Lonza Group AG Submits Non-binding Proposal to Acquire All Patheon Inc. Restricted Voting Shares for USD 3.55 per Share, Significantly Above Existing Bid by JLL

August 21,2009 Basel, Switzerland and Toronto, Canada
  • Proposal in line with Lonza’s stated strategy of expanding the offering across the pharmaceutical manufacturing value chain
  • Lonza proposal significant improvement in value for Patheon shareholders

 

The Special Committee of Independent Directors of Patheon Inc. (TSX:PTI) and Lonza Group AG (SIX:LONN) announced today that Lonza, one of the world’s leading suppliers to the pharmaceutical, healthcare and life science industries, has submitted a non-binding proposal to acquire all of the outstanding Restricted Voting Shares of Patheon at a price of USD 3.55 per Restricted Voting Share.

“Our interest in Patheon is consistent with Lonza’s stated strategy of expanding our offering across the pharmaceutical manufacturing value chain. An acquisition of Patheon would take us into the complementary activities of finished dosage development and manufacturing for both small molecule and biological active ingredients. With Patheon, Lonza would be in a unique position to offer its customers manufacturing capability across the complete supply chain,” said Stefan Borgas, CEO of Lonza.

Paul Currie, Chairman of the Special Committee of Independent Directors of Patheon, said that, if completed, a transaction at the price proposed by Lonza would be a significant improvement in value for Patheon shareholders above the current offer from JLL Patheon Holdings LLC (“JLL”).

Lonza has signed a confidentiality and standstill agreement with Patheon. In turn, Patheon has also agreed not to negotiate an acquisition transaction with any party other than Lonza for a period ending September 30, 2009, subject to extension in certain circumstances. During this period, Lonza will be given additional access to information regarding Patheon so that it may complete its confirmatory due diligence. The terms of the exclusivity period permit Patheon to respond to an unsolicited superior acquisition proposal, subject to certain restrictions. The Lonza proposal does not commit either party to complete any transaction.

“Based on all of the information available to it, the Special Committee’s view has been that Patheon continuing as an independent company is a more attractive alternative than the JLL offer,” Mr. Currie said. “The Special Committee also believes that the Lonza proposal would provide an excellent opportunity to secure the successful future development of Patheon, and that it is in the best interest of all Patheon shareholders to explore the Lonza proposal further.”

The transaction contemplated by the Lonza proposal would be subject to Lonza being satisfied with the completion of its confirmatory due diligence investigations, the parties entering into definitive documentation, and the approval of each party’s Board of Directors. There can be no assurance that any such transaction will be completed or as to the terms of any such transaction.

 

About Lonza

Lonza is one of the world's leading suppliers to the pharmaceutical, healthcare and life science industries. Its products and services span its customers’ needs from research to final product manufacture. Lonza is the global leader in the production and support of active pharmaceutical ingredients both chemically as well as biotechnologically. Biopharmaceuticals are one of the key growth drivers of the pharmaceutical and biotechnology industries. Lonza has strong capabilities in large and small molecules, peptides, amino acids and niche bioproducts which play an important role in the development of novel medicines and healthcare products. Lonza is a leader in cell-based research, endotoxin detection and cell therapy manufacturing. Lonza is also a leading provider of value chemical and biotech ingredients to the nutrition, hygiene, preservation, agro and personal care markets.

Lonza is headquartered in Basel, Switzerland and is listed on the SIX Swiss Exchange. In 2008, Lonza had sales of CHF 2.937 billion. Further information can be found at www.lonza.com.

 

About Patheon

Patheon Inc. (TSX:PTI; www.patheon.com) is a leading global provider of contract development and manufacturing services to the global pharmaceutical industry. Patheon prides itself in providing the highest quality products and services to more than 300 of the world's leading pharmaceutical and biotechnology companies. Patheon's services range from preclinical development through commercial manufacturing of a full array of dosage forms including parenteral, solid, semi-solid and liquid forms. Patheon uses many innovative technologies including single-use disposables, Liquid-Filled Hard Capsules and a variety of modified release technologies.

Patheon's comprehensive range of fully integrated Pharmaceutical Development Services includes pre-formulation, formulation, analytical development, clinical manufacturing, scale-up and commercialization. Patheon can take customers direct to clinic with global clinical packaging and distribution services and Patheon's Quick to Clinic™ programs can accelerate early phase development project to clinical trials while minimizing the consumption of valuable API.

Patheon's integrated development and manufacturing network of 10 facilities, and seven development centers across North America and Europe, strives to ensure that customer products can be launched with confidence anywhere in the world.

 

Caution Concerning Forward-Looking Statements

This news release may contain forward-looking statements which reflect management's expectations regarding the Company's future growth of operations, performance (both operational and financial) and business prospects and opportunities. These statements are made in the context of the risks and uncertainties that are outlined in the Company's public documents, which can be accessed on our website at www.patheon.com or on SEDAR at www.sedar.com.

This press release does not constitute an offer to buy or the solicitation of an offer to sell restricted voting shares of Patheon Inc. Lonza Group AG has not yet commenced, and may not commence, the proposed offer described herein. Should Lonza Group AG commence an offer, it will only be made pursuant to an offer to purchase and related materials to be filed with Canadian securities regulators and distributed to shareholders of Patheon Inc. You should read these documents if and when they become available because they will contain important information about any such offer.

 

Contacts:

Lonza

Media Relations
Dominik Werner
Tel +41 61 316 87 98
dominik.werner@lonza.com

Investor Relations
Alexandre Pasini
Tel +41 61 316 88 35
alexandre.pasini@lonza.com

Patheon Special Committee
Information Agent for the Special Committee
Kingsdale Shareholder Services
1-866-851-3212

Media
John Lute
Lute & Company
Tel +1 416 929 5883
jlute@luteco.com

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