Ascendis Health Rights Offer oversubscribed by more than 300%

Ascendis CEO, Dr Karsten Wellner

Ascendis Health announced today that its R1,2bn rights issue which closed last week has been more than three times oversubscribed, and that the company had secured the required funding to conclude its recent R7,3bn 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 R2,3bn at the time of the release of the circular, and entered into an underwriting agreement with Absa Bank Limited and HSBC Bank plc 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 (IFC), a division of the World Bank.

Ascendis CEO, Dr Karsten Wellner says, “This overwhelming support from the local and international investment community is extremely encouraging, and a continuing vote of confidence for our proposition, our delivery and focussed globalisation strategy.”

Remedica is a specialist generics pharmaceutical company with a presence in over 100 countries and a major supplier of pharmaceuticals to non-governmental organizations 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 R7,3bn to more than R10bn, supporting the vision of becoming a leading global player in the Health and Care sector.

Dr Wellner concluded, “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.”