GSK to acquire CNS Inc
GlaxoSmithKline PLC
09 October 2006
GlaxoSmithKline to acquire CNS, Inc.
Innovative, high-growth Breathe Right and FiberChoice brands
extend Consumer Healthcare portfolio
London, 9 October, 2006 - GlaxoSmithKline plc (LSE:GSK) (NYSE:GSK) and CNS, Inc.
(NASDAQ:CNXS) today announced execution of a definitive agreement for GSK to
acquire CNS, the manufacturer of Breathe Right(R) nasal strips and
FiberChoice(R) dietary fiber supplements for $37.50 per share in cash, valuing
the transaction at approximately $566 million. The merger consideration
represents a premium of 31% over the trading price of CNS's common stock at
close of business on 6 October, 2006. The transaction, which is expected to
close by early 2007, is subject to customary conditions including CNS
stockholder approval and antitrust clearance under the Hart-Scott-Rodino Act.
CNS, based in Minneapolis, Minnesota, USA, reported through June 2006, 12-month
sales of $118.5 million, growth of 18% over the previous 12-month period ended
30 June, 2005. The US market generates 86% of the company's sales. Breathe Right
branded products are marketed in 27 countries. FiberChoice fiber supplements are
marketed solely in the US.
Commenting on this acquisition, John Clarke, President, GSK Consumer Healthcare,
said: "This outstanding business provides a great global growth opportunity for
GSK. CNS is a well-managed company. Its two major brands, Breathe Right and
FiberChoice, fit with our growth strategy and are great additions to our
portfolio. The opportunity for growth through geographic expansion and pipeline
innovation make this acquisition an exciting prospect."
"This transaction will deliver excellent value to our shareholders," said Marti
Morfitt, President and CEO of CNS. "I am proud of our achievements at CNS and
the success we have built around our brands, and am happy that our good work
will continue with GSK as these brands realize their worldwide potential. GSK's
professionalism and innovative culture, with their track record of successfully
integrating brands and people, will ensure a smooth transition."
Breathe Right strips are the leading nasal strip, and FiberChoice supplements
are a fast-growing line of dietary fiber supplements. Both brands are supported
by patents in the U.S. and key markets worldwide, and by scientific evidence for
their product claims. The sales growth of Breathe Right and FiberChoice is
driven by consumer insights and a focused strategy that has been very
successful: Breathe Right has delivered 12% and FiberChoice 54% sales compound
annual growth rates, respectively, over the past three years. For GSK, the
transaction will be neutral to earnings in 2007, and accretive from 2008.
The proposed transaction with GSK follows a review of potential acquirers
conducted by CNS with the assistance of its financial advisor. Sawaya Segalas &
Co., LLC acted as exclusive financial advisor to CNS in connection with the
transaction and delivered a fairness opinion to CNS's Board of Directors.
CNS's brands are:
The Breathe Right family of products that include a line of nasal strips that
open nasal passages to offer better breathing. Breathe Right strips treat
congested breathing that is suffered by many consumers at some point during the
year, caused by colds (94% people/year) and allergies (69% people/year). (1)
The FiberChoice family of products offers a line of fiber supplements in a
convenient tablet form with a 'Fiber for Health' positioning. FiberChoice is a
fast-growing brand of fiber supplements.
S M Bicknell
Company Secretary
9 October 2006
About GlaxoSmithKline
GlaxoSmithKline is one of the world's leading research-based pharmaceutical and
healthcare companies - is committed to improving the quality of human life by
enabling people to do more, feel better and live longer. For company
information, visit www.gsk.com.
About GlaxoSmithKline Consumer Healthcare
GlaxoSmithKline Consumer Healthcare is one of the world's largest over-the-
counter consumer healthcare products companies. Its more than 30 well-known
brands include the leading smoking cessation products, Nicoderm(R) CQ(R) and
Commit(R); many medicine cabinet staples, including Panadol(R), Abreva(R),
Aquafresh(R), Sensodyne(R) and Tums(R); and nutritional healthcare products such
as Lucozade(R), Horlicks(R) and Ribena(R).
About CNS, Inc.
CNS, based in Minneapolis, designs and markets consumer healthcare products
including Breathe Right(R) nasal strips and FiberChoice(R) dietary fiber
supplements. The company focuses on products that address important consumer
needs within the self-care market, including better breathing and digestive
health. Its common stock is listed on the Nasdaq National Market under the
ticker symbol "CNXS". More information about CNS and its products is available
at www.cns.com.
Caution Regarding Forward-Looking Statements
Any statements made regarding the proposed merger transaction between CNS, Inc.,
and GlaxoSmithKline plc, the expected timetable for completing the transaction,
the satisfaction of closing conditions, timing or satisfactory receipt of
regulatory or CNS stockholder approvals, future products or market growth, and
any other statements regarding CNS' future expectations, beliefs, goals or
prospects are forward-looking statements which are subject to risks and
uncertainties. For a more complete list and description of such risks and
uncertainties, refer to CNS' Annual Report on Form 10-K for the year ended 31
March, 2006, and Quarterly Report on Form 10-Q for the period ended 30 June,
2006, as well as other filings by CNS with the Securities and Exchange
Commission (the "SEC"). Actual results may differ materially from those
contained in the forward-looking statements in this press release. You are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. CNS undertakes no obligation
and does not intend to update any forward-looking statements after the date of
this document, whether as a result of new information, future events,
developments, changes in assumptions or otherwise.
Under the safe harbor provisions of the US Private Securities Litigation Reform
Act of 1995, GlaxoSmithKline cautions investors that any forward-looking
statements or projections made by GlaxoSmithKline, including those made in this
announcement, are subject to risks and uncertainties that may cause actual
results to differ materially from those projected. Factors that may affect the
Group's operations are described under 'Risk Factors' in the Operating and
Financial Review and Prospects in GlaxoSmithKline's Annual Report 2005.
Important Merger Information
In connection with the proposed merger with GlaxoSmithKline plc, the Company
will file a proxy statement with the SEC. Stockholders and investors are advised
to read the proxy statement when it becomes available because it will contain
important information about the merger and the Company. Stockholders and
investors may obtain a free copy of the proxy statement (when available) and
other documents filed by the Company with the SEC at the SEC's web site at
www.sec.gov. Free copies of the proxy statement, once available, and the
Company's other filings with the SEC, may also be obtained from the Company at
www.cns.com by clicking on the "Investors" tab and then following the link at "
Financial Information" to "SEC Filings." Free copies of the Company's filings
may be obtained by directing a written request to CNS, Inc., 7615 Smetana Lane,
Eden Prairie, Minnesota 55344, Attention: Samuel E. Reinkensmeyer or by
telephone at 952-229-1510.
Participants in the Solicitation
The Company and its directors, executive officers and other members of its
management may be deemed to be soliciting proxies from the Company's
stockholders in favor of the merger. Investors and stockholders may obtain more
detailed information regarding the direct and indirect interests in the merger
of persons who may, under the rules of the SEC, be considered participants in
the solicitation of the Company's stockholders in connection with the merger by
reading the preliminary and definitive proxy statements regarding the merger,
which will be filed with the SEC. Information about the Company's directors and
executive officers may be found in the Company's definitive proxy statement
filed with the SEC on 7 July, 2006. These documents will be available free of
charge once available at the SEC's web site at www.sec.gov or by directing a
request to the Company as described above.
Breathe Right and FiberChoice are registered trademarks of CNS, Inc.
Commit, Abreva, Aquafresh, Panadol, Sensodyne, Tums, Lucozade, Horlicks and
Ribena are trademarks of GlaxoSmithKine. Nicoderm is a trademark of
Sanofi-Aventis in the US and is used under license by GlaxoSmithKline as
Nicoderm CQ.
GSK Enquiries:
UK Media enquiries: Philip Thomson (020) 8047 5502
Gwenan Evans (020) 8047 5502
Alice Hunt (020) 8047 5502
US Media enquiries: Brian Jones (215) 751 3415
Malesia Dunn (412) 200 3544
Patricia Seif (215) 751 7709
European Analyst/ Anita Kidgell (020) 8047 5542
Investor enquiries: Jen Hill (020) 8047 5543
David Mawdsley (020) 8047 5564
US Analyst / Investor Frank Murdolo (215) 751 7002
enquiries: Tom Curry (215) 751 5419
CNS Enquiries:
Media enquiries: Marian Briggs (612) 455 1742
Padilla Speer Beardsley
Analyst / Investor enquiries: Sam Reinkensmeyer (952) 229 1510
CFO, CNS
--------------------------
(1) US AC Nielsen Marketing Mix Study, 13 February, 2006
This information is provided by RNS
The company news service from the London Stock Exchange
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