), including net financial debt as at June 30, 2019.

Knight has retained RBC Capital Markets as its exclusive financial advisor and Davies Ward Phillips & Vineberg LLP as its legal advisor.

Conference Call Notice

Knight will host a conference call and webcast to discuss the transaction today at 8:30am EST. Knight cordially invites all interested parties to participate in this call.

Date: Monday, October 21, 2019
Time: 8:30 a.m. EST
Telephone: Toll Free 1-877-223-4471 or International 1-647-788-4922                           
Webcast: www.gud-knight.com or https://tinyurl.com/y67oongy
This is a listen-only audio webcast. Media Player is required to listen to the broadcast
Replay: An archived replay will be available for 30 days at www.gud-knight.com
Link to Presentation Slides: https://tinyurl.com/y3osw833, will be available for 30 days

Footnotes

(1)Brazilian Real (“BRL”) converted to Canadian Dollar (“C$”) at the October 18 exchange rate of 3.145
(2)Adjusted EBITDA is a non-IFRS measure. Knight believes this non-IFRS financial measure provides useful information to both management and investors in measuring financial performance. This measure does not have a standard meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies, and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

About Knight Therapeutics Inc.

Knight Therapeutics Inc., headquartered in Montreal, Canada, is a specialty pharmaceutical company focused on acquiring or in-licensing and commercializing innovative pharmaceutical products for the Canadian and select international markets. Knight Therapeutics Inc.'s shares trade on TSX under the symbol GUD. For more information about Knight Therapeutics Inc., please visit the company's web site at www.gud-knight.com or www.sedar.com.

Forward-Looking Statement

This document contains forward-looking statements for Knight Therapeutics Inc. and its subsidiaries. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. Knight Therapeutics Inc. considers the assumptions on which these forward-looking statements are based to be reasonable at the time they were prepared but cautions the reader that these assumptions regarding future events, many of which are beyond the control of Knight Therapeutics Inc. and its subsidiaries, may ultimately prove to be incorrect. Factors and risks, which could cause actual results to differ materially from current expectations are discussed in Knight Therapeutics Inc.'s Annual Report and in Knight Therapeutics Inc.'s Annual Information Form for the year ended December 31, 2018. Knight Therapeutics Inc. disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information or future events, except as required by law.

Contact Information for Knight:

Knight Therapeutics Inc.
Samira Sakhia
President and Chief Financial Officer
T: 514-678-8930
F: 514-481-4116
info@gudknight.com
www.gud-knight.com