Disposal
Smith & Nephew Plc
16 December 2005
Smith & Nephew realises investment in BSN medical
16 December 2005
Smith & Nephew plc (LSE: SN, NYSE: SNN) announced earlier today the signing,
together with Beiersdorf AG its joint venture partner, of an agreement to sell
BSN medical ('BSN') for an enterprise value of €1030 million to Montagu Private
Equity. Completion of the transaction is conditional upon competition
clearances being received and is expected to take place in the first quarter of
2006.
Smith & Nephew expects its share of the proceeds to be around €495 million (£330
million) in cash, after adjusting for net debt of BSN and certain other items,
and will be applied in repaying group borrowings. Net assets subject to
disposal are £145 million and the gain on disposal will be around £170 million,
after transaction costs of around £15 million, and will be accounted for on
completion. Cash tax of around £20 million will be payable on the transaction.
Commenting on the sale, Sir Christopher O'Donnell, Chief Executive of Smith &
Nephew, said:
'We established BSN with Beiersdorf in 2001 as a planned exit from our lower
growth hospital supply businesses. Over the last five years through business
rationalisation it has established itself as a highly profitable business and a
market leader in many of its markets. We are very pleased to have achieved this
sale at a value which represents nearly twice the revenues of the business for
the current year.'
Commenting on the effect of the sale on Smith & Nephew, Peter Hooley, Finance
Director, said:
'The sale of BSN enhances the growth prospects and the financial strength of
Smith & Nephew to continue to invest in expanding its businesses. The profits
of BSN, which are accounted for on an equity basis, are expected to contribute
approximately £161/2m after tax to group earnings in 2005. Whilst the sale of
BSN is expected to dilute Smith & Nephew's growth in adjusted earnings per share
by just under 4%, in 2006, it is expected in subsequent years to augment that
growth by approaching 1% per annum.'
Enquiries
Investors/Media
Liz Hewitt Tel: +44 (0) 20 7401 7646
Smith & Nephew Group Director Corporate Affairs
About us
Smith & Nephew is a global medical technology business, specialising in
Orthopaedics, Endoscopy and Advanced Wound Management products. Smith & Nephew
is a global leader in arthroscopy and advanced wound management and is one of
the fastest growing global orthopaedics companies.
Smith & Nephew is dedicated to helping improve people's lives. The company
prides itself on the strength of its relationships with its surgeons and
professional healthcare customers, with whom its name is synonymous with high
standards of performance, innovation and trust. The company has over 8,500
employees and operates in 33 countries around the world generating annual sales
of £1.25 billion.
Forward-Looking Statements
This press release contains certain 'forward-looking statements' within the
meaning of the US Private Securities Litigation Reform Act of 1995. In
particular, statements regarding expected revenue growth and operating margins
discussed under 'Outlook' are forward-looking statements as are discussions of
our product pipeline. These statements, as well as the phrases 'aim', 'plan',
'intend', 'anticipate', 'well-placed', 'believe', 'estimate', 'expect',
'target', 'consider' and similar expressions, are generally intended to identify
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other important factors (including, but not
limited to, the outcome of litigation, claims and regulatory approvals) that
could cause the actual results, performance or achievements of Smith & Nephew,
or industry results, to differ materially from any future results, performance
or achievements expressed or implied by such forward-looking statements. Please
refer to the documents that Smith & Nephew has filed with the U.S. Securities
and Exchange Commission under the U.S. Securities Exchange Act of 1934, as
amended, including Smith & Nephew's most recent annual report on Form 20F, for a
discussion of certain of these factors.
All forward-looking statements in this press release are based on information
available to Smith & Nephew as of the date hereof. All written or oral
forward-looking statements attributable to Smith & Nephew or any person acting
on behalf of Smith & Nephew are expressly qualified in their entirety by the
foregoing. Smith & Nephew does not undertake any obligation to update or revise
any forward-looking statement contained herein to reflect any change in Smith &
Nephew's expectation with regard thereto or any change in events, conditions or
circumstances on which any such statement is based.
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