Mayne Well Positioned to Weather the Storm; Maintaining FVE and Very High Uncertainty

Mayne Pharma Focuses on Building Brand and Maintaining Momentum for Doryx

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Equity Capital Markets

Mayne Pharma has agreed to buy a portfolio of U.S. generic products from Teva and Allergan for USD 652 million (AUD 881 million) in cash, primarily funded via a fully underwritten equity raising. Settlement is expected by late July 2016. This is a transformation deal that makes financial and strategic sense. The acquisition is likely to be significantly earnings accretive even before synergies and transaction costs. On our preliminary analysis excluding noncash amortisation charges, Mayne's 12-month pro forma fiscal 2017 cash EPS would increase by around 37%. The large accretion reflects the attractive price and the much higher margin generated by the acquired portfolio. The purchase price is less than 6 times fiscal 2017 EBITDA and well below the 12 times that Mayne shares are trading at.Analyst: Chris Kallos, CFA

Mayne Pharma has agreed to buy a portfolio of U.S. generic products from Teva and Allergan for USD 652 million (AUD 881 million) in cash, primarily funded via a fully underwritten equity raising. Settlement is expected by late July 2016. This is a transformation deal that makes financial and strategic sense. The acquisition is likely to be significantly earnings accretive even before synergies and transaction costs. On our preliminary analysis excluding noncash amortisation charges, Mayne's 12-month pro forma fiscal 2017 cash EPS would increase by around 37%. The large accretion reflects the attractive price and the much higher margin generated by the acquired portfolio. The purchase price is less than 6 times fiscal 2017 EBITDA and well below the 12 times that Mayne shares are trading at.Analyst: Chris Kallos, CFA

Opportunity Knocks as Mayne Pharma Makes A Transformational Acquisition