Grifols to acquire a Novartis diagnostics business unit for US$1,675 million

 Grifols to acquire a Novartis diagnostics business unit for US$1,675 million

  PR Newswire

  BARCELONA, Spain, Nov. 11, 2013

BARCELONA, Spain, Nov. 11, 2013 /PRNewswire/ --

  *The assets acquired include in vitro diagnostic products and technology
    for transfusion medicine and immunology, a manufacturing plant in the USA
    and commercial offices in United States, Switzerland and Hong Kong
  *Following the acquisition, Grifols' Diagnostic Division will account for
    over 20% of the company's sales, with an estimated turnover close to US$
    1.0 billion
  *This acquisition will significantly increase sales and EBITDA with
    earnings accretion in year 1
  *This transaction will accelerate a growth strategy based on reinforcing
    other business areas that complement its plasma derivative activity
  *Grifols will strengthen its footprint worldwide providing integrated
    solutions for blood and plasma donor centers from donation to transfusion
  *The transaction´s financing is fully underwritten, in the form of a US$1.5
    billion bridge loan fully subscribed in equal parts by Nomura, BBVA and
    Morgan Stanley

Grifols (MCE: GRF, MCE: GRF.P and NASDAQ: GRFS), a global healthcare company
and leading producer of plasma therapies, and Novartis (VX: NOVN, NYSE: NVS),
today announced that they have signed a definitive agreement whereby Grifols
will acquire the transfusion diagnostics unit of Novartis for a total amount
of US$1,675 million (€1,240 million).

(Logo: http://photos.prnewswire.com/prnh/20110304/PH59473LOGO )

The transaction is part of Grifols' growth strategy of complementing its range
of plasma protein therapies with other diagnostic products and services
(Diagnostic Division).

Grifols will expand its portfolio by including Novartis' diagnostic products
for transfusion medicine and immunology, including its highly innovative,
market-leading NAT technology (Nucleic Acid Amplification Techniques),
instrumentation and equipment for blood screening, specific software and
reagents. The assets acquired include patents, brands, licenses and royalties,
together with the production plant at Emeryville (California, United States)
and commercial offices in United States, Switzerland and Hong Kong (for the
Asia-Pacific region) among others.

This strategic operation will strengthen Grifols' Diagnostic Division,
particularly in United States with a very strong and specialized commercial
organization. It also diversifies Grifols' business by promoting an activity
area that complements the Bioscience Division (plasma proteins). Novartis'
diagnostic business, which focuses on guaranteeing the safety of blood
donations for transfusion or to be used in the plasma fractionating industry,
complements and extends Grifols' existing product range. Grifols will become a
vertically integrated company able to provide solutions for blood and plasma
donor centers, with the most complete product portfolio in the
immunohematology field: gel cards, multicard and the new genotyping technology
from Progenika.

Grifols will also benefit from the creation of a more efficient platform to
market a wider range of diagnostic products and services in the United States
and other countries, and will also optimize its after-sales resources.

According to Victor Grifols, President and CEO of Grifols: " The acquisition
of Novartis' diagnostic business is a step further into our vision to become a
world leader also in the diagnostics field. To achieve this we knew we needed
a significant presence in United States. We initiated the process in the
Bioscience area in 2003 with the acquisition of the ATC assets and continued
with the Talecris transaction in 2011. During the last two years the
Diagnostic Division has been preparing for this step, especially in the
immunohematolgy activities"

FINANCIAL DETAILS AND CLOSING CONDITIONS

Grifols will acquire Novartis' transfusion diagnostics unit for US$1,675
million (€1,240 million). The transaction will be structured through Grifols'
Diagnostic Division and a newly created 100% Grifols-owned subsidiary.

Grifols estimates pro-forma total annual revenues to approach US$1.0 billion
(€740 million) (including royalties) for its Diagnostic Division after the
closing of the operation.

As a result, the Diagnostic Division of Grifols would represent more than 20%
of the group's total income, compared to the current 4%, and the company would
accelerate its implementation of a new growth strategy based on promoting
complementary activity areas. As former Novartis employees are to be retained,
the transaction will also increase Grifols' workforce by approximately 550
employees.

The transaction´s financing is fully underwritten. A bridge loan for US$1.5
billion, has been fully subscribed in equal parts by Nomura, BBVA and Morgan
Stanley. The loan agreement does not include any financial restrictions with
respect to Grifols' dividends policy or investments. The acquisition has been
unanimously approved by the board of directors of both companies.

This acquisition will moderately increase leverage, which will be quickly
absorbed by resilient cash flow generation.

Grifols' net financial debt at the end of the third quarter of 2013 stood at
€2.4 billion, a successful deleverage track record from the Talecris
acquisition. This reflects strong results during the course of the year and
positive cash flows. As a result, the debt ratio fell to 2.6 times adjusted ^1
EBITDA at the end of the third quarter.

The transaction, requiring customary regulatory approvals, is expected to
close in the first half of 2014.

NOVARTIS' DIAGNOSTIC AREA COMPLEMENTS AND EXPANDS GRIFOLS' BUSINESS

Grifols' Diagnostic Division manufactures and develops instrumentation and
reagents in three fields: transfusion medicine, immunology and hemostasis.
Grifols also produces and distributes blood collection bags. The company is
one of the leading suppliers of diagnostic tests for transfusion such as blood
typing tests or donor-patient pre-transfusion compatibility tests. Its
products are used by hospital blood banks, transfusion centers and clinical
immunohematology laboratories.

Novartis Diagnostic business is focused on creating innovative solutions to
increase transfusion safety and improve medical outcomes, including preventive
screening and the prediction of health outcomes. Novartis Diagnostic products,
including instruments and assays, are based on the most innovative NAT methods
and used to test millions of blood donations around the world each year for
pathogens such as HIV (the AIDS virus,) hepatitis B and hepatitis C, and West
Nile Virus. More than 80 percent of the U.S. blood supply is tested on
Novartis Diagnostic systems to make sure they are safe for transfusion or use
in other blood products.

Advisors

Grifols' legal advisors were Osborne Clarke S.L.P. and Proskauer Rose LLP.
Nomura acted as financial advisor to Grifols.

About Grifols

Grifols is a global healthcare company with a 70-year legacy of improving
people's health and well being through the development of life-saving plasma
medicines, hospital pharmacy products and diagnostic technology for clinical
use.

As a leading producer of plasma medicines, Grifols has a presence in more than
100 countries and is the world leader in plasma collection, with 150 plasma
donation centers across the U.S. Grifols is committed to increasing patient
access to its life-saving plasma medicines through significant manufacturing
expansions and the development of new therapeutic applications of plasma
proteins. The company is headquartered in Barcelona, Spain and employs more
than 11,000 people worldwide.

In 2012, Grifols' sales exceeded €2,620 billion. The company's class A shares
are listed on the Spanish Stock Exchange, where they are part of the Ibex-35
(MCE: GRF). Its non-voting class B shares are listed on the Mercado Continuo
(MCE: GRF.P) and on the U.S. NASDAQ via ADRs (NASDAQ: GRFS). For more
information visit www.grifols.com

About Novartis

Novartis provides innovative healthcare solutions that address the evolving
needs of patients and societies. Headquartered in Basel, Switzerland, Novartis
offers a diversified portfolio to best meet these needs: innovative medicines,
eye care, cost-saving generic pharmaceuticals, preventive vaccines and
diagnostic tools, over-the-counter and animal health products. Novartis is the
only global company with leading positions in these areas. In 2012, the Group
achieved net sales of USD 56.7 billion, while R&D throughout the Group
amounted to approximately USD 9.3 billion (USD 9.1 billion excluding
impairment and amortization charges). Novartis Group companies employ
approximately 133,000 full-time-equivalent associates and operate in more than
140 countries around the world. For more information, please visit
http://www.novartis.com .

Disclaimer

This release contains "forward-looking statements" as defined in the Private
Securities Litigation Reform Act of 1995. The words "anticipate," "believe,"
"estimate," "expect," "intend," "will," "should" and similar expressions, as
they relate to us, are intended to identify forward-looking statements. These
statements reflect management's current beliefs, assumptions and expectations
and are subject to a number of factors that may cause actual results to differ
materially. These factors include, amongst others: the volatility in the
global economy; the risk that the future business operations of Novartis will
not be successful; the risk that we will not realize all of the anticipated
benefits from our acquisition of Novartis; the risk that customer retention
and revenue expansion goals for the Novartis transaction will not be met and
that disruptions from the Novartis transaction will harm relationships with
customers, employees and suppliers; the risk that unexpected costs will be
incurred; the outcome of litigation and regulatory proceedings to which we may
be a party; actions of competitors; changes and developments affecting our
industry; quarterly or cyclical variations in financial results; development
of new products and services; interest rates and cost of borrowing; our
ability to protect our intellectual property rights; our ability to maintain
and improve cost efficiency of operations, including savings from
restructuring actions; changes in foreign currency exchange rates; changes in
economic conditions, political conditions, trade protection measures,
licensing requirements and tax matters in the foreign countries in which we do
business; reliance on third parties for manufacturing of products and
provision of services.

This press release is not an offer to sell or the solicitation of an offer to
buy common stock, which is made only pursuant to a prospectus forming a part
of a registration statement, nor shall there be any sale of common stock in
any state in which such offer, solicitation or sale would be unlawful before
registration or qualification under the securities laws of any such state. The
Grifols shares have not been registered under the Securities Act of 1933 and
may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements. This document does not
constitute an offer or invitation to purchase or subscribe shares, in
accordance with the provisions of the Spanish Securities Market Law (Law
24/1988, of July 28, as amended and restated from time to time), Royal
Decree-Law 5/2005, of March 11, and/or Royal Decree 1310/2005, of November 4,
and its implementing regulations.

Website: http://www.grifols.com
Contact: Grifols, Raquel Lumbreras Lanchas, +34 659 57 21 85; Borja Gomez
Vazquez, +34 650 40 22 25, Grifols' press office (Spain)