9th Oct 2006 14:00
GlaxoSmithKline PLC09 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 toacquire CNS, the manufacturer of Breathe Right(R) nasal strips and FiberChoice(R) dietary fiber supplements for $37.50 per share in cash, valuingthe transaction at approximately $566 million. The merger considerationrepresents a premium of 31% over the trading price of CNS's common stock atclose of business on 6 October, 2006. The transaction, which is expected toclose by early 2007, is subject to customary conditions including CNSstockholder approval and antitrust clearance under the Hart-Scott-Rodino Act. CNS, based in Minneapolis, Minnesota, USA, reported through June 2006, 12-monthsales of $118.5 million, growth of 18% over the previous 12-month period ended30 June, 2005. The US market generates 86% of the company's sales. Breathe Rightbranded products are marketed in 27 countries. FiberChoice fiber supplements aremarketed solely in the US. Commenting on this acquisition, John Clarke, President, GSK Consumer Healthcare,said: "This outstanding business provides a great global growth opportunity forGSK. CNS is a well-managed company. Its two major brands, Breathe Right andFiberChoice, fit with our growth strategy and are great additions to ourportfolio. The opportunity for growth through geographic expansion and pipelineinnovation make this acquisition an exciting prospect." "This transaction will deliver excellent value to our shareholders," said MartiMorfitt, President and CEO of CNS. "I am proud of our achievements at CNS andthe success we have built around our brands, and am happy that our good workwill continue with GSK as these brands realize their worldwide potential. GSK'sprofessionalism and innovative culture, with their track record of successfullyintegrating brands and people, will ensure a smooth transition." Breathe Right strips are the leading nasal strip, and FiberChoice supplementsare a fast-growing line of dietary fiber supplements. Both brands are supportedby patents in the U.S. and key markets worldwide, and by scientific evidence fortheir product claims. The sales growth of Breathe Right and FiberChoice isdriven by consumer insights and a focused strategy that has been verysuccessful: Breathe Right has delivered 12% and FiberChoice 54% sales compoundannual growth rates, respectively, over the past three years. For GSK, thetransaction will be neutral to earnings in 2007, and accretive from 2008. The proposed transaction with GSK follows a review of potential acquirersconducted by CNS with the assistance of its financial advisor. Sawaya Segalas &Co., LLC acted as exclusive financial advisor to CNS in connection with thetransaction 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 thatopen nasal passages to offer better breathing. Breathe Right strips treatcongested breathing that is suffered by many consumers at some point during theyear, caused by colds (94% people/year) and allergies (69% people/year). (1) The FiberChoice family of products offers a line of fiber supplements in aconvenient tablet form with a 'Fiber for Health' positioning. FiberChoice is afast-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 andhealthcare companies - is committed to improving the quality of human life byenabling people to do more, feel better and live longer. For companyinformation, 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-knownbrands include the leading smoking cessation products, Nicoderm(R) CQ(R) andCommit(R); many medicine cabinet staples, including Panadol(R), Abreva(R),Aquafresh(R), Sensodyne(R) and Tums(R); and nutritional healthcare products suchas Lucozade(R), Horlicks(R) and Ribena(R). About CNS, Inc. CNS, based in Minneapolis, designs and markets consumer healthcare productsincluding Breathe Right(R) nasal strips and FiberChoice(R) dietary fibersupplements. The company focuses on products that address important consumerneeds within the self-care market, including better breathing and digestivehealth. Its common stock is listed on the Nasdaq National Market under theticker symbol "CNXS". More information about CNS and its products is availableat 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 ofregulatory or CNS stockholder approvals, future products or market growth, andany other statements regarding CNS' future expectations, beliefs, goals orprospects are forward-looking statements which are subject to risks anduncertainties. For a more complete list and description of such risks anduncertainties, refer to CNS' Annual Report on Form 10-K for the year ended 31March, 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 ExchangeCommission (the "SEC"). Actual results may differ materially from thosecontained in the forward-looking statements in this press release. You arecautioned not to place undue reliance on these forward-looking statements, whichspeak only as of the date of this press release. CNS undertakes no obligationand does not intend to update any forward-looking statements after the date ofthis 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 ReformAct of 1995, GlaxoSmithKline cautions investors that any forward-lookingstatements or projections made by GlaxoSmithKline, including those made in thisannouncement, are subject to risks and uncertainties that may cause actualresults to differ materially from those projected. Factors that may affect theGroup's operations are described under 'Risk Factors' in the Operating andFinancial Review and Prospects in GlaxoSmithKline's Annual Report 2005. Important Merger Information In connection with the proposed merger with GlaxoSmithKline plc, the Companywill file a proxy statement with the SEC. Stockholders and investors are advisedto read the proxy statement when it becomes available because it will containimportant information about the merger and the Company. Stockholders andinvestors may obtain a free copy of the proxy statement (when available) andother documents filed by the Company with the SEC at the SEC's web site atwww.sec.gov. Free copies of the proxy statement, once available, and theCompany's other filings with the SEC, may also be obtained from the Company atwww.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 filingsmay be obtained by directing a written request to CNS, Inc., 7615 Smetana Lane,Eden Prairie, Minnesota 55344, Attention: Samuel E. Reinkensmeyer or bytelephone at 952-229-1510. Participants in the Solicitation The Company and its directors, executive officers and other members of itsmanagement may be deemed to be soliciting proxies from the Company'sstockholders in favor of the merger. Investors and stockholders may obtain moredetailed information regarding the direct and indirect interests in the mergerof persons who may, under the rules of the SEC, be considered participants inthe solicitation of the Company's stockholders in connection with the merger byreading the preliminary and definitive proxy statements regarding the merger,which will be filed with the SEC. Information about the Company's directors andexecutive officers may be found in the Company's definitive proxy statementfiled with the SEC on 7 July, 2006. These documents will be available free ofcharge once available at the SEC's web site at www.sec.gov or by directing arequest to the Company as described above. Breathe Right and FiberChoice are registered trademarks of CNS, Inc. Commit, Abreva, Aquafresh, Panadol, Sensodyne, Tums, Lucozade, Horlicks andRibena are trademarks of GlaxoSmithKine. Nicoderm is a trademark ofSanofi-Aventis in the US and is used under license by GlaxoSmithKline asNicoderm 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 7002enquiries: 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 ExchangeRelated Shares:
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