Navamedic ASA (NO) - Initiates a New Strategic Phase - Navamedic ASA Completes the Acquisition of Vitaflo Scandinavia AB

LYSAKER, Norway, 5 October 2007: On 4 October, Navamedic ASA completed the acquisition of 100% of the shares in the Swedish pharmaceutical company Vitaflo Scandinavia AB, and takes the first step towards the creation of an international speciality pharmaceutical company.

To Navamedic, the acquisition of Vitaflo Scandinavia (Vitaflo) is the start of a new and exciting strategic phase. We aim to become an international speciality pharmaceutical company. Vitaflo, with its increasing product portfolio in selected growth areas gives us a strong platform to build upon, says CEO Øyvind W. Brekke in Navamedic ASA.

On 4 October 2007, with a contribution in kind of 40% of the shares in Vitaflo, the Board of Directors in Navamedic resolved to issue 672.213 new shares in Navamedic to the seller of Vitaflo, POA Consulting Scandinavia AB, to a price of NOK 44,90 per share. The private placement was resolved according to the letter of attorney given by the general assembly 6 September 2007. The new shares were issued by the completion of the acquisition.

With the completion of the acquisition, the conditions related to the share issue and private placement in Navamedic ASA on a total of 890,868 new shares to a subscription price of NOK 44.90 per share are lifted. With the addition of the private placement of 672,213 shares resolved 4 October 2007, the new share capital of 7,537,051 distributed on 7,537,051 shares with a nominal value of NOK 1 per share is expected to be registered in Foretaksregisteret 8 October 2007. Trading of the new shares is expected on Oslo Stock Exchange from 8 October 2007.

Vitaflo markets a wide portfolio of own and in-licensed products in Norway, Denmark, Sweden, Finland, Holland, and Iceland, and has further growth abmitions. The portfolio consists of 44 products in 10 knowledge areas,whereof Metabolic Diseases, Oral Medicine and Female Care are expected to be the most important going forward.

- Together with Vitaflo, we can make the Scandinavian and European markets more accessible for pharmaceutical companies overseas and can build a larger portfolio through in-licensing. Together, we have the necessary competence to take products through the registration process and make an effective product placement in markets through own market access in six countries, and a wide network of marketing and distribution partners, says Mr. Brekke.

The new strategy and the acquisition of Vitaflo does not change Navamedic`s ambitions in the glucosamine market, where the focus on Glucomed will continue with full intensity through existing distributions agreements.

Revenues in Vitaflo Scandinavia AB have grown by 50-60% per year in the period 2003-2006. In 2006, revenues reached SEK 34.9 million with EBITDA of SEK 4.1 million. For 2007, revenues of minimum SEK 45 million are expected, with EBITDA of minimum SEK 6.5 million On a pro forma basis, including Vitaflo results for the full year, Navamedic expects to a positive EBITDA for 2007.

After the registration of these capital increases, POA Consulting Scandinavia AB will own 672.213 shares in Navamedic ASA, corresponding to 8,92% of the 7.537.051 shares in the company. POA Consulting Scandinavia AB is owned by among others Roland Sandström (56,1%) and Tina Madsen Sandström (9,75%). Roland Sandström was 6 September 2007 elected as a board member in Navamedic ASA, effective from 4 October 2007. POA Consulting Scandinavia AB's shares in Navamedic ASA are subject to a lock-up which is outlined in the prospectus dated 11 September 2007.

Navamedic paid SEK 90 million for Vitaflo Scandinavia AB (enterprise value), of which SEK 54 million in cash and SEK 36 million in the Navamedic shares resolved issued 4 October 2007. The purchase agreement consists of an earn-out model based on achieved EBITDA for Vitaflo Scandinavia AB in 2007.

For further information, please contact:

Øyvind W. Brekke, CEO Navamedic ASA E-mail: oyvind.brekke@navamedic.com Office: +47 67 11 25 40 Mobile: +47 91 19 81 64

Bernt-Olav Røttingsnes, CFO/IRO Navamedic ASA E-mail: bor@navamedic.com Office: +47 67 11 25 44 Mobile: +47 91 34 70 21

 

Posted: October 2007


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