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Canada’s Axcan Pharma bought by TPG Capital for USD1.3bn

Axcan Pharma, a Canadian-based pharmaceutical company that focuses on the treatment of gastrointestinal disorders, has agreed to be acquired by TPG Capital and its affiliates in an all-cas

Axcan Pharma, a Canadian-based pharmaceutical company that focuses on the treatment of gastrointestinal disorders, has agreed to be acquired by TPG Capital and its affiliates in an all-cash transaction with a total value of  USD1.3bn.

Under the terms of the transaction, TPG Capital and its affiliates will acquire all of the common shares of Axcan for an offer price of USD23.35 per common share. The purchase price represents a 28 per cent premium over the average trading price of Axcan’s common shares on November 28, 2007.

Axcan anticipates that the transaction will be completed in the first calendar quarter of 2008.

"This transaction provides compelling value and certainty to our shareholders. Our board  believes that this is the best way to maximize value while providing the company with long-term partners who share our commitment to patients and employees," says Frank Verwiel  president and chief executive of Axcan.

"TPG’s investment recognizes the critical contribution that Axcan’s professionals have made over the past 25 years. As an independent, private company with strong backing from TPG, we will be able to continue our focus on the development of innovative, high-quality medical products and become an even stronger partner to health professionals in the gastrointestinal arena."_

"We are pleased to invest in the leading pharmaceutical company specializing in the treatment of gastrointestinal illnesses. We look forward to supporting this excellent management team and workforce in growing the company’s global distribution capabilities and products. Axcan will be an important addition to TPG Capital’s broad healthcare portfolio," says Todd Sisitsky, partner, TPG Capital.

The transaction will be financed through a combination of equity contributed by TPG Capital and its affiliates and debt financing that has been committed by Bank of America and HSBC.

The arrangement agreement contains customary provisions including the payment of a break-up fee in the event of termination in certain circumstances. Following the completion of the transaction, the company’s stock will be de-listed and no longer traded publicly. The firm’s headquarters will remain in Quebec, Canada.

Merrill Lynch is financial adviser to Axcan. Stikeman, Elliott, Latham & Watkins are legal counsel to Axcan. Bank of America is providing financial advice to TPG, and Ropes & Gray and Davies Ward Phillips & Vineberg are providing legal advice to TPG.

Based in Mont-Saint-Hilaire, Quebec, Axcan is a leading multinational specialty pharmaceutical company focused on gastroenterology. The company develops and markets a broad line of prescription products to treat a range of gastrointestinal diseases and disorders such as inflammatory bowel disease, irritable bowel syndrome, cholestatic liver diseases, and complications related to pancreatic insufficiency. Axcan’s products are marketed by its own specialised sales forces in North America and Europe. Its common shares are listed on the Nasdaq Global Market and on the Toronto Stock Exchange.

TPG Capital is the global buy-out group of TPG, a private investment firm founded in 1992, with more than USD35bn of assets under management and offices in San Francisco, London, Hong Kong, New York, Minneapolis, Fort Worth, Melbourne, Menlo Park, Moscow, Mumbai, Beijing, Shanghai, Singapore and Tokyo. TPG Capital has extensive experience with global public and private investments executed through leveraged buyouts, recapitalizations, spin-outs, joint ventures and restructurings.

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