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Emergent BioSolutions (EBS) Shells Out $222 Million For Cangene Corporation (CC:CNJ)


12/12/2013 7:12:34 AM

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Cangene To Be Acquired By Emergent BioSolutions For US$222 Million

WINNIPEG , Dec. 11, 2013 /CNW/ - Cangene Corporation ("Cangene") (CNJ.TO) today announced the signing of a definitive agreement under which Emergent BioSolutions ("Emergent") (EBS) of Rockville, Maryland will acquire Cangene in an all-cash transaction valued at US$222 million (approximately C$236 million 1).

Under the terms of the agreement, which has been approved by the Boards of Directors of both companies, Cangene shareholders will receive US$3.24 per share ( C$3.44 per share) in cash. The purchase price represents a premium of approximately 27% to Cangene's closing stock price of C$2.70 on December 10, 2013 and 45% to Cangene's 90-day volume weighted average stock price. The acquisition will be implemented through a court-approved Plan of Arrangement under Canadian law and is subject to the approval of Cangene common shareholders, court approval and U.S. regulatory approvals and other customary closing conditions. The transaction is expected to be completed in the first calendar quarter of 2014.

John Sedor , President and CEO of Cangene, said: "This compelling transaction is a reflection of our employees' hard work and the quality and success of our business. Over the last few years, our team has transformed Cangene into an exceptional specialty biopharmaceutical company and biodefense leader, as demonstrated by our recent product approvals and biodefense contracts. We believe Cangene will now benefit from becoming part of Emergent, a leader in developing vaccines, as well as therapeutics for addressing critical diseases and disorders. The combination provides an excellent opportunity for our organization to continue its success, and it delivers immediate, significant value to Cangene shareholders."

Daniel Abdun-Nabi , President and CEO of Emergent, said: "Cangene is a terrific addition to Emergent. Our businesses are highly complementary. The addition of revenue-generating products and services across biodefense, commercial specialty biopharmaceuticals, and contract manufacturing significantly advances Emergent towards achievement of our growth plan. Once the transaction is closed, we look forward to working with the talented Cangene employees to realize the exciting potential of this combination."

Plan of Arrangement

The acquisition will be implemented through a Plan of Arrangement under Canadian law and is subject to a number of customary conditions including, but not limited to, the approval of at least 66 and 2/3% of the votes cast in person or by proxy by Cangene common shareholders at a special meeting of Cangene's common shareholders, as well as court and regulatory approvals. The terms and conditions of the arrangement and additional details of the transaction will be summarized in Cangene's management information circular, which is expected to be filed and mailed to Cangene's shareholders in early January. A copy of the arrangement agreement will be filed on Cangene's SEDAR profile and will be available for viewing at www.sedar.com. The special meeting of Cangene security holders is scheduled to be held on February 12, 2014 , subject to Court confirmation, with closing expected to occur in the first calendar quarter of 2014.

The arrangement agreement is subject to customary non-solicit provisions and Cangene's right to withdraw its recommendation of the transaction to shareholders in the event of a superior proposal. The agreement also contains certain termination rights, including termination fees that would apply in certain circumstances if the transaction is not consummated.

After receiving financial and legal advice, the members of the Board of Directors of Cangene voting on the resolution determined that the arrangement is in the best interests of Cangene, and resolved to support the arrangement and to recommend that its shareholders vote in favor of the arrangement. Raymond James Ltd. has provided an opinion to Cangene's Board of Directors that subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by holders of common shares pursuant to the arrangement is fair, from a financial point of view, to such holders. A copy of the Raymond James Ltd. opinion and other factors considered by the Cangene Board of Directors and other relevant background information will be included in the management information circular that will be mailed to Cangene common shareholders.

Shareholders collectively controlling approximately 61% of the outstanding common shares of Cangene have entered into support agreements to vote their shares in favor of the transaction with Emergent.

Advisors on the Transaction

Credit Suisse Securities ( Canada ), Inc. is acting as financial advisor to Cangene, and Miller Thomson LLP and BakerHostetler LLP are serving as legal counsel to the company. Raymond James Ltd. provided a fairness opinion to Cangene. Bank of America Merrill Lynch is acting as financial advisor to Emergent, and DLA Piper LLP and McCarthy Tétrault LLP are acting as legal advisors.

About Emergent BioSolutions

Emergent BioSolutions is a specialty pharmaceutical company seeking to protect and enhance life by offering specialized products to healthcare providers and governments to address medical needs and emerging health threats. Additional information about the company may be found at www.emergentbiosolutions.com.

About Cangene Corporation

Cangene Corporation (CNJ.TO), headquartered in Winnipeg, Canada , is one of the nation's oldest and largest biopharmaceutical companies. It is focused on the development and commercialization of specialty therapeutics. Cangene's products are sold worldwide and include products that have been accepted into the U.S. Strategic National Stockpile. Cangene has offices in three locations across North America . It operates manufacturing facilities in Winnipeg, Manitoba and Baltimore, Maryland (through its wholly-owned subsidiary, Cangene bioPharma, Inc.) where it produces its own products and undertakes contract manufacturing for a number of customers. Cangene also operates a plasma-collection facility in Winnipeg, Manitoba under the name Cangene Plasma Resources. Its U.S. sales and marketing office is located in Philadelphia, Pennsylvania . For more information about Cangene, visit the Company's website at www.Cangene.com.

Cautionary Note regarding Forward-Looking Information

This document contains forward-looking statements about the Corporation, including its business operations, strategy, and expected financial performance and condition. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "will", "believes", "estimates", or negative versions thereof, and similar expressions. In addition, any statement that may be made concerning future financial performance (including revenues, earnings or growth rates), ongoing business strategies or prospects, future use, safety and efficacy of unapproved products or unapproved uses of products, and possible future action by the Corporation are also forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Corporation, economic factors and the biopharmaceutical industry generally. They are not guarantees of future performance. Actual events and results could differ materially from those expressed or implied by forward-looking statements made by the Corporation due to, but not limited to, important factors such as sales levels; fluctuations in operating results; the Corporation's reliance on a small number of customers including government organizations; the demand for new products and the impact of competitive products, service and pricing; the availability and cost of raw materials, and in particular, the cost, availability and antibody concentration in plasma; progress and cost of clinical trials; costs and possible development delays resulting from use of legal, regulatory or legislative strategies by the Company's competitors; uncertainty related to intellectual property protection and potential costs associated with its defence as well as general economic, political and market factors in North America and internationally; interest and foreign exchange rates; business competition; technological change; changes in government action, policies or regulations; decisions by Health Canada, the United States Food and Drug Administration and other regulatory authorities regarding whether and when to approve drug applications that have been or may be filed, as well as their decisions regarding labeling and other matters that could affect the availability or commercial potential of drug candidates; unexpected judicial or regulatory proceedings; catastrophic events; the Corporation's ability to complete strategic transactions; and other factors beyond the control of management.

The reader is cautioned that the foregoing list of important factors is not exhaustive and there may be other factors listed in other filings with securities regulators, including factors set out under "Risk and Uncertainties" in the Corporation's Management Discussion and Analysis, which, along with other filings, is available for review at www.sedar.com. The reader is also cautioned to consider these and other factors carefully and not to place undue reliance on forward-looking statements. Other than as specifically required by applicable law, the Corporation has no intention to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Cautionary Note Regarding Non-IFRS Financial Measures

This news release may contain non-IFRS financial measures. Terms by which non-IFRS financial measures are identified include but are not limited to "net cash", "total assets", "sales" and other similar expressions. Non-IFRS financial measures are used to provide management and investors with additional measures of performance. However, non-IFRS financial measures do not have standard meanings prescribed by IFRS and are not directly comparable to similar measures used by other companies. Please refer to the appropriate reconciliations of these non-IFRS financial measures to measures prescribed by IFRS.

1 Based on exchange rate of US$0.942 to C$1.00 as of market close December 10, 2013 .

SOURCE Cangene Corporation

Contact:

Investor Contact:

Jeff Lamothe

Chief Financial Officer

Ph: (204) 275-4267

Email: ir@cangene.com

Media Contacts:

Andrew Cole/Delia Cannan/Alexandra LaManna

Sard Verbinnen and Co

Ph: (212) 687-8080

Email: cangene-svc@sardverb.com

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