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UNDER
THE SECURITIES ACT OF 1933
Spain | 2834 | Not applicable | ||
(Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Parc de Negocis Can Sant Joan
Sant Cugat del Vallès 08174
Barcelona, Spain
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
General Counsel
Grifols, Inc.
2410 Lillyvale Ave
Los Angeles, CA90032-3514
(323) 227-7540
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Proskauer Rose LLP 1585 Broadway New York, NY 10036 (212) 969-3000 Attention: Julie M. Allen, Esq. Peter Samuels, Esq. | Osborne Clarke S.L.P. Avenida Diagonal, 477 Planta 20, 08036 Barcelona, Spain Tel: +34 93 419 1818 Attention: Tomás Dagá and Raimon Grifols | Talecris Biotherapeutics Holdings Corp. P.O. Box 110526 4101 Research Commons 79 T.W. Alexander Drive Research Triangle Park, NC 27709 Attention: John F. Gaither, Jr., Executive Vice President, General Counsel and Secretary | Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019 (212) 403-1000 Attention: Mark Gordon, Esq. |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||||||||||
Title of Each Class | Amount to be | Offering | Aggregate | Registration | ||||||||||||||||
of Securities to be Registered | Registered | Price per Share | Offering Price(2) | Fee | ||||||||||||||||
Non-Voting (Class B) Ordinary Shares | 87,000,000(1 | ) | N/A | $ | 729,586,362.27 | $ | 52,019.51 | (3)(4) | ||||||||||||
(1) | Represents the maximum number of non-voting ordinary shares currently estimated to be deliverable to the stockholders of Talecris, upon consummation of the transaction described herein. |
(2) | Estimated solely for the purpose of calculating the registration fee required by Section 6(b) of the Securities Act and computed pursuant to Rule 457(f)(1) and (f)(3) and 457(c) of the Securities Act. The proposed maximum aggregate offering price of the registrant’s non-voting ordinary shares was calculated based upon the market value of shares of Talecris common stock (the securities to be cancelled in the transaction) in accordance with Rule 457(c) under the Securities Act as follows: (i) the product of (A) $24.41, the average of the high and low prices per share of the Talecris common stock on NASDAQ on November 1, 2010 and (B) 134,858,847, the maximum possible number of shares of Talecris common stock which may be cancelled and exchanged in the transaction, less (ii) the estimated amount of cash that would be paid by Grifols in exchange for such maximum possible number of shares of Talecris common stock (which equals $2,562,318,093.00). |
(3) | Computed in accordance with Rule 457(f) of the Securities Act at a rate equal to $71.30 per $1,000,000 of the proposed maximum aggregate offering price. |
(4) | A fee of $31,699.88 was previously paid. Accordingly, $20,319.63 is paid herewith. |
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The information in this joint proxy statement/prospectus is not complete and may be changed. Grifols may not issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. The joint proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. |
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Chairman of the Board of Directors and Chief Executive Officer
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4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Secretary
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4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Attn.: Investor Relations
Tel.:(919) 316-2300
Email:investor.relations@talecris.com
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• | ‘‘$” and “U.S. dollar” each refer to the U.S. dollar; and | |
• | ‘‘€” and “euro” each refer to the euro, the single currency established for members of the European Economic and Monetary Union since January 1, 1999. |
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STOCKHOLDERS AND THE TRANSACTION
Q: | When and where will the Talecris special meeting be held? | |
A. | The Talecris special meeting will take place at , on , 2010, at a.m., local time. | |
Q: | Who can attend and vote at the Talecris special meeting? | |
A: | Only holders of record of Talecris common stock at the close of business on the record date, , 2010, are entitled to notice of and to vote at the Talecris special meeting. As of the record date, there were shares of Talecris common stock outstanding and entitled to vote at the Talecris special meeting, held by holders of record. Each holder of Talecris common stock is entitled to one vote for each share of Talecris common stock owned as of the record date. | |
Q: | What are Talecris stockholders voting to approve and why is this approval necessary? | |
A: | Talecris stockholders are voting on a proposal to adopt the merger agreement (including the reincorporation merger and the Talecris-Grifols merger contemplated by the merger agreement). Talecris stockholder adoption of the merger agreement is required by Delaware law and is a condition to the completion of the transaction. Talecris stockholders are also voting on a proposal to adjourn the Talecris special meeting, if necessary, to permit further solicitation of proxies if there are not sufficient votes at the time of the Talecris special meeting in favor of the proposal to adopt the merger agreement. The approval by Talecris stockholders of this proposal, which is referred to as the Talecris meeting adjournment proposal, is not a condition to the completion of the transaction. | |
Q: | How does the Talecris Board of Directors recommend that Talecris stockholders vote? | |
A: | After careful consideration, and upon the recommendation of a special committee of the Talecris Board of Directors, which is referred to as the Talecris special committee, composed solely of directors independent of both Talecris and Talecris Holdings (Talecris’ largest stockholder), the Talecris Board of Directors unanimously approved the merger agreement and determined that entry into the merger agreement is advisable and in the best interests of Talecris and its stockholders. Accordingly, the Talecris Board of Directors unanimously recommends that Talecris stockholders vote “FOR” the adoption of the merger agreement and “FOR” the Talecris meeting adjournment proposal. |
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Q: | What vote of Talecris stockholders is required to adopt the merger agreement and the Talecris meeting adjournment proposal? | |
A: | In accordance with Delaware law and Talecris’ governing documents, Talecris stockholder adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Talecris common stock entitled to vote on the matter. The approval of the Talecris meeting adjournment proposal requires the affirmative vote of the holders of a majority of the shares of Talecris common stock present in person or represented by proxy at the Talecris special meeting, whether or not a quorum is present. |
Q: | Do I have the ability to seek appraisal of my Talecris shares? |
A: | The merger agreement provides you with the ability to dissent from the transaction and seek appraisal of your shares in accordance with Section 262 of the Delaware General Corporation Law, which is referred to as the DGCL. If you choose to seek appraisal and comply with applicable requirements under the DGCL, you will forego the merger consideration and instead receive a cash payment equal to the fair value of your shares of Talecris common stock in connection with the transaction. Fair value will be determined by a court following an appraisal proceeding. You will not know the appraised fair value of your shares at the time you must elect whether to seek appraisal. The ultimate amount you receive in an appraisal proceeding may be more or less than, or the same as, the amount you would have received under the merger agreement. A detailed description of the appraisal rights available to you and procedures required to exercise appraisal rights is included in the section entitled “The Transaction — Appraisal or Dissenters’ Rights” beginning on page 134. Due to the complexity of these procedures, the Talecris stockholders who are considering exercising such rights are encouraged to seek the advice of legal counsel. The full text of Section 262 of the DGCL is attached as Annex L to this joint proxy statement/prospectus. |
Q: | What constitutes a quorum? | |
A: | In accordance with Talecris’ amended and restated bylaws, which are referred to as Talecris’ bylaws, holders of a majority of the shares of stock issued and outstanding and entitled to vote at any meeting of stockholders must be present in person or by proxy in order to hold the special meeting and conduct business. This is called a quorum. Shares of Talecris common stock are counted as present at the special meeting if the holder of such shares (1) is present and votes in person at the special meeting or (2) has properly submitted a proxy card by mail, telephone or Internet. Abstentions will be counted as present for purposes of determining a quorum. | |
Q: | What should Talecris stockholders do now in order to vote on the proposals being considered at the Talecris special meeting? | |
A: | Stockholders of record of Talecris as of the record date may submit a proxy in any of the following three ways: | |
• By Internet, following the instructions to vote online atwww.voteproxy.comor the proxy card; | ||
• By telephone, using the telephone number printed on the proxy card; or | ||
• By mail, by completing, signing, dating and returning the enclosed proxy card in the accompanying pre-addressed postage-paid envelope. | ||
Submitting a proxy means that you give someone else the right to vote your shares in accordance with your instructions. In this way, you ensure that your vote will be counted even if you are unable to attend the Talecris special meeting. If you execute your proxy, but do not include specific instructions on how to vote, the individuals named as proxies will vote your shares as follows: | ||
• “FOR” the adoption of the merger agreement; and | ||
• “FOR” the Talecris meeting adjournment proposal. | ||
If you hold Talecris shares in “street name,” which means your shares are held of record by a broker, bank or nominee, you must provide the record holder of your shares with instructions on how to vote your shares. Please refer to the voting instruction card used by your broker, bank or nominee to see if you may submit voting instructions using the Internet or telephone. |
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Additionally, you may also vote in person by attending the Talecris special meeting. If you plan to attend the Talecris special meeting and wish to vote in person, you will be given a ballot at the Talecris special meeting. Please note, however, that if your shares are held in “street name,” and you wish to vote in person at the Talecris special meeting, you must bring a proxy from the record holder of the shares authorizing you to vote at the Talecris special meeting. Whether or not you plan to attend the Talecris special meeting, you are encouraged to grant your proxy as described in this joint proxy statement/prospectus. | ||
Q: | Will my vote be kept confidential? | |
A: | Yes. Talecris has procedures to ensure that, regardless of whether Talecris stockholders vote by Internet, telephone or mail, or in person, all proxies, ballots and voting tabulations that identify Talecris stockholders are kept permanently confidential, except as disclosure may be required by federal or state law or as expressly permitted by a Talecris stockholder. | |
Q: | What are broker non-votes? | |
A: | Broker non-votes occur when nominees, such as banks and brokers holding shares on behalf of beneficial owners, do not receive voting instructions from the beneficial owners at least ten days before the meeting and do not have discretion to vote on a specific matter. | |
Q: | What will happen if I abstain from voting, fail to vote or do not direct how to vote on my proxy? | |
A: | The failure of a Talecris stockholder to vote or to instruct his or her broker, bank or nominee to vote if his or her shares are held in “street name” may have a negative effect on the ability of Talecris to obtain the number of votes necessary for approval of the proposals. | |
An abstention or the failure of a Talecris stockholder to vote or to instruct his or her broker, bank or nominee to vote if his or her shares are held in “street name” will have the same effect as voting against the adoption of the merger agreement. An abstention will have the same effect as a vote against the Talecris meeting adjournment proposal, however a failure to vote or a broker non-vote will have no effect on such proposal. All properly signed proxies that are received prior to the Talecris special meeting and that are not revoked will be voted at the Talecris special meeting according to the instructions indicated on the proxies or, if no direction is indicated, they will be voted “FOR” the adoption of the merger agreement and “FOR” the Talecris meeting adjournment proposal. | ||
Q: | Are there risks associated with the transaction that I should consider in deciding how to vote? | |
A: | Yes. There are a number of risks related to the transaction, risks related to the combined company if the transaction is completed and risks relating to each of Grifols and Talecris that are discussed in this joint proxy statement/prospectus. | |
These risks associated with the transaction, with owning the Grifols non-voting shares, and with each of Grifols and Talecris are explained in detail in the section entitled “Risk Factors.” | ||
Q: | When do you currently expect to complete the transaction? | |
A: | We expect to complete the transaction in the fourth quarter of 2010 or in the first quarter of 2011. However, Talecris and Grifols cannot assure you when or if the transaction will occur. Talecris and Grifols must first obtain the required approvals of the Talecris stockholders and the Grifols shareholders and the necessary regulatory approvals. | |
Q: | Can I change my vote after I have delivered my proxy? | |
A: | Yes. If you are a holder of record, you can change your vote at any time before your proxy is voted at the Talecris special meeting by: | |
• delivering a signed written notice of revocation to the Secretary of Talecris at: | ||
Talecris Biotherapeutics Holdings Corp. 4101 Research Commons 79 T.W. Alexander Drive Research Triangle Park, North Carolina 27709 Attn.: Secretary |
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• submitting another proxy bearing a later date (in any of the permitted forms); or | ||
• attending and casting a ballot in person at the Talecris special meeting, although your attendance alone will not revoke your proxy. | ||
If your shares are held in a “street name” account, you must contact your broker, bank or other nominee to change your vote. | ||
Q: | Who will count the vote? | |
A: | Representatives of American Stock Transfer & Trust Company LLC will tabulate the votes and act as the Inspector of Election at the Talecris special meeting. | |
Q: | What should Talecris stockholders do if they receive more than one set of voting materials? | |
A: | You may receive more than one set of voting materials, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each proxy card and voting instruction card that you receive. | |
Q: | Should Talecris stockholders send in their Talecris stock certificates now? | |
A: | No. Please DO NOT send your Talecris common stock certificates with your proxy card. After the transaction is completed, Talecris stockholders will be sent written instructions for exchanging their shares of Talecris common stock for the merger consideration. | |
Q: | Who pays for the cost of proxy preparation and solicitation? | |
A: | Talecris will pay for the cost of proxy preparation and solicitation, including the reasonable charges and expenses of brokers, banks or other nominees for forwarding proxy materials to street name holders. | |
Talecris may solicit proxies by Internet and mail. Moreover, each of Talecris’ and Grifols’ directors, officers and regular employees may solicit proxies by telephone, facsimile or personally. These individuals will receive no additional compensation for their services other than their regular salaries or fees, if any. |
Q: | Who can help answer my questions? |
A: | If you have any questions about the transaction or how to submit your proxy, or if you need additional copies of this joint proxy statement/prospectus, the enclosed proxy card or voting instructions, you should contact: |
4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Attn.: Investor Relations
Tel.:(919) 316-2300
Email:investor.relations@talecris.com
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Category | Talecris Key Products | Talecris Indications | ||
IVIG | Gamunex IVIG | U.S., Canada and EU — PI,ITP, CIDP. Canada and EU — Post Bone Marrow Transplant, Pediatric HIV Infection. | ||
EU only — Kawasaki Disease, Guillain Barre Syndrome, Chronic Lymphocytic Leukemia, Multiple Myeloma | ||||
A1PI | Prolastin-C A1PI Prolastin A1PI | A1PI Deficiency related emphysema | ||
Fraction V (Albumin and PPF) | Plasbumin-5 (Human) 5% USP Plasbumin-20 (Human) 25% USP Plasmanate, Plasma Protein Fraction 5% USP | Plasma expanders, severe trauma, acute liver and kidney failures | ||
Factor VIII | Koate DVI | Hemophilia A | ||
Antithrombin III | Thrombate III | Hereditary antithrombin III deficiency | ||
Hyperimmunes | GamaStan, HyperHepB, HyperRho, HyperRab, HyperTet | Hepatitis A, Hepatitis B, Rabies, RH Sensitization, Tetanus |
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• | Voting Rights: Holders of the Grifols non-voting shares generally will not have voting rights, except with respect to certain extraordinary matters. | |
• | Preferred Dividend: Each Grifols non-voting share will entitle its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each fiscal year that such share is outstanding equal to €0.01 per Grifols non-voting share. In addition to any preferred dividend, each Grifols non-voting share will be entitled to receive the same dividend and other distributions as one Grifols ordinary share. | |
• | Redemption Rights: Each holder of Grifols non-voting shares will have redemption rights with respect to such shares, in connection with certain tender offers launched and settled for all or part of the share capital of Grifols, subject to the terms and exceptions as set forth in the section entitled “Description of Grifols’ Share Capital — Grifols Non-Voting Shares (Class B Shares) — Redemption Rights.” | |
• | Liquidation Rights: Each Grifols non-voting share will entitle its holder to receive, upon thewinding-up and liquidation of Grifols, an amount equal to the sum of (i) the nominal value of such Grifols non-voting share, and (ii) the share premium paid up for such Grifols non-voting share when it was subscribed for. Each Grifols non-voting share entitles its holder to receive, in addition to the liquidation amount, the same liquidation amount that is paid to each Grifols ordinary share. Grifols will pay the liquidation amount to the holders of the Grifols non-voting shares before any amount on account of liquidation is paid to the holders Grifols ordinary shares. | |
• | Subscription Rights: The preferential subscription right and the free allotment right of the Grifols non-voting shares will only be for new Grifols non-voting shares or for instruments giving the right to purchase, convert, subscribe or otherwise receive Grifols non-voting shares, in those capital increases or issuances which meet the following three requirements (i) the issuance of Grifols ordinary shares and the Grifols non-voting shares is in the same proportion of the share capital of Grifols as they represent at the time the resolution on the capital increase is passed; (ii) grants preferential subscription rights or free allotment rights, as applicable, to the Grifols non-voting shares for the Grifols non-voting shares are under the same terms as the preferential subscription rights or free allotment rights, as applicable, granted to the Grifols ordinary shares for the Grifols ordinary shares; and (iii) no other shares or securities are issued. |
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• | solicit, initiate or knowingly encourage or facilitate the making or consummation of any proposal or offer from any third party relating to an acquisition of Talecris, any of which is referred to as a Talecris takeover proposal; |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any non-public information in connection with, or otherwise cooperate with, any Talecris takeover proposal; | |
• | waive, terminate, modify or fail to enforce any provision of any “standstill” or similar obligation of any person other than Grifols; | |
• | take any action to make the provisions of any anti-takeover statute or regulation or anti-takeover provisions in Talecris’ organizational documents inapplicable to any Talecris takeover proposal; or | |
• | resolve, propose or agree to do any of the foregoing actions. |
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• | solicit, initiate or knowingly encourage or facilitate the making or consummation of any proposal or offer from any third party relating to an acquisition of Grifols, any of which is referred to as a Grifols alternative proposal; | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any non-public information in connection with, or otherwise cooperate with, any Grifols alternative proposal; | |
• | approve, adopt or recommend, or publicly propose to approve, adopt or recommend a merger agreement or similar contract with respect to a Grifols alternative proposal; or |
• | resolve, propose or agree to do any of the foregoing actions. |
• | the adoption of the merger agreement by the holders of a majority of the outstanding shares of Talecris common stock; | |
• | the approval by the Grifols shareholders of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders; |
• | the absence of any temporary restraining order, or preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction that prohibits or prevents the completion of the Talecris-Grifols merger; the absence of any law enacted, issued, enforced, entered or promulgated that prohibits or makes illegal the consummation of any of the transactions contemplated by the merger agreement; |
• | the expiration or termination of all applicable waiting periods under (1) the HSR Act and (2) the German Antitrust Act with respect to the transactions contemplated by the merger agreement; | |
• | the receipt of all applicable approvals and authorizations under the Spanish Competition Law with respect to the transactions contemplated by the merger agreement, whether implicitly through the expiration of any waiting periods or explicitly by resolution; and | |
• | the effectiveness under the Securities Act of the registration statement onForm F-4 of which this joint proxy statement/prospectus forms a part, and the absence of any stop order or proceedings initiated by the SEC for that purpose. |
• | the truth and correctness of Grifols’ representations and warranties, subject to specified materiality thresholds, as of the date of the merger agreement and as of the closing date of the transaction; | |
• | the performance or compliance, in all material respects, of Grifols and Grifols, Inc. of their obligations under the merger agreement at or prior to the consummation of the transaction; | |
• | the approval and registration of a prospectus relating to the Grifols non-voting shares or of such other documentation required under applicable Spanish law; | |
• | the valid issuance of the Grifols non-voting shares; | |
• | the granting before a Spanish public notary, and registration by the Commercial Registry (Registro Mercantil) of Barcelona, of the necessary deeds in connection with the issuance of the Grifols non-voting shares and the amendments of the Grifols’ ByLaws (estatutos), which is referred to as Grifols’ ByLaws, required for such issuance; and |
• | the admission of the Grifols non-voting shares for listing on the Spanish Stock Exchanges, and quotation on the Automated Quotation System and the approval for listing on NASDAQ of the Grifols non-voting shares in the form of Grifols new ADSs, evidenced by ADRs, subject to official notice of issuance. |
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• | the truth and correctness of Talecris’ representations and warranties, subject to specified materiality thresholds, as of the date of the merger agreement and as of the closing date of the transaction; |
• | the performance or compliance, in all material respects, of Talecris of its obligations under the merger agreement at or prior to the consummation of the transaction; |
• | the delivery by Stream Merger Sub of the resignation of each member of its Board of Directors, effective as of the closing of the Talecris-Grifols merger; and |
• | either: |
• | the aggregate number of qualifying dissenting shares does not exceed 15% of the total number of issued and outstanding Talecris shares not held by Talecris specified affiliated stockholders, or |
• | if the aggregate number of qualifying dissenting shares exceeds this 15% threshold, Talecris Holdings agrees to indemnify Grifols for the total incremental cost (by which the appraised fair value exceeds the value of the merger consideration), if any, for the dissenting shares exceeding the 15% threshold (calculated as described in the section entitled “The Transaction — Agreements with Respect to Appraisal or Dissenting Shares.”); |
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• | the transaction does not occur on or before the outside date (currently, March 6, 2011 but possibly extendable to September 6, 2011); | |
• | a final, non-appealable order, injunction or decree permanently enjoining or prohibiting either the reincorporation merger or the Talecris-Grifols merger has been issued by a court or other governmental entity of competent jurisdiction; | |
• | the Talecris special meeting concludes without the adoption of the merger agreement by the Talecris stockholders; or |
• | the Grifols shareholder meeting concludes without the approval of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders (for a description of such matters, see the section entitled “The Merger Agreement — Conditions to Complete the Transaction” beginning on page 165) by the Grifols shareholders. |
• | Talecris breaches its representations, warranties or covenants, which breach would result in a failure of the closing condition concerning the accuracy of Talecris’ representations and warranties and Talecris’ compliance with its obligations under the merger agreement, and such breach is not cured or is not curable by the outside date; | |
• | prior to the adoption of the merger agreement by Talecris stockholders, the Talecris Board of Directors, in response to a superior proposal or an intervening event, changes its recommendation that the Talecris stockholders adopt the merger agreement; or | |
• | Talecris Holdings breaches the representation, warranties, covenants and agreements of the Talecris voting agreement with the result that Talecris is unable to comply in all material respects with its obligations to call the Talecris special meeting and solicit the approval of the Talecris stockholders of the adoption of the merger agreement. |
• | Grifols breaches its representations, warranties or covenants which breach would result in a failure of the closing condition concerning the effectiveness of the Form F-4 or any of the additional closing conditions for Talecris’ benefit (for a description of such conditions, see the section entitled “The Merger Agreement — Conditions to Complete the Transaction”), and such breach or failure to perform is not cured or is not curable by the outside date; | |
• | prior to approval by the Grifols shareholders of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders, the Grifols Board of Directors changes its recommendation that the Grifols shareholders approve such matters; or | |
• | one or more of the Grifols shareholders who are parties to a Grifols voting agreement breaches the representation, warranties, covenants and agreements of its voting agreement with the result that Grifols is unable to comply in all material respects with its obligations to call the Grifols shareholders meeting and solicit the approval of the Grifols shareholders of the proposal to approve the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders. |
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As of December 31, | As of June 30, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |||||||||||||||||||
(Thousands of euros) | (Unaudited) | |||||||||||||||||||||||
(Thousands of euros) | ||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||
Goodwill | 117,115 | 150,820 | 150,243 | 158,567 | 174,000 | 201,317 | ||||||||||||||||||
Other intangible assets | 48,718 | 60,850 | 57,223 | 57,756 | 69,385 | 77,611 | ||||||||||||||||||
Total intangible assets | 165,833 | 211,670 | 207,466 | 216,323 | 243,385 | 278,928 | ||||||||||||||||||
Property, plant and equipment | 186,621 | 184,993 | 201,332 | 301,009 | 371,705 | 423,096 | ||||||||||||||||||
Investments in equity accounted investees | 210 | 253 | 243 | 374 | 383 | 1,196 | ||||||||||||||||||
Non-current financial assets | 2,196 | 2,012 | 891 | 1,636 | 3,731 | 8,188 | ||||||||||||||||||
Deferred tax assets | 30,529 | 41,452 | 34,110 | 34,297 | 33,395 | 33,859 | ||||||||||||||||||
Total non-current assets | 385,389 | 440,380 | 444,042 | 553,639 | 652,599 | 745,267 | ||||||||||||||||||
Current assets | ||||||||||||||||||||||||
Inventories | 249,545 | 235,475 | 270,659 | 373,098 | 484,462 | 545,277 | ||||||||||||||||||
Trade and other receivables | ||||||||||||||||||||||||
Trade receivables | 133,543 | 173,053 | 174,351 | 186,324 | 207,840 | 194,259 | ||||||||||||||||||
Other receivables | 22,011 | 22,588 | 28,624 | 43,443 | 39,540 | 41,574 | ||||||||||||||||||
Current income tax assets | 3,606 | 3,710 | 2,402 | 5,428 | 7,802 | 24,337 | ||||||||||||||||||
Trade and other receivables | 159,160 | 199,351 | 205,377 | 235,195 | 255,182 | 260,170 | ||||||||||||||||||
Other current financial assets | 661 | 6,232 | 7,600 | 6,680 | 8,217 | 8,547 | ||||||||||||||||||
Other current assets | 4,072 | 5,353 | 6,201 | 5,259 | 7,345 | 11,776 | ||||||||||||||||||
Cash and cash equivalents | 22,856 | 26,883 | 5,690 | 6,368 | 249,372 | 350,140 | ||||||||||||||||||
Total current assets | 436,294 | 473,294 | 495,527 | 626,600 | 1,004,578 | 1,175,910 | ||||||||||||||||||
Total Assets | 821,683 | 913,674 | 939,569 | 1,180,239 | 1,657,177 | 1,921,177 | ||||||||||||||||||
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As of December 31, | As of June 30, | |||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2010 | |||||||||||||||||||
(Thousands of euros) | (Unaudited) | |||||||||||||||||||||||
(Thousands of euros) | ||||||||||||||||||||||||
EQUITY AND LIABILITIES | ||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||
Share capital | 70,169 | 106,532 | 106,532 | 106,532 | 106,532 | 106,532 | ||||||||||||||||||
Reserves | 1,508 | 284,092 | 316,440 | 369,471 | 436,705 | 525,489 | ||||||||||||||||||
Own shares | — | — | (28,893 | ) | (33,087 | ) | (677 | ) | (1,927 | ) | ||||||||||||||
Interim dividend | — | — | — | — | (31,960 | ) | 0 | |||||||||||||||||
Profit for the year attributable to the Parent | 25,556 | 45,394 | 87,774 | 121,728 | 147,972 | 66,408 | ||||||||||||||||||
Total equity | 97,233 | 436,018 | 481,853 | 564,644 | 658,572 | 696,502 | ||||||||||||||||||
Available-for-sale financial assets | 95 | (52 | ) | (152 | ) | (158 | ) | — | — | |||||||||||||||
Cash flow hedges | — | — | — | — | (1,948 | ) | (1,849 | ) | ||||||||||||||||
Translation differences | (41,502 | ) | (68,022 | ) | (98,516 | ) | (84,457 | ) | (90,253 | ) | (16,825 | ) | ||||||||||||
Other comprehensive income | (41,407 | ) | (68,074 | ) | (98,668 | ) | (84,615 | ) | (92,201 | ) | (18,674 | ) | ||||||||||||
Equity attributable to the Parent | 55,826 | 367,944 | 383,185 | 480,029 | 566,371 | 677,828 | ||||||||||||||||||
Minority interest | 121 | 408 | 981 | 1,250 | 12,157 | 12,972 | ||||||||||||||||||
Total Equity | 55,947 | 368,352 | 384,166 | 481,279 | 578,528 | 690,800 | ||||||||||||||||||
Grants | 2,442 | 4,819 | 4,545 | 2,353 | 2,311 | 2,309 | ||||||||||||||||||
Provisions | 782 | 902 | 999 | 3,045 | 1,232 | 1,283 | ||||||||||||||||||
Non-current financial liabilities | ||||||||||||||||||||||||
Loans and borrowings, bonds and other marketable securities | 189,994 | 198,329 | 178,425 | 311,513 | 703,186 | 742,106 | ||||||||||||||||||
Other financial liabilities | 278,009 | 12,646 | 11,064 | 12,542 | 12,552 | 12,075 | ||||||||||||||||||
Total non-current financial liabilities | 468,003 | 210,975 | 189,489 | 324,055 | 715,738 | 754,181 | ||||||||||||||||||
Deferred tax liabilities | 42,104 | 45,862 | 43,794 | 51,969 | 60,325 | 65,029 | ||||||||||||||||||
Total non-current liabilities | 513,331 | 262,558 | 238,827 | 381,422 | 779,606 | 822,802 | ||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||
Provisions | 1,245 | 3,890 | 3,957 | 3,830 | 4,702 | 4,460 | ||||||||||||||||||
Current financial liabilities | ||||||||||||||||||||||||
Loans and borrowings, bonds and other marketable securities | 99,514 | 138,123 | 177,540 | 147,547 | 113,991 | 146,157 | ||||||||||||||||||
Other financial liabilities | 43,010 | 31,583 | 9,555 | 9,685 | 12,230 | 56,930 | ||||||||||||||||||
Total current financial liabilities | 142,524 | 169,706 | 187,095 | 157,232 | 126,221 | 203,087 | ||||||||||||||||||
Trade and other payables | ||||||||||||||||||||||||
Suppliers | 70,556 | 67,401 | 90,790 | 107,613 | 120,909 | 127,720 | ||||||||||||||||||
Other payables | 15,629 | 23,282 | 11,396 | 9,068 | 17,832 | 16,296 | ||||||||||||||||||
Current income tax liabilities | 10,431 | 4,345 | 3,770 | 16,362 | 3,258 | 23,391 | ||||||||||||||||||
Total trade and other payables | 96,616 | 95,028 | 105,956 | 133,043 | 141,999 | 167,407 | ||||||||||||||||||
Other current liabilities | 12,020 | 14,140 | 19,568 | 23,433 | 26,121 | 32,621 | ||||||||||||||||||
Total current liabilities | 252,405 | 282,764 | 316,576 | 317,538 | 299,043 | 407,575 | ||||||||||||||||||
Total Liabilities | 765,736 | 545,322 | 555,403 | 698,960 | 1,078,649 | 1,230,377 | ||||||||||||||||||
Total Equity and Liabilities | 821,683 | 913,674 | 939,569 | 1,180,239 | 1,657,177 | 1,921,177 | ||||||||||||||||||
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For the Six Month | ||||||||||||||||||||||||||||
For the Year Ended December 31, | Ended June 30, | |||||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||
(Thousands of euros) | (Unaudited) | |||||||||||||||||||||||||||
(Thousands of euros) | ||||||||||||||||||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS DATA: | ||||||||||||||||||||||||||||
Revenues | 523,727 | 648,417 | 703,291 | 814,311 | 913,186 | 470,531 | 487,809 | |||||||||||||||||||||
Changes in inventories of finished goods and work in progress | 4,191 | (21,631 | ) | 16,882 | 31,058 | 73,093 | 60,615 | 41,209 | ||||||||||||||||||||
Self-constructed non-current assets | 10,795 | 12,472 | 19,860 | 25,794 | 41,142 | 15,094 | 16,051 | |||||||||||||||||||||
Supplies | (158,088 | ) | (181,541 | ) | (196,308 | ) | (206,738 | ) | (286,274 | ) | (162,090 | ) | (157,107 | ) | ||||||||||||||
Other operating income | 550 | 380 | 2,322 | 1,289 | 1,443 | 861 | 631 | |||||||||||||||||||||
Personnel expenses | (154,887 | ) | (184,730 | ) | (209,049 | ) | (238,159 | ) | (273,168 | ) | (138,809 | ) | (141,972 | ) | ||||||||||||||
Other operating expenses | (124,910 | ) | (143,477 | ) | (158,273 | ) | (192,288 | ) | (203,381 | ) | (106,152 | ) | (100,298 | ) | ||||||||||||||
Amortisation and depreciation | (26,898 | ) | (29,357 | ) | (31,528 | ) | (33,256 | ) | (39,554 | ) | (19,124 | ) | (21,434 | ) | ||||||||||||||
Non-financial and other capital grants | 507 | 531 | 282 | 2,941 | 1,188 | 1,034 | 550 | |||||||||||||||||||||
Impairment and gains/(losses) on disposal of fixed assets | (1,401 | ) | (574 | ) | (1,125 | ) | (1,991 | ) | (1,147 | ) | (328 | ) | 681 | |||||||||||||||
Results from operating activities | 73,586 | 100,490 | 146,354 | 202,961 | 226,528 | 121,632 | 126,120 | |||||||||||||||||||||
Finance income | 3,549 | 4,667 | 4,526 | 2,682 | 7,067 | 4,799 | 2,179 | |||||||||||||||||||||
Finance expenses | (36,847 | ) | (42,140 | ) | (23,523 | ) | (29,305 | ) | (27,087 | ) | (10,447 | ) | (25,285 | ) | ||||||||||||||
Change in fair value of financial instruments | (1,008 | ) | 1,480 | 829 | (1,268 | ) | (587 | ) | (1,197 | ) | (15,404 | ) | ||||||||||||||||
Impairment of gains/(losses) on disposal of financial instruments | — | — | — | — | (245 | ) | — | — | ||||||||||||||||||||
Exchange losses | 1,550 | (1,064 | ) | (4,618 | ) | (2,825 | ) | (1,733 | ) | 211 | 1,970 | |||||||||||||||||
Finance income and expense | (32,756 | ) | (37,057 | ) | (22,786 | ) | (30,716 | ) | (22,585 | ) | (6,634 | ) | (36,540 | ) | ||||||||||||||
Share of profit of equity accounted investees | (10 | ) | 76 | 19 | 24 | 51 | 10 | (728 | ) | |||||||||||||||||||
Profit before income tax from continuing operations | 40,820 | 63,509 | 123,587 | 172,269 | 203,994 | 115,008 | 88,852 | |||||||||||||||||||||
Income tax expense | (15,315 | ) | (17,824 | ) | (35,239 | ) | (50,153 | ) | (56,424 | ) | (32,860 | ) | (23,022 | ) | ||||||||||||||
Profit after income tax from continuing operations | 25,505 | 45,685 | 88,348 | 122,116 | 147,570 | 82,148 | 65,830 | |||||||||||||||||||||
Profit attributable to equity holders of the Parent | 25,556 | 45,394 | 87,774 | 121,728 | 147,972 | 81,700 | 66,408 | |||||||||||||||||||||
Profit attributable to minority interest | (51 | ) | 291 | 574 | 388 | (402 | ) | 448 | (578 | ) | ||||||||||||||||||
Consolidated profit for the year | 25,505 | 45,685 | 88,348 | 122,116 | 147,570 | 82,148 | 65,830 | |||||||||||||||||||||
Basic earnings per ordinary share (Euros) | 0.14 | 0.24 | 0.41 | 0.58 | 0.71 | 0.39 | 0.31 | |||||||||||||||||||||
Diluted earnings per ordinary share (Euros) | 0.14 | 0.25 | 0.41 | 0.58 | 0.71 | 0.39 | 0.31 | |||||||||||||||||||||
Cash dividend per ordinary share (Euros) | 0.01 | 0.06 | 0.06 | 0.17 | 0.38 | 0.23 | — |
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• | the financial impact related to Talecris’ September 2009 initial public offering, which is referred to as the IPO, and refinancing transactions, including the repayment and termination of Talecris’ First and Second Lien Term Loans, the issuance of Talecris’ 7.75% Senior Notes due November 15, 2016, which is referred to as the 7.75% Notes, the write-off of previously deferred debt issuance costs, and charges related to the settlement and termination of Talecris’ interest rate swap contracts; |
• | the increase in the number of shares of Talecris common stock outstanding as a result of the issuance of new shares of Talecris common stock in Talecris’ IPO, to convert Talecris’ Series A and B preferred stock, and to settle accrued dividends upon the conversion of Talecris’ Series A and B preferred stock; | |
• | costs and non-operating income associated with Talecris’ terminated merger agreement with CSL Limited, which is referred to as CSL; | |
• | costs associated with Talecris’ internal investigation into potential violations of the Foreign Corrupt Practices Act, which is referred to as FCPA; |
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• | costs associated with Talecris’ definitive merger agreement with Grifols; | |
• | costs associated with the development and vertical integration of Talecris’ plasma collection center platform; | |
• | inventory impairment provisions, and subsequent recoveries, related to a plasma collection center current Good Manufacturing Practices, which is referred to as cGMP, issue; | |
• | inventory impairment provisions, and subsequent recoveries, related to a customer dispute settlement regarding intermediate material; | |
• | costs associated with share-based compensation awards and special recognition bonuses; | |
• | costs associated with transition-related activities to establish an independent company apart from Bayer; | |
• | non-operating income and costs related to a litigation settlement with Baxter; | |
• | tax benefit due to the release of Talecris’ deferred tax asset valuation allowance; and | |
• | the recognition of unallocated negative goodwill resulting from Talecris’ formation transaction. |
Predecessor | |||||||||||||||||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||||||||||
March 31, | December 31, | Six Months Ended | |||||||||||||||||||||||||||||||
2005 | 2005 | Years Ended December 31, | June 30, | ||||||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||
(In thousands, except share, per share, and ratio amounts) | |||||||||||||||||||||||||||||||||
Income Statement Data: | |||||||||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||||||
Product | $ | 245,500 | $ | 654,939 | $ | 1,114,489 | $ | 1,196,686 | $ | 1,334,550 | $ | 1,507,754 | $ | 734,979 | $ | 771,717 | |||||||||||||||||
Other | — | 13,039 | 14,230 | 21,823 | 39,742 | 25,455 | 12,386 | 12,070 | |||||||||||||||||||||||||
Total | 245,500 | 667,978 | 1,128,719 | 1,218,509 | 1,374,292 | 1,533,209 | 747,365 | 783,787 | |||||||||||||||||||||||||
Cost of goods sold | 209,700 | 561,111 | 684,750 | 788,152 | 882,157 | 901,077 | 433,209 | 440,568 | |||||||||||||||||||||||||
Gross profit | 35,800 | 106,867 | 443,969 | 430,357 | 492,135 | 632,132 | 314,156 | 343,219 | |||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||||||
SG&A | 27,500 | 89,205 | 241,448 | 189,387 | 227,524 | 289,929 | 134,425 | 143,624 | |||||||||||||||||||||||||
R&D | 14,800 | 37,149 | 66,801 | 61,336 | 66,006 | 71,223 | 35,561 | 32,159 | |||||||||||||||||||||||||
Total | 42,300 | 126,354 | 308,249 | 250,723 | 293,530 | 361,152 | 169,986 | 175,783 | |||||||||||||||||||||||||
(Loss) income from operations | (6,500 | ) | (19,487 | ) | 135,720 | 179,634 | 198,605 | 270,980 | 144,170 | 167,436 | |||||||||||||||||||||||
Other non-operating (expense) income: | |||||||||||||||||||||||||||||||||
Interest expense, net | — | (21,224 | ) | (40,867 | ) | (110,236 | ) | (96,640 | ) | (74,491 | ) | (41,858 | ) | (23,386 | ) | ||||||||||||||||||
CSL merger termination fee | — | — | — | — | — | 75,000 | 75,000 | — | |||||||||||||||||||||||||
Equity in earnings of affiliate | — | 197 | 684 | 436 | 426 | 441 | 184 | 326 | |||||||||||||||||||||||||
Loss on extinguishment of debt | — | — | (8,924 | ) | — | — | (43,033 | ) | — | — | |||||||||||||||||||||||
Litigation settlement | — | — | — | 12,937 | — | — | — | — | |||||||||||||||||||||||||
(Loss) income before income taxes and extraordinary items | (6,500 | ) | (40,514 | ) | 86,613 | 82,771 | 102,391 | 228,897 | 177,496 | 144,376 | |||||||||||||||||||||||
(Provision) benefit for income taxes | (5,100 | ) | (2,251 | ) | (2,222 | ) | 40,794 | (36,594 | ) | (75,008 | ) | (60,789 | ) | (51,414 | ) | ||||||||||||||||||
(Loss) income before extraordinary items | (11,600 | ) | (42,765 | ) | 84,391 | 123,565 | 65,797 | 153,889 | 116,707 | 92,962 | |||||||||||||||||||||||
Extraordinary items: | |||||||||||||||||||||||||||||||||
Gain (loss) from unallocated negative goodwill | — | 252,303 | (306 | ) | — | — | — | — | — | ||||||||||||||||||||||||
Gain from settlement of contingent consideration due Bayer | — | 13,200 | 3,300 | — | — | — | — | — | |||||||||||||||||||||||||
Net (loss) income | $ | (11,600 | ) | $ | 222,738 | $ | 87,385 | $ | 123,565 | $ | 65,797 | $ | 153,889 | $ | 116,707 | $ | 92,962 | ||||||||||||||||
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Predecessor | |||||||||||||||||||||||||||||||||
Three Months | Nine Months | ||||||||||||||||||||||||||||||||
Ended | Ended | ||||||||||||||||||||||||||||||||
March 31, | December 31, | Six Months Ended | |||||||||||||||||||||||||||||||
2005 | 2005 | Years Ended December 31, | June 30, | ||||||||||||||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||||||||||||||
(In thousands, except share, per share, and ratio amounts) | |||||||||||||||||||||||||||||||||
(Loss) income before extraordinary items per common share: | |||||||||||||||||||||||||||||||||
Basic | $ | (1.45 | ) | $ | (15.09 | ) | $ | (119.83 | ) | $ | 65.58 | $ | 39.01 | $ | 4.56 | $ | 76.29 | $ | 0.76 | ||||||||||||||
Diluted | $ | (1.45 | ) | $ | (15.09 | ) | $ | (119.83 | ) | $ | 1.36 | $ | 0.71 | $ | 1.50 | $ | 1.24 | $ | 0.73 | ||||||||||||||
Cash dividends declared per common share: | |||||||||||||||||||||||||||||||||
Basic | — | $ | 8.37 | $ | 132.82 | — | — | — | — | — | |||||||||||||||||||||||
Diluted | — | $ | 8.37 | $ | 8.61 | — | — | — | — | — | |||||||||||||||||||||||
Weighted average common shares outstanding: | |||||||||||||||||||||||||||||||||
Basic | 8,000,000 | 8,000,000 | 5,679,456 | 1,685,784 | 1,310,448 | 31,166,613 | 1,428,408 | 122,162,276 | |||||||||||||||||||||||||
Diluted | 8,000,000 | 8,000,000 | 5,679,456 | 91,065,600 | 92,761,800 | 102,514,363 | 93,862,960 | 127,829,089 | |||||||||||||||||||||||||
Balance Sheet Data (at period end): | |||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 10,887 | $ | 11,042 | $ | 73,467 | $ | 16,979 | $ | 65,239 | $ | 11,829 | $ | 89,502 | |||||||||||||||||
Total assets | $ | 1,040,800 | $ | 705,249 | $ | 903,474 | $ | 1,142,322 | $ | 1,307,399 | $ | 1,445,005 | $ | 1,336,742 | $ | 1,544,190 | |||||||||||||||||
Long-term debt, net of discount, and capital lease obligations | $ | — | $ | 250,366 | $ | 1,102,920 | $ | 1,129,692 | $ | 1,194,205 | $ | 605,267 | $ | 1,107,959 | $ | 605,149 | |||||||||||||||||
Redeemable preferred stock | $ | — | $ | 20,631 | $ | 110,535 | $ | 110,535 | $ | 110,535 | $ | — | $ | 110,535 | — | ||||||||||||||||||
Total parent’s net investment/stockholders’ equity (deficit) | $ | 943,600 | $ | 152,835 | $ | (528,980 | ) | $ | (390,757 | ) | $ | (316,725 | ) | $ | 582,154 | $ | (180,268 | ) | $ | 690,540 | |||||||||||||
Other Financial Data and Ratios (unaudited): | |||||||||||||||||||||||||||||||||
Liters of plasma fractionated | 905 | 2,493 | 2,983 | 2,650 | 3,240 | 3,569 | 1,740 | 1,821 | |||||||||||||||||||||||||
Gross margin | 14.6 | % | 16.0 | % | 39.3 | % | 35.3 | % | 35.8 | % | 41.2 | % | 42.0 | % | 43.8 | % | |||||||||||||||||
Operating margin | (2.6 | )% | (2.9 | )% | 12.0 | % | 14.7 | % | 14.5 | % | 17.7 | % | 19.3 | % | 21.4 | % |
Years Ended | Six Months Ended | |||||||||||||||||||
December 31, | June 30, | |||||||||||||||||||
2007 | 2008 | 2009 | 2009 | 2010 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
EBITDA(1) | $ | 203,756 | $ | 219,700 | $ | 332,324 | $ | 233,275 | $ | 184,613 | ||||||||||
Adjusted EBITDA(1) | $ | 256,771 | $ | 287,816 | $ | 447,283 | $ | 267,896 | $ | 205,333 | ||||||||||
Consolidated Cash Flow(2) | $ | — | $ | — | $ | 372,283 | $ | — | $ | 205,333 |
(1) | The definitions of EBITDA and adjusted EBITDA and a reconciliation of EBITDA and adjusted EBITDA to Net Income are provided under the heading“Non-U.S. GAAP Financial Measures” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris.” | |
(2) | The computation of Consolidated Cash Flow is not applicable prior to the issuance of Talecris’ 7.75% Notes on October 21, 2009. The definition of Consolidated Cash Flow and a reconciliation of Consolidated Cash Flow to Net Income are provided under the heading “Non-U.S. GAAP Financial Measures” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris.” |
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• | The audited consolidated financial statements of Grifols as of and for the year ended December 31, 2009, which have been prepared in accordance with IFRS as issued by the IASB and included elsewhere in this joint proxy statement/prospectus; | |
• | The unaudited condensed consolidated interim financial statements of Grifols as of and for the six month period ended June 30, 2010, which have been prepared in accordance with IAS 34,Interim Financial Reporting and included elsewhere in this joint proxy statement/prospectus; | |
• | The audited consolidated financial statements of Talecris as of and for the year ended December 31, 2009, which have been prepared in accordance with U.S. GAAP and are included elsewhere in this joint proxy statement/prospectus. These consolidated financial statements have been adjusted to IFRS and translated to euros for purposes of presentation in the unaudited pro forma condensed combined financial information; and | |
• | The unaudited consolidated interim financial statements of Talecris as of and for the six month period ended June 30, 2010, which have been prepared in accordance with U.S. GAAP and are included elsewhere in this joint proxy statement/prospectus. These consolidated financial statements have been adjusted to IFRS and translated to euros for purposes of presentation in the unaudited proforma condensed combined financial information. |
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25
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As of June 30, 2010
Historical | Historical | Pro Forma | ||||||||||||||||||
GRIFOLS IFRS | TALECRIS IFRS | Adjustments | Pro Forma | |||||||||||||||||
(Note 1) | (Note 2) | (Note 3) | GRIFOLS | |||||||||||||||||
(In thousands of €, except share amounts) | ||||||||||||||||||||
Non-current assets | ||||||||||||||||||||
Intangible assets and goodwill | 278,928 | 182,447 | 2,106,002 | (a) | 2,567,377 | |||||||||||||||
Property, plant and equipment | 423,096 | 247,431 | 670,527 | |||||||||||||||||
Investments in equity accounted investees | 1,196 | 1,846 | 3,042 | |||||||||||||||||
Non-current financial assets | 8,188 | 1,120 | 9,308 | |||||||||||||||||
Other | — | 1,203 | 1,203 | |||||||||||||||||
Deferred tax assets | 33,859 | 83,785 | 117,644 | |||||||||||||||||
Total non-current assets | 745,267 | 517,832 | 2,106,002 | 3,369,101 | ||||||||||||||||
Current assets | ||||||||||||||||||||
Inventories | 545,277 | 536,688 | 1,081,965 | |||||||||||||||||
Trade and other receivables | 260,170 | 150,819 | 410,989 | |||||||||||||||||
Other current financial assets | 8,547 | — | 8,547 | |||||||||||||||||
Other current assets | 11,776 | 17,099 | 28,875 | |||||||||||||||||
Cash and cash equivalents | 350,140 | 73,069 | (219,812 | )(a) | 203,397 | |||||||||||||||
Total current assets | 1,175,910 | 777,675 | (219,812 | ) | 1,733,773 | |||||||||||||||
TOTAL ASSETS | 1,921,177 | 1,295,507 | 1,886,190 | 5,102,874 | ||||||||||||||||
Equity | ||||||||||||||||||||
Share capital | 106,532 | 1,002 | 8,511 | (c) | 116,045 | |||||||||||||||
Share premium | 121,802 | 676,311 | 192,503 | (c) | 990,616 | |||||||||||||||
Reserves | 403,687 | (132,943 | ) | 79,867 | (b)(c) | 350,611 | ||||||||||||||
Own shares | (1,927 | ) | — | — | (1,927 | ) | ||||||||||||||
Profit for the six months attributable to the Parent | 66,408 | 66,630 | (117,127 | )(c)(d) | 15,911 | |||||||||||||||
Total equity | 696,502 | 611,000 | 163,754 | 1,471,256 | ||||||||||||||||
Cash flow hedges | (1,849 | ) | — | — | (1,849 | ) | ||||||||||||||
Translation differences | (16,825 | ) | (966 | ) | 966 | (16,825 | ) | |||||||||||||
Other comprehensive income | (18,674 | ) | (966 | ) | 966 | (c) | (18,674 | ) | ||||||||||||
Equity attributable to the Parent | 677,828 | 610,034 | 164,720 | 1,452,582 | ||||||||||||||||
Minority interest | 12,972 | — | — | 12,972 | ||||||||||||||||
TOTAL EQUITY | 690,800 | 610,034 | 164,720 | 1,465,554 | ||||||||||||||||
Non-current liabilities | ||||||||||||||||||||
Grants | 2,309 | — | 2,309 | |||||||||||||||||
Provisions | 1,283 | 9,055 | 10,338 | |||||||||||||||||
Non-current financial liabilities | 754,181 | 482,598 | 1,721,470 | (a)(b)(d) | 2,958,249 | |||||||||||||||
Other non-current liabilities | — | 3,133 | 3,133 | |||||||||||||||||
Deferred tax liabilities | 65,029 | 4,648 | 69,677 | |||||||||||||||||
Total non-current liabilities | 822,802 | 499,434 | 1,721,470 | 3,043,706 | ||||||||||||||||
Current liabilities | ||||||||||||||||||||
Provisions | 4,460 | — | 4,460 | |||||||||||||||||
Current financial liabilities | 203,087 | 133,572 | 336,659 | |||||||||||||||||
Trade and other payables | 167,407 | 128,307 | 295,714 | |||||||||||||||||
Other current liabilities | 32,621 | (75,840 | ) | (43,219 | ) | |||||||||||||||
Total current liabilities | 407,575 | 186,039 | — | 593,614 | ||||||||||||||||
TOTAL LIABILITIES | 1,230,377 | 685,473 | 1,721,470 | 3,637,320 | ||||||||||||||||
TOTAL EQUITY AND LIABILITIES | 1,921,177 | 1,295,507 | 1,886,190 | 5,102,874 | ||||||||||||||||
Number of shares in issue at balance sheet date(A) | 212,906,573 | 85,109,152 | 298,015,725 |
(A) | The historical Grifols shares represents 213,064,899 issued shares, net of 158,326 own shares. The number of shares in issue at the balance sheet date has been adjusted by 85,109,152 Grifols non-voting shares representing the estimated number of Grifols non-voting shares to be issued as consideration, based upon 132,005,590 fully diluted shares of Talecris common stock outstanding as of September 30, 2010. The number of shares exchanged will be 0.6485 (or 0.641 for Talecris specified affiliated stockholders) Grifols non-voting shares for each outstanding share of Talecris common stock. |
26
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Six Month Period Ended June 30, 2010
Historical | Historical | Pro Forma | ||||||||||||||||||
GRIFOLS IFRS | TALECRIS IFRS | Adjustments | Pro Forma | |||||||||||||||||
(Note 1) | (Note 2) | (Note 3) | GRIFOLS | |||||||||||||||||
(In thousands of €, except share and per share amounts ) | ||||||||||||||||||||
Revenues | 487,809 | 590,735 | — | 1,078,544 | ||||||||||||||||
Changes in inventories of finished goods and work in progress | 41,209 | 5,405 | — | 46,614 | ||||||||||||||||
Self-constructed non-current assets | 16,051 | 5,653 | — | 21,704 | ||||||||||||||||
Supplies | (157,107 | ) | (149,328 | ) | — | (306,435 | ) | |||||||||||||
Other operating income | 631 | — | — | 631 | ||||||||||||||||
Personnel expenses | (141,972 | ) | (168,851 | ) | 5,440 | (f) | (305,383 | ) | ||||||||||||
Other operating expenses | (100,298 | ) | (145,662 | ) | — | (245,960 | ) | |||||||||||||
Amortisation and depreciation | (21,434 | ) | (23,233 | ) | — | (44,667 | ) | |||||||||||||
Non-financial and other capital grants | 550 | — | — | 550 | ||||||||||||||||
Impairment and gains/(losses) on disposal of fixed assets | 681 | (243 | ) | — | 438 | |||||||||||||||
Results from operating activities | 126,120 | 114,476 | 5,440 | 246,036 | ||||||||||||||||
Finance income | 2,179 | 58 | — | 2,237 | ||||||||||||||||
Finance expenses | (25,285 | ) | (17,425 | ) | (50,497 | )(d) | (93,207 | ) | ||||||||||||
Change in fair value of financial instruments | (15,404 | ) | — | — | (15,404 | ) | ||||||||||||||
Exchange gains | 1,970 | 7,762 | — | 9,732 | ||||||||||||||||
Financial income and expense | (36,540 | ) | (9,605 | ) | (50,497 | ) | (96,642 | ) | ||||||||||||
Share of (loss) profit of equity accounted investees | (728 | ) | 246 | — | (482 | ) | ||||||||||||||
Profit before income tax from continuing operations | 88,852 | 105,117 | (45,057 | ) | 148,912 | |||||||||||||||
Income tax (expense) benefit | (23,022 | ) | (38,487 | ) | 16,916 | (h) | (44,593 | ) | ||||||||||||
Profit after income tax from continuing operations | 65,830 | 66,630 | (28,141 | ) | 104,319 | |||||||||||||||
Profit attributable to equity holders of the Parent | 66,408 | 66,630 | (28,141 | ) | 104,897 | |||||||||||||||
Profit attributable to minority interest | (578 | ) | — | (578 | ) | |||||||||||||||
Consolidated profit for the six month period | 65,830 | 66,630 | (28,141 | ) | 104,319 | |||||||||||||||
Basic earnings per share | 0.31697 | — | 0.35605 | |||||||||||||||||
Weighted average number of shares in issue(B) | 209,506,126 | 85,109,152 | 294,615,278 | |||||||||||||||||
Diluted earnings per share | 0.31697 | — | 0.35605 | |||||||||||||||||
Weighted average number of shares on fully diluted basis(B) | 209,506,126 | 85,109,152 | 294,615,278 |
(B) | The weighted average number of shares outstanding during the period has been adjusted to give effect to shares to be issued as consideration for the transaction as if the acquisition had taken place as of January 1, 2009. |
27
Table of Contents
Year Ended December 31, 2009
Pro Forma | |||||||||||||||||||||
Adjustments | |||||||||||||||||||||
to TALECRIS | |||||||||||||||||||||
Historical | |||||||||||||||||||||
Historical | Historical | Financial | Pro Forma | ||||||||||||||||||
GRIFOLS IFRS | TALECRIS IFRS | Statements | Adjustments | Pro Forma | |||||||||||||||||
(Note 1) | (Note 2) | (Note 3) | (Note 4) | GRIFOLS | |||||||||||||||||
(In thousands of €, except share and per share amounts) | |||||||||||||||||||||
Revenues | 913,186 | 1,099,626 | — | — | 2,012,812 | ||||||||||||||||
Changes in inventories of finished goods and work in progress | 73,093 | 29,373 | — | — | 102,466 | ||||||||||||||||
Self-constructed non-current assets | 41,142 | 9,322 | — | — | 50,464 | ||||||||||||||||
Supplies | (286,274 | ) | (292,337 | ) | — | — | (578,611 | ) | |||||||||||||
Other operating income | 1,443 | 53,790 | — | (53,790 | )(e) | 1,443 | |||||||||||||||
Personnel expenses | (273,168 | ) | (333,476 | ) | — | 32,051 | (f) | (574,593 | ) | ||||||||||||
Other operating expenses | (203,381 | ) | (276,762 | ) | — | — | (480,143 | ) | |||||||||||||
Amortization and depreciation | (39,554 | ) | (25,571 | ) | — | — | (65,125 | ) | |||||||||||||
Non-financial and other capital grants | 1,188 | — | — | — | 1,188 | ||||||||||||||||
Impairment and gains/(losses) on disposal of fixed assets | (1,147 | ) | (3,053 | ) | — | — | (4,200 | ) | |||||||||||||
Results from operating activities | 226,528 | 260,912 | — | (21,739 | ) | 465,701 | |||||||||||||||
Finance income | 7,067 | 341 | — | — | 7,408 | ||||||||||||||||
Finance expenses | (27,087 | ) | (94,038 | ) | 39,286 | (a) | (95,289 | )(d) | (177,128 | ) | |||||||||||
Change in fair value of financial instruments | (587 | ) | — | — | — | (587 | ) | ||||||||||||||
Impairment of gains/(losses) on disposal of financial instruments | (245 | ) | — | — | — | (245 | ) | ||||||||||||||
Exchange losses | (1,733 | ) | (1,333 | ) | — | — | (3,066 | ) | |||||||||||||
Financial income and expense | (22,585 | ) | (95,030 | ) | 39,286 | (95,289 | ) | (173,618 | ) | ||||||||||||
Share of profit of equity accounted investees | 51 | 316 | — | — | 367 | ||||||||||||||||
Profit before income tax from continuing operations | 203,994 | 166,198 | 39,286 | (117,028 | ) | 292,450 | |||||||||||||||
Income tax (expense) benefit | (56,424 | ) | (50,908 | ) | (10,793 | ) | 37,292 | (g) | (80,833 | ) | |||||||||||
Profit after income tax from continuing operations | 147,570 | 115,290 | 28,493 | (79,736 | ) | 211,617 | |||||||||||||||
Profit attributable to equity holders of the Parent | 147,972 | 115,290 | 28,493 | (79,736 | ) | 212,019 | |||||||||||||||
Profit attributable to minority interest | (402 | ) | — | — | — | (402 | ) | ||||||||||||||
Consolidated profit for the year | 147,570 | 115,290 | 28,493 | (79,736 | ) | 211,617 | |||||||||||||||
Basic earnings per share | 0.70629 | — | 0.72241 | ||||||||||||||||||
Weighted average number of shares in issue(B) | 209,506,126 | 83,983,582 | 293,489,708 | ||||||||||||||||||
Diluted earnings per share | 0.70629 | — | 0.72241 | ||||||||||||||||||
Weighted average number of shares on fully diluted basis(B) | 209,506,126 | 83,983,582 | 293,489,708 |
(B) | The weighted average number of shares outstanding during the period has been adjusted to give effect to shares to be issued as consideration for the transaction as if the acquisition had taken place as of January 1, 2009. |
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FINANCIAL INFORMATION
1. | Historical Grifols Information |
• | unaudited condensed consolidated interim financial statements as of and for the six month period ended June 30, 2010; and | |
• | audited consolidated financial statements as of and for the year ended December 31, 2009. |
2. | Talecris Reconciliation to IFRS in Euros |
Balance Sheet as of June 30, 2010 | ||||||||||||||||||||||||||||||||||||||||
Historical | Adjustments to IFRS | Historical | ||||||||||||||||||||||||||||||||||||||
TALECRIS as | Debt | Inventory | Capitalize | Shared Based | Income | Ex. | TALECRIS | |||||||||||||||||||||||||||||||||
reported under | Issuance | Recovery | R&D Cost | Payments | Taxes | Reclassifications | TALECRIS | Rate (h) | IFRS as shown | |||||||||||||||||||||||||||||||
US GAAP | Costs(a) | (b) | (c) | (d) | (e) | (g) | IFRS | 1.2249 | in the Pro Forma | |||||||||||||||||||||||||||||||
(In thousands of $) | (In thousands of €) | |||||||||||||||||||||||||||||||||||||||
Non-current assets | ||||||||||||||||||||||||||||||||||||||||
Intangible assets and goodwill | 183,740 | 39,739 | 223,479 | 182,447 | ||||||||||||||||||||||||||||||||||||
Property, plant and equipment | 303,078 | 303,078 | 247,431 | |||||||||||||||||||||||||||||||||||||
Investments in equity accounted investees | 2,261 | 2,261 | 1,846 | |||||||||||||||||||||||||||||||||||||
Non-current financial assets | — | 1,372 | (i) | 1,372 | 1,120 | |||||||||||||||||||||||||||||||||||
Other | 17,891 | (15,045 | ) | (1,372 | )(i) | 1,474 | 1,203 | |||||||||||||||||||||||||||||||||
Deferred tax assets | — | 13,976 | 88,652 | (vii) | 102,628 | 83,785 | ||||||||||||||||||||||||||||||||||
Total non-current assets | 506,970 | (15,045 | ) | — | 39,739 | — | 13,976 | 88,652 | 634,292 | 517,832 | ||||||||||||||||||||||||||||||
Current assets | ||||||||||||||||||||||||||||||||||||||||
Inventories | 653,384 | 4,005 | 657,389 | 536,688 | ||||||||||||||||||||||||||||||||||||
Trade and other receivables | 169,030 | 15,708 | (ii) | 184,738 | 150,819 | |||||||||||||||||||||||||||||||||||
Prepaid expenses and other | 36,652 | (36,652 | )(ii) (iii) | — | — | |||||||||||||||||||||||||||||||||||
Deferred tax assets | 88,652 | (88,652 | )(vii) | — | — | |||||||||||||||||||||||||||||||||||
Other current assets | — | 20,944 | (iii) | 20,944 | 17,099 | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents | 89,502 | 89,502 | 73,069 | |||||||||||||||||||||||||||||||||||||
Total current assets | 1,037,220 | — | 4,005 | — | — | — | (88,652 | ) | 952,573 | 777,675 | ||||||||||||||||||||||||||||||
Total Assets | 1,544,190 | (15,045 | ) | 4,005 | 39,739 | — | 13,976 | — | 1,586,865 | 1,295,507 | ||||||||||||||||||||||||||||||
29
Table of Contents
INFORMATION — (Continued)
Balance Sheet as of June 30, 2010 | ||||||||||||||||||||||||||||||||||||||||
Historical | ADJUSTMENTS TO IFRS | Historical | ||||||||||||||||||||||||||||||||||||||
TALECRIS as | Debt | Inventory | Capitalize | Shared based | Income | Ex. | TALECRIS | |||||||||||||||||||||||||||||||||
reported under | issuance | recovery | R&D cost | payments | taxes | Reclassifications | TALECRIS | rate (h) | IFRS as shown | |||||||||||||||||||||||||||||||
US GAAP | costs(a) | (b) | ( c) | (d) | ( e) | (g) | IFRS | 1.2249 | in the Proforma | |||||||||||||||||||||||||||||||
(in thousands of $) | (in thousands of €) | |||||||||||||||||||||||||||||||||||||||
Equity | ||||||||||||||||||||||||||||||||||||||||
Share capital | 1,227 | 1,227 | 1,002 | |||||||||||||||||||||||||||||||||||||
Share premium | 783,980 | 4,712 | 39,721 | 828,413 | 676,311 | |||||||||||||||||||||||||||||||||||
Reserves | (93,484 | ) | (1,030 | ) | 4,005 | 39,739 | (4,712 | ) | (25,745 | ) | (81,227 | ) | (66,313 | ) | ||||||||||||||||||||||||||
Total equity | 691,723 | (1,030 | ) | 4,005 | 39,739 | — | 13,976 | — | 748,413 | 611,000 | ||||||||||||||||||||||||||||||
Translation differences | (1,183 | ) | (1,183 | ) | (966 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | (1,183 | ) | — | — | — | — | — | — | (1,183 | ) | (966 | ) | ||||||||||||||||||||||||||||
Equity attributable to the Parent | 690,540 | (1,030 | ) | 4,005 | 39,739 | — | 13,976 | 747,230 | 610,034 | |||||||||||||||||||||||||||||||
Total Equity | 690,540 | (1,030 | ) | 4,005 | 39,739 | — | 13,976 | — | 747,230 | 610,034 | ||||||||||||||||||||||||||||||
Non-current liabilities | ||||||||||||||||||||||||||||||||||||||||
Provisions | 11,092 | (iv) | 11,092 | 9,055 | ||||||||||||||||||||||||||||||||||||
Non-current financial liabilities | 605,149 | (14,015 | ) | 591,134 | 482,598 | |||||||||||||||||||||||||||||||||||
Other non-current liabilities | 14,929 | (11,092 | )(iv) | 3,837 | 3,133 | |||||||||||||||||||||||||||||||||||
Deferred tax liabilities | 5,693 | 5,693 | 4,648 | |||||||||||||||||||||||||||||||||||||
Total non-current liabilities | 625,771 | (14,015 | ) | — | — | — | — | — | 611,756 | 499,434 | ||||||||||||||||||||||||||||||
Current liabilities | ||||||||||||||||||||||||||||||||||||||||
Current financial liabilities | 157,603 | 6,009 | (v) | 163,612 | 133,572 | |||||||||||||||||||||||||||||||||||
Trade and other payables | 70,276 | 86,887 | (vi) | 157,163 | 128,307 | |||||||||||||||||||||||||||||||||||
Other current liabilities | (92,896 | )(v)(vi) | (92,896 | ) | (75,840 | ) | ||||||||||||||||||||||||||||||||||
Total current liabilities | 227,879 | — | — | — | — | — | — | 227,879 | 186,039 | |||||||||||||||||||||||||||||||
Total Liabilities | 853,650 | (14,015 | ) | — | — | — | — | — | 839,635 | 685,473 | ||||||||||||||||||||||||||||||
Total Equity and Liabilities | 1,544,190 | (15,045 | ) | 4,005 | 39,739 | — | 13,976 | — | 1,586,865 | 1,295,507 | ||||||||||||||||||||||||||||||
30
Table of Contents
INFORMATION — (Continued)
Statement of Income Six Month Period Ended June 30, 2010 | |||||||||||||||||||||||||||||||||||||||||||||||
Historical 10 Q | Historical 10 Q | Adjustments to IFRS | Ex. | Historical | |||||||||||||||||||||||||||||||||||||||||||
TALECRIS | Reclassifications | TALECRIS | Debt | Inventory | Capitalize | Shared Based | Income | TALECRIS | Rate | TALECRIS | |||||||||||||||||||||||||||||||||||||
US GAAP Cost | to Cost | US GAAP | Issuance | Recovery | R&D Cost | Payments | Taxes | IFRS Cost | (h) | IFRS as Shown | |||||||||||||||||||||||||||||||||||||
by Function | by Nature | Cost by Nature | Costs(a) | (b) | ( c) | (d) | (e) | by Nature | 1.3268 | in the Pro Forma | |||||||||||||||||||||||||||||||||||||
A | B | A+B | |||||||||||||||||||||||||||||||||||||||||||||
(In thousands of $) | (In thousands of $) | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands of €) | |||||||||||||||||||||||||||||||||||||||||||||||
Net revenue | |||||||||||||||||||||||||||||||||||||||||||||||
Product | 783,787 | ||||||||||||||||||||||||||||||||||||||||||||||
Other | |||||||||||||||||||||||||||||||||||||||||||||||
Total | 783,787 | Revenues | 783,787 | 783,787 | 590,735 | ||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold | (440,568 | ) | 440,568 | ||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 343,219 | ||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | (143,624 | ) | 143,624 | ||||||||||||||||||||||||||||||||||||||||||||
Research and development | (32,159 | ) | 32,159 | ||||||||||||||||||||||||||||||||||||||||||||
Total | (175,783 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 167,436 | ||||||||||||||||||||||||||||||||||||||||||||||
7,248 | Changes in inventories of finished goods and work in progress | 7,248 | (77 | ) | 7,171 | 5,405 | |||||||||||||||||||||||||||||||||||||||||
2,182 | Self-constructed non-current assets | 2,182 | 5,318 | 7,500 | 5,653 | ||||||||||||||||||||||||||||||||||||||||||
(198,128 | ) | Supplies | (198,128 | ) | (198,128 | ) | (149,328 | ) | |||||||||||||||||||||||||||||||||||||||
(227,512 | ) | Personnel expenses | (227,512 | ) | 3,480 | (224,032 | ) | (168,851 | ) | ||||||||||||||||||||||||||||||||||||||
(193,265 | ) | Other operating expenses | (193,265 | ) | (193,265 | ) | (145,662 | ) | |||||||||||||||||||||||||||||||||||||||
(16,851 | ) | Amortization and depreciation | (16,851 | ) | (13,975 | ) | (30,826 | ) | (23,233 | ) | |||||||||||||||||||||||||||||||||||||
(323 | ) | Impairment and gains/(losses) on disposal of fixed assets | (323 | ) | (323 | ) | (243 | ) | |||||||||||||||||||||||||||||||||||||||
Results from operating activities | 157,138 | — | (77 | ) | (8,657 | ) | 3,480 | — | 151,884 | 114,476 | |||||||||||||||||||||||||||||||||||||
Other non-operating (expense) income | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (23,386 | ) | 23,386 | ||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings of affiliate | 326 | (326 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total | (23,060 | ) | |||||||||||||||||||||||||||||||||||||||||||||
77 | Finance income | 77 | 77 | 58 | |||||||||||||||||||||||||||||||||||||||||||
(23,463 | ) | Finance expenses | (23,463 | ) | 344 | (23,119 | ) | (17,425 | ) | ||||||||||||||||||||||||||||||||||||||
10,298 | Exchange gains | 10,298 | 10,298 | 7,762 | |||||||||||||||||||||||||||||||||||||||||||
Financial income and expense | (13,088 | ) | 344 | — | — | — | — | (12,744 | ) | (9,605 | ) | ||||||||||||||||||||||||||||||||||||
326 | Share of profit of equity accounted investees | 326 | 326 | 246 | |||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 144,376 | Profit before income tax from continuing operations | 144,376 | 344 | (77 | ) | (8,657 | ) | 3,480 | — | 139,466 | 105,117 | |||||||||||||||||||||||||||||||||||
(Provision) benefit for income taxes | (51,414 | ) | 0 | Income tax (expense) benefit | (51,414 | ) | 349 | (51,065 | ) | (38,487 | ) | ||||||||||||||||||||||||||||||||||||
Net income | 92,962 | Profit after income tax from continuing operations | 92,962 | 344 | (77 | ) | (8,657 | ) | 3,480 | 349 | 88,401 | 66,630 | |||||||||||||||||||||||||||||||||||
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Table of Contents
INFORMATION — (Continued)
Statement of Income for the Year Ended December 31, 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Historical 10 K | Historical 10 K | Adjustments to IFRS | Ex. | Historical | |||||||||||||||||||||||||||||||||||||||||||||||
TALECRIS | Reclassifications | TALECRIS | Debt | Inventory | Capitalize | Shared Based | Income | Preferred | TALECRIS | Rate | TALECRIS | ||||||||||||||||||||||||||||||||||||||||
US GAAP Cost | to Cost | US GAAP | Issuance | Recovery | R&D Cost | Payments | Taxes | Dividend | IFRS Cost | (h) | IFRS as Shown | ||||||||||||||||||||||||||||||||||||||||
by Function | by Nature | Cost by Nature | Costs(a) | (b) | ( c) | (d) | (e) | (f) | by Nature | 1.3943 | in the Pro Forma | ||||||||||||||||||||||||||||||||||||||||
A | B | A+B | |||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands of $) | (In thousands of $) | ||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands of €) | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||
Product | 1,507,754 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other | 25,455 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 1,533,209 | Revenues | 1,533,209 | 1,533,209 | 1,099,626 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of goods sold | 901,077 | (901,077 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Gross profit | 632,132 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | 289,929 | (289,929 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Research and development | 71,223 | (71,223 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | 361,152 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Income from operations | 270,980 | ||||||||||||||||||||||||||||||||||||||||||||||||||
45,523 | Changes in inventories of finished goods and work in progress | 45,523 | (4,568 | ) | 40,955 | 29,373 | |||||||||||||||||||||||||||||||||||||||||||||
4,563 | Self-constructed non-current assets | 4,563 | 8,435 | 12,998 | 9,322 | ||||||||||||||||||||||||||||||||||||||||||||||
(407,605 | ) | Supplies | (407,605 | ) | (407,605 | ) | (292,337 | ) | |||||||||||||||||||||||||||||||||||||||||||
75,000 | Other operating income | 75,000 | 75,000 | 53,790 | |||||||||||||||||||||||||||||||||||||||||||||||
(483,269 | ) | Personnel expenses | (483,269 | ) | 18,303 | (464,966 | ) | (333,476 | ) | ||||||||||||||||||||||||||||||||||||||||||
(386,389 | ) | Other operating expenses | (386,389 | ) | 500 | (385,889 | ) | (276,762 | ) | ||||||||||||||||||||||||||||||||||||||||||
(28,936 | ) | Amortization and depreciation | (28,936 | ) | (6,718 | ) | (35,654 | ) | (25,571 | ) | |||||||||||||||||||||||||||||||||||||||||
(4,257 | ) | Impairment and gains/(losses) on disposal of fixed assets | (4,257 | ) | (4,257 | ) | (3,053 | ) | |||||||||||||||||||||||||||||||||||||||||||
Results from operating activities | 347,839 | — | (4,568 | ) | 2,217 | 18,303 | — | — | 363,791 | 260,912 | |||||||||||||||||||||||||||||||||||||||||
Other non-operating (expense) income | |||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (74,491 | ) | 74,491 | ||||||||||||||||||||||||||||||||||||||||||||||||
CSL merger termination fee | 75,000 | (75,000 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | (43,033 | ) | 43,033 | ||||||||||||||||||||||||||||||||||||||||||||||||
Equity in earnings of affiliate | 441 | (441 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Total | (42,083 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
475 | Finance income | 475 | 475 | 341 | |||||||||||||||||||||||||||||||||||||||||||||||
(117,999 | ) | Finance expenses | (117,999 | ) | (1,374 | ) | (11,744 | ) | (131,117 | ) | (94,038 | ) | |||||||||||||||||||||||||||||||||||||||
(1,859 | ) | Exchange losses / (gains) | (1,859 | ) | (1,859 | ) | (1,333 | ) | |||||||||||||||||||||||||||||||||||||||||||
Financial income and expense | (119,383 | ) | (1,374 | ) | — | — | — | — | (11,744 | ) | (132,501 | ) | (95,030 | ) | |||||||||||||||||||||||||||||||||||||
441 | Share of profit of equity accounted investees | 441 | 441 | 316 | |||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 228,897 | Profit before income tax from continuing operations | 228,897 | (1,374 | ) | (4,568 | ) | 2,217 | 18,303 | — | (11,744 | ) | 231,731 | 166,198 | |||||||||||||||||||||||||||||||||||||
(Provision) benefit for income taxes | (75,008 | ) | 0 | Income tax expense | (75,008 | ) | 4,027 | (70,981 | ) | (50,908 | ) | ||||||||||||||||||||||||||||||||||||||||
Net income | 153,889 | Profit after income tax from continuing operations | 153,889 | (1,374 | ) | (4,568 | ) | 2,217 | 18,303 | 4,027 | (11,744 | ) | 160,750 | 115,290 | |||||||||||||||||||||||||||||||||||||
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3. | Pro Forma Adjustments to Talecris’ Historical Financial Statements |
• | Reversal of finance charges associated with Talecris’ First and Second Lien Term Loans as a result of their repayment and termination as well as costs associated with the settlement and termination of Talecris’ interest rate swap contracts, €30.863 million. As the pro forma financial statements are prepared assuming |
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that the transaction occurred at the beginning of the fiscal year presented (January 1, 2009), this expense has not been included in the pro forma statement of income for the year ended December 31, 2009. |
• | Represents the cumulative preferred dividends on Talecris’ Series A and B preferred stock accrued and settled upon the IPO at September 30, 2009, €8.423 million. As the pro forma financial statements are prepared assuming that the transaction occurred at the beginning of the fiscal year presented (January 1, 2009), this expense has not been included in the pro forma statement of income for the year ended December 31, 2009. |
4. | Pro forma Adjustments |
(In thousands of €) | ||||
Purchase price: | ||||
Cash(i) | 1,837,710 | |||
Fair value of shares issued(ii) | 878,326 | |||
2,716,036 | ||||
Talecris shares(1) | 132,005,590 | |||||||||||
Cash $ per share(2) | 19 | |||||||||||
Cash in thousands $ | 2,508,106 | |||||||||||
Exchange rate $/Euros(3) | 1.3648 | |||||||||||
Cash in thousands of euros | 1,837,710 |
(1) | Talecris shares (as of September 30, 2010) |
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Shares outstanding based on 10Q September 30, 2010 | 124,915,474 | |||
Plus: Options outstanding | 9,195,203 | |||
Plus: Restricted Stock Units and performance share units | 752,036 | |||
Fully Converted Shares Outstanding | 134,862,713 | |||
Options and Restricted Stock Converted(4) | 6,338,080 | |||
Restricted Stock Units and performance share units | 752,036 | |||
Shares Outstanding | 124,915,474 | |||
Fully Diluted Shares Outstanding | 132,005,590 | |||
(2) | Based on the merger agreement. |
(3) | Exchange rate $/Euro at September 30, 2010 based on “noon buying rate” in the City of New York for cable transfers payable in foreign currencies as certified by the Federal Reserve Bank of New York. |
(4) | Calculated based on Treasury Method. |
Talecris fully diluted shares outstanding | 132,005,590 | |||||||
Talecris specified affiliated shares | 66,196,403 | |||||||
Exchange ratio(1) | 0.641 | 42,431,894 | ||||||
Float shares | 65,809,187 | |||||||
Additional exchange ratio(2) | 0.6485 | 42,677,258 | ||||||
Grifols shares issued on the transaction | 85,109,152 | |||||||
Price of Grifols ordinary shares (in euros)(3) | 10.32 | |||||||
Estimated fair value of share issued in thousands of euros | 878,326 |
(1) | Based on the merger agreement |
(2) | Based on the amendment No1 to the agreement and plan of merger |
(3) | Based on the average price on the Spanish Stock Exchanges of Grifols ordinary shares during the 20 trading days preceding September 30, 2010 |
(In thousands of €) | ||||
Net assets acquired (book value) as at June 30, 2010 | 610,034 | |||
Purchase price | 2,716,036 | |||
Preliminary goodwill(1)(2) | 2,106,002 | |||
(1) | As of the date of the preparation of these unaudited pro forma condensed combined interim financial statements, a purchase price allocation, in accordance with IFRS 3 (revised), could not be completed as there was not sufficient publicly available information. When the purchase price allocation is completed, other intangible assets may be identified (i.e. licenses, in process research and development, customer relationships, etc.), which could result in a reduction of goodwill. The identification of such intangible assets could generate an amortization charge which could have an impact on the unaudited pro forma condensed combined interim statement of income. | |
Based on preliminary assumptions for the fair value adjustments of tangible and intangible assets arising on the purchase price allocation, such allocation represents between 20% and 25% of the estimated goodwill of €2,106 million as of June 30, 2010. On this basis the amount of the annual depreciation and amortization expense net of the tax effect (calculated based on statutory rates of 35%) would be approximately between €18 million and €23 million. | ||
For purposes of a potential income statement adjustment, the depreciation expense of tangible assets was estimated based on similar useful lives as those applied in the historical financial statements, being on average approximately 30 years for buildings and 10 years for |
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(2) | Goodwill will be denominated in U.S. dollars and will be approximately $2.874 billion. The effect of future currency fluctuations between the euro, which is the functional currency of Grifols, and the U.S. dollar will be accounted for as a currency translation adjustment. |
(In thousands of €) | ||||
Cash and cash equivalents at Grifols | 219,812 | |||
Incremental debts | 1,617,898 | |||
Purchase price in cash in connection with the transaction | 1,837,710 | |||
(In thousands of €) | ||||
Acquisition related costs in U.S. dollars(2) | 224,000 | |||
Exchange rate $/Euros | 1.3648 | |||
Acquisition related costs in Euros | 164,127 | |||
Related with debt issuance(1) | 61,895 | |||
Related with capital increase and transaction related expenses | 53,076 | |||
Total acquisition related costs considered in the pro formas | 114,971 | |||
(1) | The acquisition costs related with debt issuance are estimated based on the incremental debt | |
(2) | Certain of these acquisition costs may relate to the income statement, however, as this could represent a material non-recurring charge which results directly from the transaction, this expense has not been included in the unaudited condensed combined pro forma statement of income. |
Other | ||||||||||||||||||||
Comprehensive | ||||||||||||||||||||
Share Capital | Share Premium | Reserves | Income | Total | ||||||||||||||||
(In thousands of €) | ||||||||||||||||||||
Elimination of the historical equity of Talecris | (1,002 | ) | (676,311 | ) | 66,313 | 966 | (610,034 | ) | ||||||||||||
Newly issued equity(1) | 9,513 | 868,814 | — | — | 878,326 | |||||||||||||||
8,511 | 192,503 | 66,313 | 966 | 268,292 | ||||||||||||||||
(1) | The consideration to purchase Talecris will be funded in part through the issuance of shares based on the exchange ratio of 0.6485 (or 0.641 for Talecris specified affiliated stockholders) Grifols non-voting shares for each issued and outstanding share of common stock of Talecris. The number of Grifols non-voting shares expected to be exchanged is 85,109,152, which is based upon the number of issued and outstanding shares of common stock of Talecris as of September 30, 2010, multiplied by the exchange ratio of 0.6485 (or 0.641 for Talecris specified affiliated stockholders). Based on a nominal value of Grifols shares of €0.10, €8,511 million representing the nominal value of the shares and the remainder share premium. Grifols and Talecris are still discussing the par value of the shares to be issued. |
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Exchange | Euros | |||||||||||
$ Thousands | Rate $/Euros | Thousands | ||||||||||
Purchase price in cash in connection with the transaction | 2,508,106 | 1.3648 | 1,837,710 | |||||||||
Cash and cash equivalents at Grifols | (300,000 | ) | 1.3648 | (219,812 | ) | |||||||
Incremental debt to be issued | 2,208,106 | 1,617,898 | ||||||||||
Average interest rate(1) | 6.07 | % | ||||||||||
Six month period until June 30, 2010 finance expenses | 66,999 | 1.3268 | 50,497 | |||||||||
2009 Annual estimated finance expenses | 133,998 | 1.3943 | 96,104 |
(1) | Average interest rate is calculated based on the committed interest rate for financing in U.S. dollars. |
• | Non-cash equity compensation expense of €20.973 million in 2009 and €5.440 million for the six month period ended June 30, 2010. The merger agreement contemplates that, upon completion of the merger, all the Talecris stock based awards will become fully vested and be cancelled. As this is a material nonrecurring charge which results directly from the transaction, these expenses have not been included in the corresponding unaudited condensed combined pro forma statements of income. | |
• | Compensation expense associated with special recognition bonus awards granted to certain Talecris employees and senior executives, €4.525 million (which will be paid if the transaction closes). As this is a material nonrecurring charge which results directly from the transaction, this expense has not been included in the unaudited pro forma condensed combined statement of income for the year ended December 31, 2009. | |
• | Merger related retention expenses, including fringe benefits, related to Talecris/CSL Limited terminated merger agreement, €6.553 million. As this is a material nonrecurring charge which resulted directly from the prior failed Talecris/CSL Limited merger, this expense has not been included in the unaudited condensed combined pro forma statement of income for the year ended December 31, 2009. |
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• | Pro forma basic and diluted earnings per share are based on the combined results of Grifols and Talecris prepared in accordance with IFRS and U.S. GAAP, respectively. Talecris’ U.S. GAAP results have been adjusted to IFRS and translated to euros for purposes of presentation in the unaudited pro forma condensed combined financial information. Earnings per share, basic and diluted, are stated in euros. | |
• | Pro forma combined amounts are presented as if the transaction had been effective for the year 2009 presented based on the “acquisition method” as defined by International Financial Reporting Standard No. 3 (revised) Business Combinations. |
Year Ended | Six-Months Ended | |||||||
December 31, 2009 | June 30, 2010 | |||||||
Grifols — Historical (in euros) | ||||||||
Historical per Grifols ordinary share: | ||||||||
Basic earnings | 0.71 | 0.31 | ||||||
Diluted earnings | 0.71 | 0.31 | ||||||
Dividends(1) | 0.38 | 0.00 | ||||||
Book value(2) | 2.72 | 3.24 | ||||||
Pro Forma Combined (in euros) | ||||||||
Pro forma per combined company share: | ||||||||
Basic earnings | 0.73 | 0.36 | ||||||
Diluted earnings | 0.73 | 0.36 | ||||||
Dividends | N/A | N/A | ||||||
Book value(2) | 3.99 | 4.52 | ||||||
Talecris — Historical (in dollars) | ||||||||
Historical per Talecris share: | ||||||||
Basic earnings | 4.56 | 0.76 | ||||||
Diluted earnings | 1.50 | 0.73 | ||||||
Dividends(1) | 0.00 | 0.00 | ||||||
Book value(2) | 4.76 | 5.61 |
(1) | Dividends paid during the year | |
(2) | At the end of the reported period on shares outstanding |
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Grifols Ordinary Shares | ||||||||
High | Low | |||||||
(Euros) | ||||||||
Fiscal Year 2006 | ||||||||
Annual (from May 17, 2006) | 10.08 | 4.99 | ||||||
Fiscal Year 2007 | ||||||||
Annual | 18.25 | 10.11 | ||||||
Fiscal Year 2008 | ||||||||
First Quarter | 16.63 | 13.28 | ||||||
Second Quarter | 20.53 | 15.77 | ||||||
Third Quarter | 20.53 | 17.67 | ||||||
Fourth Quarter | 17.69 | 11.76 | ||||||
Fiscal Year 2009 | ||||||||
First Quarter | 14.29 | 10.30 | ||||||
Second Quarter | 13.45 | 11.07 | ||||||
Third Quarter | 13.19 | 11.92 | ||||||
Fourth Quarter | 12.88 | 11.01 | ||||||
Fiscal Year 2010 | ||||||||
First Quarter | 12.44 | 10.12 | ||||||
April | 11.60 | 9.55 | ||||||
May | 9.98 | 8.76 | ||||||
June | 9.33 | 8.44 | ||||||
July | 8.76 | 8.32 | ||||||
August | 9.65 | 8.85 | ||||||
September | 10.93 | 9.55 | ||||||
October | 11.64 | 10.45 |
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Gross per Share | Net per Share | |||||||||||
Year | Type | Payment Date | Amount | Amount(2) | ||||||||
(Euros) | (Euros) | |||||||||||
2009 | Ordinary | July 1, 2010 | 0.12789208 | 0.10359258 | ||||||||
Interim | December 18, 2009 | 0.15305538 | 0.12550541 | |||||||||
2008 | Ordinary | July 2, 2009 | 0.23209553 | 0.19031833 | ||||||||
2007 | Ordinary | July 23, 2008 | 0.11740120 | 0.09626899 | ||||||||
Extraordinary(1) | June 23, 2008 | 0.04760150 | 0.04760150 |
(1) | Dividends paid out of distributable reserves (shares premiums reserves). | |
(2) | Net of Spanish withholding tax. The Spanish withholding tax rate was 18% in 2007, 2008 and 2009 and 19% in 2010. |
Talecris Common Stock | ||||||||
High | Low | |||||||
(U.S. dollars) | ||||||||
Fiscal Year 2009 | ||||||||
Fourth Quarter (from October 1, 2009) | 23.44 | 18.01 | ||||||
Fiscal Year 2010 | ||||||||
First Quarter | 24.41 | 19.77 | ||||||
Second Quarter | 23.09 | 15.70 | ||||||
Third Quarter | 23.30 | 20.95 | ||||||
Fourth Quarter (through November 2, 2010) | 24.52 | 23.05 |
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Closing Price | ||||||||||||||||
Closing Price of Grifols Ordinary Shares | of Talecris | |||||||||||||||
Exchange | Common Stock | |||||||||||||||
Date | (Euros) | Rate ($/ €) | (U.S. Dollars) | (U.S. Dollars) | ||||||||||||
June 4, 2010 | 9.267 | 1.1998 | 11.119 | 15.92 | ||||||||||||
June 7, 2010 | 8.479 | 1.1959 | 10.140 | 20.01 | ||||||||||||
November 2, 2010 | 11.040 | 1.4034 | 15.494 | 23.61 |
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Period End | Average Rate | |||||||
Annual Data (Year Ended December 31,) | ($) | ($)(1) | ||||||
2005 | 1.1795 | 1.2442 | ||||||
2006 | 1.3187 | 1.2563 | ||||||
2007 | 1.4621 | 1.3708 | ||||||
2008 | 1.3901 | 1.4709 | ||||||
2009 | 1.4348 | 1.3943 |
Period End | Average Rate | |||||||
Interim Data (Six Months Ended June 30,) | ($) | ($)(1) | ||||||
2010 | 1.2249 | 1.3268 |
(1) | The average rates for the interim and annual periods were calculated by taking the simple average of the noon buying rates for the euro on the last day of each month during the relevant period. |
High | Low | |||||||
Recent Monthly Data | ($) | ($) | ||||||
January 2010 | 1.4547 | 1.3900 | ||||||
February 2010 | 1.3932 | 1.3513 | ||||||
March 2010 | 1.3758 | 1.3343 | ||||||
April 2010 | 1.3627 | 1.3204 | ||||||
May 2010 | 1.3175 | 1.2221 | ||||||
June 2010 | 1.2383 | 1.1930 | ||||||
July 2010 | 1.3085 | 1.2455 | ||||||
August 2010 | 1.3292 | 1.2726 | ||||||
September 2010 | 1.3652 | 1.2726 | ||||||
October 2010 | 1.4085 | 1.3682 |
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• | Risks Relating to the Transaction |
• | the Grifols non-voting shares may trade at a significant discount relative to the Grifols ordinary shares due to the possibility of less liquidity, their lack of voting rights or other factors; | |
• | no current public market for the Grifols non-voting shares or Grifols new ADSs so value of a portion of merger consideration is uncertain; | |
• | material differences between the current rights of Talecris stockholders and holders of Grifols non-voting shares or Grifols new ADSs; | |
• | difficulties in developing a liquid trading market for the new ADSs; | |
• | difficulties and delays in obtaining regulatory approvals for the transaction; | |
• | the ability to consummate the transaction; | |
• | difficulties and delays in achieving synergies and cost savings and/or meeting restrictive covenants in lending agreements; | |
• | disruptions from the pending transaction; | |
• | costs relating to the transaction; | |
• | the outcome of litigation and regulatory proceedings to which Talecris or Grifols may be a party; | |
• | U.S. and Spanish tax consequences of the transaction for the Talecris stockholders; and | |
• | Talecris stockholders will have a smaller portion of the equity in the combined company than they have in Talecris. |
• | Risks Relating to the Combined Company |
• | the combined company will have substantial indebtedness, which will increase its vulnerability to general adverse economic and industry conditions and limit its ability to pursue strategic alternatives and react to changes in its business; | |
• | substantial indebtedness may limit the combined company’s ability to pay dividends; | |
• | the combined company may fail to realize some or all of the anticipated costs savings, growth opportunities and synergies; | |
• | Grifols will incur transaction, integration and restructuring costs in connection with the transaction; and | |
• | Grifols is a foreign private issuer and is exempt from a number of rules under the Exchange Act and is permitted to file less information with the SEC than a company incorporated in the United States. |
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• | Risks Relating to the Healthcare Industry |
• | changes in legal requirements affecting Grifols’ and Talecris’ industries; | |
• | the impact of competitive products and pricing and actions of competitors; | |
• | recently enacted U.S. healthcare legislation, new legislation, regulatory action or legal proceedings affecting, among other things, the U.S. healthcare system, pharmaceutical pricing and reimbursement, including Medicaid, Medicare and the Public Health Service Program; and | |
• | legislation or regulations in markets outside of the United States affecting product pricing, reimbursement, access, or distribution channels. |
• | Risks Relating to Grifols’ or Talecris’ Businesses |
• | the unprecedented volatility in the global economy and fluctuations in the financial markets; | |
• | interest rates and availability and cost of financing opportunities; | |
• | interest rate fluctuations impacting Grifols’and/or Talecris’ credit facilities; | |
• | changes in currency exchange rates; | |
• | changes in economic conditions, political conditions, trade protection measures, licensing requirements and tax matters in the countries in which Talecris or Grifols do business; | |
• | Grifols’ and Talecris’ ability to maintain compliance with government regulations and licenses, including those related to plasma collection, production, and marketing; | |
• | Talecris’ ability to resume or replace sales to countries affected by its FCPA investigation; | |
• | the risk that the future business operations of Talecris or Grifols will not be successful; | |
• | development of new products and services; the timing of, and Grifols’ and Talecris’ ability to, obtainand/or maintain regulatory approvals for new product candidates, the rate and degree of market acceptance, and the clinical utility of their respective products; | |
• | Grifols’ and Talecris’ ability to identify growth opportunities for existing products and their respective ability to identify and develop new product candidates through their respective research and development activities; | |
• | the impact of geographic and product mix on Grifols’ and Talecris’ sales and gross profit; | |
• | Grifols’ and Talecris’ ability to protect intellectual property rights; | |
• | Grifols’ and Talecris’ ability to maintain and improve cost efficiency of operations, including savings from restructuring actions; | |
• | the impact of Talecris’ substantial capital plan over the next five years; | |
• | reliance on third parties for manufacturing of products and provision of services; | |
• | Talecris’ and Grifols’ ability to procure adequate quantities of plasma and other materials which are acceptable for use in their respective manufacturing processes; | |
• | unexpected shut-downs of Grifols’ and Talecris’ manufacturing and storage facilities or delays in opening new planned facilities; | |
• | Grifols’ and Talecris’ ability to manufacture at appropriate scale to meet the market’s demand for their respective products; |
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• | fluctuations in the balance between supply and demand with respect to the market for plasma-derived products; | |
• | Grifols’ and Talecris’ and its suppliers’ ability to adhere to cGMP; | |
• | results in Grifols’ and Talecris’ prospective financial information may not be realized; and | |
• | other factors that are set forth below under the section entitled “Risk Factors.” |
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• | A reduction in the donor pool. Regulators in most of the largest markets for plasma derivative products, including the United States, restrict the use of plasma collected from specific countries and regions in the manufacture of plasma derivative products. For example, the appearance of the variant Creutzfeldt-Jakob disease, commonly referred to as “mad cow” disease (which resulted in the suspension of the use of plasma collected from U.K. residents), and concern over the safety of blood products (which has led to increased domestic and foreign regulatory control over the collection and testing of plasma and the disqualification of certain segments of the population from the donor pool) have significantly reduced the potential donor pool. The appearance of new viral strains could further reduce the potential donor pool. Also, improvements in socio-economic conditions in the areas where Grifols’ and Grifols’ suppliers’ collection centers are located |
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can reduce the attractiveness of financial incentives for donors, resulting in increased donor feesand/or a reduction in the number of donors; |
• | Regulatory requirements. The collection of plasma is heavily regulated, and Grifols’ ability to collect plasma (or to increase plasma collection) through Grifols’ collection centers, or to obtain plasma from other suppliers, may be limited or disrupted by the inability to obtain or maintain necessary regulatory licenses to operate plasma collection centers in a timely manner or at all, or by the temporary or permanent shutdown of Grifols’ or Grifols’ suppliers’ plasma collection centers as a result of regulatory violations; and | |
• | Plasma supply sources. In recent years, there has been vertical integration in the industry as plasma derivatives manufacturers have been acquiring plasma collectors. Plasma availability in the United States grew from approximately 13.7 million liters in 2002 to approximately 20.1 million liters in 2009, while the number of plasma collection centers declined from 407 to 366 during the same period. Any significant disruption in supply of plasma or an increased demand for plasma may require plasma from alternative sources, which may not be available on a timely basis. |
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• | decreased demand for its products and any product candidates that Grifols may develop; | |
• | injury to Grifols’ reputation; | |
• | withdrawal of clinical trial participants; | |
• | costs to defend the related litigation; | |
• | substantial monetary awards to trial participants or patients; | |
• | loss of revenue; and | |
• | the inability to commercialize any products that Grifols may develop. |
• | restrictions on such products or manufacturing processes; | |
• | withdrawal of products from the market; | |
• | voluntary or mandatory recall; | |
• | suspension or withdrawal of regulatory approvals and licenses; |
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• | cessation of Grifols’ manufacturing activities, which may be for an extended or indefinite period of time; | |
• | product seizure; and | |
• | injunctions or the imposition of civil or criminal penalties. |
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• | necessarily make numerous assumptions, many of which are beyond the control of Grifols and may not prove to be accurate; | |
• | do not necessarily reflect revised prospects for Grifols’ or the combined company’s businesses, changes in general business or economic conditions, or any other transaction or event that has subsequently occurred or that may occur and that was not anticipated at the time the forecasts were prepared; and | |
• | are not necessarily predictive of actual future results, which may be significantly more favorable or less favorable than reflected in the forecasts. |
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• | A lack of alternative plasma supply sources. In recent years, there has been consolidation in the industry as several plasma-derived manufacturers have acquired previously independent plasma collectors. As a result, it could be difficult or impossible to resolve any significant disruption in the supply of plasma or an increased demand for plasma with plasma from alternative sources. | |
• | A reduction in the donor pool. Regulators in most of the large markets for plasma-derived products, including the United States, restrict the use of plasma collected from specific countries and regions in the manufacture of plasma derivative products. For example, the appearance of the variant Creutzfeldt-Jakob disease, commonly referred to as “mad cow” disease (which resulted in the suspension of the use of plasma |
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collected from U.K. residents), and concern over the safety of blood products (which has led to increased domestic and foreign regulatory control over the collection and testing of plasma and the disqualification of certain segments of the population from the donor pool), have significantly reduced the potential donor pool. |
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• | decreased demand for its products and any product candidates that Talecris may develop; | |
• | injury to Talecris’ reputation; | |
• | withdrawal of clinical trial participants; | |
• | costs to defend the related litigation; | |
• | substantial monetary awards to trial participants or patients; | |
• | loss of revenue; and | |
• | the inability to commercialize any products that Talecris may develop. |
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• | restrictions on such products or manufacturing processes; | |
• | withdrawal of products from the market; | |
• | voluntary or mandatory recall; | |
• | suspension or withdrawal of regulatory approvals and licenses; | |
• | cessation of Talecris’ manufacturing activities, which may be for an extended or indefinite period of time; | |
• | product seizure; and | |
• | injunctions or the imposition of civil or criminal penalties. |
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• | regulators or institutional review boards may not authorize Talecris to commence a clinical trial or conduct a clinical trial within a country or at a prospective trial site respectively; | |
• | the regulatory requirements for product approval may not be explicit, may evolve over time and may diverge by jurisdiction; | |
• | Talecris’ preclinical tests or clinical trials may produce negative or inconclusive results, and Talecris may decide, or regulators may require Talecris, to conduct additional preclinical testing or clinical trials or Talecris may abandon projects that Talecris had expected to be promising; | |
• | the number of patients required for Talecris’ clinical trials may be larger than Talecris anticipates, enrollment in Talecris’ clinical trials may be slower than Talecris currently anticipates, or participants may drop out of Talecris’ clinical trials at a higher rate than Talecris anticipates, any of which would result in significant delays; | |
• | Talecris’ third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to Talecris in a timely manner; |
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• | Talecris might have to suspend or terminate its clinical trials if the participants are being exposed to unacceptable health risks or if any participant experiences an unexpected serious adverse event; | |
• | regulators or institutional review boards may require that Talecris hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; | |
• | undetected or concealed fraudulent activity by a clinical researcher, if discovered, could preclude the submission of clinical data prepared by that researcher, lead to the suspension or substantive scientific review of one or more of Talecris’ marketing applications by regulatory agencies, and result in the recall of any approved product distributed pursuant to data determined to be fraudulent; | |
• | the cost of Talecris’ clinical trials may be greater than Talecris anticipates; | |
• | the supply or quality of Talecris’ product candidates or other materials necessary to conduct Talecris’ clinical trials may be insufficient or inadequate because Talecris does not currently have any agreements with third-party manufacturers for the long-term commercial supply of any of Talecris’ product candidates; | |
• | an audit of preclinical or clinical studies by the FDA or other regulatory authority may reveal noncompliance with applicable regulations, which could lead to disqualification of the results and the need to perform additional studies; and | |
• | the effects of Talecris’ product candidates may not achieve the desired clinical benefits or may cause undesirable side effects or the product candidates may have other unexpected characteristics. |
• | be delayed in obtaining marketing approval for its product candidates; | |
• | not be able to obtain marketing approval; | |
• | not be able to obtain reimbursement for its products in some countries; | |
• | obtain approval for indications that are not as broad as intended; or | |
• | have the product removed from the market after obtaining marketing approval. |
• | the prevalence and severity of any side effects; | |
• | the efficacy and potential advantages over alternative treatments; | |
• | the ability to offer Talecris’ product candidates for sale at competitive prices; | |
• | relative convenience and ease of administration; |
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• | the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; the strength of marketing and distribution support; and | |
• | sufficient third-party coverage or reimbursement. |
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• | necessarily make numerous assumptions, many of which are beyond the control of Talecris and Grifols and may not prove to be accurate; | |
• | do not necessarily reflect revised prospects for Talecris’ or the combined company’s businesses, changes in general business or economic conditions, or any other transaction or event that has subsequently occurred or that may occur and that was not anticipated at the time the forecasts were prepared; and | |
• | are not necessarily predictive of actual future results, which may be significantly more favorable or less favorable than reflected in the forecasts. |
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• | consider and vote upon a proposal to approve and adopt the merger agreement (including the reincorporation merger and the Talecris-Grifols merger contemplated by the merger agreement); and | |
• | approve the adjournment of the meeting, if necessary, to solicit additional proxies if there are not sufficient votes to adopt the merger agreement at the time of the meeting. |
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• | delivering a signed written notice of revocation to the Secretary of Talecris at: |
4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Attn.: Secretary
• | submitting another proxy bearing a later date (in any of the permitted forms); or | |
• | attending and casting a ballot in person at the Talecris special meeting, although your attendance alone will not revoke your proxy. |
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• | Value of the Merger Consideration; Historical Market Prices and Performance of Talecris. The Talecris Board of Directors considered the value of the merger consideration, including: |
• | the implied per share value of the merger consideration and the premium to the price of Talecris common stock as of various dates represented by such implied value. Based on the closing price of Grifols ordinary shares as of June 4, 2010, the last trading day preceding the date on which the merger agreement was signed, and then-prevailing euro-U.S. Dollar exchange rates, and assuming the non-voting shares trade at no discount to the trading price of Grifols ordinary shares, the implied merger consideration of $26.16 per |
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share of Talecris common stock represents: (1) a premium of approximately 64% over the closing market price of $15.92 for Talecris common stock on June 4, 2010, (2) a premium of approximately 54% over the volume-weighted average price of Talecris common stock for the30-day period ending on June 6, 2010, and (3) a premium of approximately 37.7% over the sale price of Talecris common stock of $19.00 per share in Talecris’ October 2009 IPO, less than nine months prior to the signing of the merger agreement, representing an internal rate of return of approximately 50% for Talecris stockholders that acquired Talecris common stock at that time. Although the foregoing calculations assumed the non-voting stock would trade at no discount to the trading price of Grifols ordinary shares, Talecris’ directors noted that the various premia would be substantial even if the Grifols non-voting shares were to trade at a significant discount relative to the Grifols ordinary shares and that the implied total enterprise value attributed to Talecris based on the total consideration payable in the Talecris-Grifols merger by Grifols for Talecris is substantially higher than the total enterprise value attributed to Talecris by CSL in the proposed CSL merger in 2008; and |
• | the historical, present and anticipated future earnings of Talecris and the anticipated future earnings of the combined entity, sensitivity studies on the future earnings of Talecris, risks with the strategy and execution plans of Talecris, risks to the industry and to Talecris’ plans from the external environment; |
• | Significant Portion of Merger Consideration in Cash. A large portion of the merger consideration will be paid in cash, giving the Talecris stockholders an opportunity to immediately realize value for a significant portion of their investment and providing certainty of value and to diversify a portion of their current exposure to the evolving plasma industry. The Talecris Board of Directors noted that the $19.00 per share to be paid in cash matched the IPO sale price of Talecris common stock less than nine months prior to the signing of the merger agreement despite the decline in the trading prices of the common stock of Talecris’ principal publicly traded competitors since the IPO; | |
• | Participation in Potential Appreciation. The stock component of the merger consideration will give the Talecris stockholders an equity interest in the combined entity, providing them with an opportunity to participate in the future earnings or growth of the combined entity, the potential future appreciation in the value of the Grifols non-voting shares following the transaction (to the extent the Talecris stockholders determine to retain the Grifols non-voting shares following the transaction) and in the potential benefits to the combined entity, including an enhanced competitive and financial position, increased diversity and depth in its product lines, development “pipelines” and geographic areas and the potential to realize significant cost reductions and operational synergies; | |
• | Strategic Benefits of the Transaction. The Talecris Board of Directors considered the strategic benefits that may result from the transaction and the potential upside such strategic benefits may have on the Grifols non-voting shares to be issued in the Talecris-Grifols merger, including: |
• | the likelihood that the combined entity would be able to more efficiently use each liter of plasma collected to manufacture medicines due to the complementary nature of manufacturing processes and also would be more geographically diversified, and therefore would be relatively better positioned to face challenges arising out of the current and prospective competitive climate in the plasma industry, including as a result of changes in regulatory, financial and economic conditions affecting the industry; | |
• | the Talecris Board of Directors’ belief that the potential for cost savings and synergies from the transaction could be substantial, including that: |
• | in addition to the ongoing cost reduction initiatives at both companies, annual operating synergies of up to $160 million in 2012 (net of costs to achieve such synergies), increasing to up to $230 million on an ongoing basis (with no ongoing cost) after 2014 that Grifols informed Talecris it expects to be realized from the transactions. Grifols prepared these estimates, which were provided to Talecris on an aggregate basis, not broken down by categories of potential synergies; |
• | the additional savings and revenue opportunities from consolidating other operations, procurement savings, and sharing support infrastructure and best practices; |
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• | the potential created by the expanded global presence and geographically diverse revenue base of the combined company; and | |
• | the opportunity to combine two strong teams and the inclusion of two directors to be designated by Talecris on the Grifols Board of Directors following the transaction (however, in the event that either of such directors ceases to hold office prior to the expiration of his or her term, Talecris will not have the right to designate his or her replacement). |
• | Financial Presentations and Opinion of Financial Advisors to the Talecris Board of Directors. The Talecris Board of Directors considered the financial presentations of Morgan Stanley, and the financial presentation and opinion of Citi, dated June 6, 2010, to the Talecris Board of Directors as to the fairness, from a financial point of view and as of the date of such opinion, of the original merger consideration, as more fully described below in the section entitled “The Transaction — Opinion of Citigroup Global Markets Inc.”; |
• | Terms of the Merger Agreement. The Talecris Board of Directors considered the efforts made to negotiate a merger agreement favorable to Talecris and its stockholders and the financial and other terms and conditions of the merger agreement, including: |
• | the fact that should the merger agreement be terminated under specified circumstances relating to a failure by Grifols to obtain the necessary financing for the transaction (including the related refinancings) or relating to breach by Grifols of its covenants relating to the obtaining of financing and, at such time, specified conditions are met, Grifols will be required to pay Talecris a termination fee of $375 million, as more fully described in the section entitled “The Merger Agreement — Termination Fees; Expenses,” an amount which the Talecris Board of Directors believes strongly incentivizes Grifols to obtain the necessary financing for the transaction (including the related refinancings) and to perform its covenants relating to the obtaining of financing; and | |
• | the extent of the commitments to obtain required antitrust regulatory approvals that Grifols has made under the merger agreement, and that should the merger agreement be terminated under specified circumstances relating to a failure to obtain the requisite antitrust clearances and approvals or relating to breach by Grifols of its covenants relating to the obtaining of antitrust approvals and, at such time, specified conditions are met, Grifols will be required to pay Talecris a termination fee of $375 million, as more fully described in the section entitled “The Merger Agreement — Termination Fees; Expenses,” an amount which the Talecris Board of Directors believes strongly incentivizes Grifols to obtain the requisite antitrust clearances and approvals and to perform its covenants relating to the obtaining of antitrust approvals, or, in other circumstances involving a change of recommendation by the Grifols Board of Directors and a subsequent failure by the Grifols shareholders to grant the requisite shareholder approvals, $100 million, see the section entitled “The Merger Agreement — Termination Fees; Expenses”; |
• | Likelihood of Completion of the Transaction. The Talecris Board of Directors considered the likelihood that the transaction will be completed, including the fact that the conditions to closing the transaction are limited to approval by the Talecris stockholders and the Grifols shareholders, customary regulatory approvals and other customary closing conditions; that the Chairman and CEO of Grifols and certain other Grifols shareholders owning approximately 35% in the aggregate of the outstanding Grifols ordinary shares had agreed to vote their shares in Grifols in favor of the transaction (later increased to support from holders, in the aggregate, of approximately 43% of the outstanding Grifols ordinary shares); and that, as described above, the terms of the merger agreement strongly incentivize Grifols to obtain the necessary financing and regulatory approvals; | |
• | Financing Ability of Grifols. The Talecris Board of Directors considered the fact that Grifols has committed financing from reputable financing sources for the transaction, the efforts that Grifols is required to make under the merger agreement to obtain the proceeds of the financing on the terms and conditions described in the financing commitment letter, and the resulting likelihood that Grifols will have the financing available to complete the transaction despite the difficulties in the financial markets, including if such difficulties increase in the coming months. In this connection, however, the directors were aware that in order to obtain the full amounts necessary for completion of the transaction, Grifols would need to obtain approximately $225 million from a combination of |
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working capital increases between signing and closing and a new accounts receivable loan facility or sale and leaseback transaction, and discussed with Morgan Stanley the likelihood of and risks to obtaining such funding; |
• | Absence of Competing Alternatives or Offers. The Talecris Board of Directors also considered its belief, in consultation with its legal counsel and Morgan Stanley, that based on market conditions and antitrust considerations, as well as on Talecris’ prior efforts to seek an acquiror for Talecris or a suitable candidate for a strategic business combination, that it was unlikely that any strategic or financial acquiror was interested in pursuing a strategic transaction with Talecris or that any such potential acquiror, if interested, would be likely to make an offer that would be more valuable to the Talecris stockholders than the transactions with Grifols contemplated by the merger agreement. The Talecris Board of Directors noted that, despite potential acquirors’ knowledge that the Talecris Board of Directors and Talecris Holdings were interested in a sale of Talecris during the pendency of the CSL merger transaction, and despite Talecris’ active exploration of strategic alternatives following the termination of the CSL merger agreement, neither Talecris Holdings nor Talecris received any credible alternative proposals, nor any other credible indications of interest for alternative transactions (other than from Grifols) while the CSL merger agreement was in effect, nor had Talecris Holding or Talecris received any indications of interest for acquisition of Talecris or a business combination with Talecris during the period Talecris had explored its strategic alternatives after the termination of the CSL merger agreement. The Talecris Board of Directors noted that, in the event that any third party were to seek to make a Talecris takeover proposal, Talecris retained the ability to consider unsolicited proposals after the execution of the merger agreement and, in the event that any third party were to make a superior proposal, the Talecris Board of Directors retained the right (upon the recommendation of the Talecris special committee) to change its recommendation that the Talecris stockholders vote for the adoption of the merger agreement and that in such circumstance Talecris Holdings will not be obligated to vote all of its shares of Talecris common stock in favor of the adoption of the merger agreement, as more fully described in the section entitled “The Voting Agreements — The Talecris Voting Agreement”; |
• | Grifols Non-Voting Shares May Trade at a Significant Discount to the Grifols Ordinary Shares. There is currently no public market for the Grifols non-voting shares. In this regard, the Talecris Board of Directors considered that an active trading market for the Grifols non-voting shares may not develop after the transaction or that the Grifols non-voting shares may be negatively impacted by, or may trade at a significant discount relative to the Grifols ordinary shares due to the possibility of less liquidity or the lack of voting rights associated with the Grifols non-voting shares. Talecris’ directors also considered that the Grifols non-voting shares had been structured with a view to minimizing any such discount relative to Grifols ordinary shares, including terms that the Grifols non-voting shares participate on an equal basis with the Grifols ordinary shares in connection with all dividends and distributions and that the Grifols non-voting shares would have mandatory redemption rights or be entitled to vote as a separate class in circumstances involving a potential change of control if the Grifols non-voting shares would not otherwise be accorded equal treatment with the Grifols ordinary shares. The directors considered that, for informational purposes: |
• | Morgan Stanley calculated, based on assumed trading discounts for the Grifols non-voting shares from 40% to 0%, a range of implied values of the merger consideration per share from $23.29 to $26.15, representing a premium range from 46.3% to 64.3% over the $15.92 closing price of Talecris stock on June 4, 2010 and a premium range of 36.0% to 52.8% over the 30 calendar day volume weighted average price for Talecris stock; and |
• | Citi calculated implied per share values for Grifols non-voting shares by applying to the pro forma combined company’s fiscal year 2011 estimated net income a selected range of hypothetical fiscal year 2011 estimated price to earnings multiples and a hypothetical 5.0% to 15.0% liquidity and non-voting discount. Financial data for the combined company were based on the Talecris long-range plan, internal estimates of Grifols’ management with respect to Grifols and potential synergies anticipated to result from the transaction. This calculation implied an illustrative per share value for the stock consideration |
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based on the 0.641 exchange ratio of approximately $5.48 to $8.84 per share which, together with the $19.00 per share cash consideration, yielded a total implied value of approximately $24.50 to $27.85 per share. |
• | Fixed Stock Portion of Merger Consideration. The fact that because the stock portion of the merger consideration is a fixed exchange ratio of the Grifols non-voting shares to shares of Talecris common stock, Talecris’ stockholders could be adversely affected by a decrease in the trading price of Grifols ordinary shares during the pendency of the transaction, and, for stockholders that retain the Grifols non-voting shares, after the transaction. The Talecris Board of Directors determined that this structure was appropriate and the risk acceptable in view of factors such as: |
• | the fact that a substantial portion of the merger consideration will be paid in a fixed cash amount, reducing the impact on the value of the merger consideration of a potential decline in the trading price of Grifols ordinary shares and the Grifols non-voting shares; and | |
• | the possibility that the cost-savings and synergies expected from the transaction would positively affect the trading price of Grifols shares. |
• | Smaller Ongoing Equity Participation in the Combined Entity by Talecris Stockholders. The fact that because only a limited portion of the merger consideration will be in the form of Grifols non-voting shares, Talecris’ stockholders will have a smaller ongoing equity participation in the combined entity (and, as a result, a smaller opportunity to participate in any future earnings or growth of the combined entity and future appreciation in the value of the Grifols non-voting shares following the transaction) than they have in Talecris. The Talecris Board of Directors considered, however, that Talecris stockholders would be able to reinvest the cash received in the transaction in Grifols ordinary shares or in the Grifols non-voting shares. |
• | Risk of Non-Completion. The Talecris Board of Directors considered the possibility that the transaction might not be completed, including: |
• | the risk that regulatory agencies may not approve the transaction or may impose terms and conditions on their approvals that adversely affect the financial results of the combined company, including divestitures of key businesses (see the section entitled “— Regulatory Approvals”); | |
• | the challenges in the credit and financial markets and the risk that the required financing will not be available to Grifols. The Talecris Board of Directors noted that in the event Grifols were not to obtain the necessary financing, the transaction would likely not be completed. In such event, and subject to specified conditions being satisfied, Talecris would become entitled to receive a fee of $375 million from Grifols; | |
• | the risk that Grifols shareholder approvals required for the transaction would not be obtained. The Talecris Board of Directors noted that the Grifols Chairman and CEO and certain other Grifols shareholders owning approximately 35% in the aggregate of the outstanding Grifols ordinary shares had agreed to vote in favor of the transaction (later increased to support from holders, in the aggregate, of approximately 43% of the outstanding Grifols ordinary shares); and | |
• | other contingencies to completion of the transaction. |
• | Possible Deterrence of Competing Offers. The fact that, if the Talecris Board of Directors were to change its recommendation that the Talecris stockholders vote for the adoption of the merger agreement in response to a superior proposal, Talecris may be required to pay to Grifols a termination fee of $100 million and Talecris Holdings would be obligated to vote a number of shares of Talecris common stock representing 35% of outstanding Talecris common stock for the adoption of the merger agreement, and the possibility that these facts might discourage other parties that may otherwise have an interest in an acquisition of Talecris or another business combination involving Talecris from making a competing proposal. However, the Talecris Board of Directors believes that the $100 million termination fee (which is within the range of termination fees provided in other transactions of this size and nature) and the Talecris voting agreement are reasonable in light of Talecris’ prior efforts to seek an acquirer or a suitable candidate for a strategic business combination, the transaction negotiation process as well as the overall terms of the merger agreement, the |
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terms of the Talecris Holdings voting agreement and the Grifols shareholder voting agreements and the expected benefits of the transaction, and would not preclude another party from making a competing proposal or preclude the possibility of such competing proposal from being successful; |
• | A Holder of Approximately 49% of the Outstanding Talecris Common Stock Is Obligated to Vote In Favor of the Transaction Absent a Superior Proposal or an Intervening Event. Under the Talecris voting agreement, Talecris Holdings has agreed, with two exceptions, to vote all of its Talecris common stock in favor of the adoption of the merger agreement, unless the Talecris Board of Directors (upon the recommendation of the Talecris special committee) changes its recommendation that Talecris stockholders adopt the merger agreement in response to a superior proposal or an intervening event.Accordingly, unless there is such a change in the Talecris Board of Directors’ recommendation in response to a superior proposal or an intervening event, Talecris stockholder approval of the proposal to adopt the merger agreement is virtually assured if any Talecris stockholders in addition to Talecris Holdings vote in favor of its adoption; | |
• | Challenges of Combining Talecris and Grifols and Costs and Expenses. The challenges inherent in the combination of two businesses of the size, scope and complexity of Talecris and Grifols and the size of the companies relative to each other, including the risk that integration costs may be greater than anticipated and the possible diversion of management attention for an extended period of time. In this regard, the Talecris Board of Directors noted that such challenges may adversely impact the value of the Grifols non-voting shares to be issued in the Talecris-Grifols merger; | |
• | Possible Failure to Achieve Synergies. The risk that changes in the regulatory or competitive landscape may adversely affect the business benefits anticipated to result from the transaction and the risk of not capturing all the anticipated cost savings and operational synergies between Talecris and Grifols and the risk that other anticipated benefits might not be realized; | |
• | Possible Disruption of Business. The potential impact of the announcement and pendency of the transaction, including the impact of the transaction on Talecris’ employees and customers and Talecris’ relationships with other third parties and the risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to complete the transaction, all of which could impair Talecris’ prospects as an independent company if the Talecris-Grifols merger is not completed; | |
• | Merger Consideration is Taxable. The fact that the merger consideration would be taxable to the Talecris stockholders that are U.S. persons for U.S. federal income tax purposes; and | |
• | Other Risks. The risks of the type and nature described under the section entitled “Risk Factors” and the matters described under the section entitled “Cautionary Statement Regarding Forward-Looking Statements.” |
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• | reviewed the merger agreement, dated as of June 6, 2010; |
• | held discussions with senior officers, directors and other representatives and advisors of Talecris and senior officers and other representatives and advisors of Grifols concerning Talecris’ and Grifols’ businesses, operations and prospects; | |
• | reviewed publicly available business and financial information relating to Talecris and Grifols; | |
• | reviewed financial forecasts and other information and data relating to Talecris and Grifols which were provided to or discussed with Citi by Talecris’ and Grifols’ respective managements, including sensitivities to the financial forecasts relating to Talecris prepared by Talecris’ management reflecting alternative industry, business and growth assumptions of such management and information relating to potential strategic implications and operational benefits (including the amount, timing and achievability thereof) anticipated by Grifols’ management to result from the transaction, referred to as potential synergies; |
• | reviewed the financial terms of the transaction as set forth in the merger agreement, dated as of June 6, 2010, in relation to, among other things: current and historical market prices and trading volumes of Talecris |
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common stock and Grifols ordinary shares; data relating to trading and other characteristics of dual class securities; and Talecris’ and Grifols’ historical and projected earnings and other operating data, capitalization and financial condition; |
• | analyzed financial, stock market and other publicly available information relating to the businesses of other companies whose operations Citi considered relevant in evaluating those of Talecris and Grifols; | |
• | considered, to the extent publicly available, the financial terms of other transactions which Citi considered relevant in evaluating the transaction; | |
• | reviewed pro forma financial data of the combined company utilizing financial forecasts and estimates relating to Talecris and Grifols referred to above after giving effect to potential synergies anticipated by Grifols’ management to result from the transaction; and | |
• | conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as Citi deemed appropriate in arriving at its opinion. |
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• | Abraxis BioScience, Inc. | |
• | Acorda Therapeutics, Inc. | |
• | Actelion Pharmaceuticals Ltd. | |
• | Alexion Pharmaceuticals, Inc. | |
• | Allergan, Inc. | |
• | Amylin Pharmaceuticals, Inc. | |
• | Auxilium Pharmaceuticals, Inc. | |
• | Baxter International Inc. | |
• | Biogen Idec Inc. | |
• | BioMarin Pharmaceutical Inc. | |
• | Cephalon, Inc. | |
• | CSL | |
• | Dendreon Corporation | |
• | Elan Corporation, plc (ADS) | |
• | Endo Pharmaceuticals Holdings Inc. | |
• | Forest Laboratories, Inc. | |
• | Grifols | |
• | Human Genome Sciences, Inc. | |
• | King Pharmaceuticals, Inc. | |
• | Onyx Pharmaceuticals, Inc. | |
• | Salix Pharmaceuticals, Ltd. | |
• | Shire plc | |
• | United Therapeutics Corporation | |
• | Vertex Pharmaceuticals Incorporated | |
• | Warner Chilcott plc |
Implied per Share Equity Value | Implied Merger | |||||
Reference Ranges for Talecris Based on: | Consideration | |||||
Talecris Long-Range Plan | Talecris Street Estimates | |||||
$17.25 — $23.85 | $16.60 — $22.95 | $ | 26.15 |
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Announcement Date | Acquiror | Target | ||
8/13/08 | • CSL | • Talecris | ||
12/15/08 | • Investitori Associati SpA | • Kedrion SpA | ||
12/08/03 | • CSL | • Aventis Behring LLC |
Implied per Share Equity Value | Implied Merger | |||
Reference Range for Talecris | Consideration | |||
$18.75 — $29.75 | $ | 26.15 |
Acquiror | Target | |
• Astellas Pharma Inc. | • OSI Pharmaceuticals, Inc. | |
• Eli Lilly and Company | • ImClone Systems Incorporated | |
• Takeda Pharmaceutical Company Limited | • Millenium Pharmaceuticals, Inc. | |
• Celgene Corporation | • Pharmion Corporation | |
• Eisai Co., Ltd. | • MGI PHARMA, Inc. | |
• Eli Lilly and Company | • ICOS Corporation | |
• AstraZeneca PLC | • MedImmune, Inc. | |
• Novartis AG | • Chiron Corporation |
Implied per Share Equity Value | Implied Merger | |||
Reference Range for Talecris | Consideration | |||
$22.30 — $25.45 | $ | 26.15 |
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Implied per Share Equity Value | ||||||
Reference Ranges for Talecris Based on: | Implied | |||||
Talecris Long-Range Plan | Talecris Sensitivity Scenario | Merger Consideration | ||||
$20.55 — $26.95 | $16.20 — $21.55 | $ | 26.15 |
• | Abraxis BioScience, Inc. | |
• | Acorda Therapeutics, Inc. | |
• | Actelion Pharmaceuticals Ltd. | |
• | Alexion Pharmaceuticals, Inc. | |
• | Allergan, Inc. | |
• | Amylin Pharmaceuticals, Inc. | |
• | Auxilium Pharmaceuticals, Inc. | |
• | Baxter International Inc. | |
• | Biogen Idec Inc. | |
• | BioMarin Pharmaceutical Inc. | |
• | Cephalon, Inc. | |
• | CSL | |
• | Dendreon Corporation | |
• | Elan Corporation, plc (ADS) | |
• | Endo Pharmaceuticals Holdings Inc. | |
• | Forest Laboratories, Inc. | |
• | Human Genome Sciences, Inc. | |
• | King Pharmaceuticals, Inc. | |
• | Onyx Pharmaceuticals, Inc. | |
• | Salix Pharmaceuticals, Ltd. | |
• | Shire plc | |
• | Talecris | |
• | United Therapeutics Corporation | |
• | Vertex Pharmaceuticals Incorporated | |
• | Warner Chilcott plc |
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Implied per Share Equity Value | ||||||
Reference Ranges for Grifols Based on: | Closing Price of | |||||
Grifols Management Estimates | Grifols Street Estimates | Grifols Ordinary Shares on June 4, 2010 | ||||
$9.15 — $12.85 | $8.70 — $12.25 | $ | 11.15 |
Implied per Share Equity Value | Closing Price of | |||
Reference Range for Grifols | Grifols Ordinary Shares on June 4, 2010 | |||
$13.50 — $17.75 | $ | 11.15 |
• | historical trading prices of Talecris common stock and Grifols ordinary shares during the 52-week period ended June 4, 2010, noting that the low to high closing prices of Talecris common stock and Grifols ordinary shares during such period was $15.92 to $24.12 per share and $10.54 to $15.88 per share, respectively; | |
• | Wall Street analysts’ low and high one-year forward stock price targets for Talecris common stock (as reported by Goldman, Sachs & Co. on March 20, 2010 and Wells Fargo Securities, LLC on March 4, 2010, respectively, and discounted to present value utilizing a selected discount rate of 10.2%) of $18.15 to $28.60 per share and for Grifols ordinary shares (as reported by Société Générale S.A. on April 29, 2010 and Espiritu Santo Investment SA on December 21, 2009 and discounted to present value utilizing a selected discount rate of 10.3%) of $10.95 to $20.80 per share; and | |
• | liquidity and non-voting discounts, if any, for the following selected dual class publicly traded securities and in the following selected precedent transactions involving acquisitions of dual class shares with greater than a 1:1 voting ratio: |
• Chipotle Mexican Grill, Inc. | • News Corporation | |
• Comcast Corporation | • Mueller Water Products, Inc. | |
• Discovery Holding Company | • Molex Incorporated | |
• Freescale Semiconductor, Inc. | • SunPower Corporation | |
• Liberty Global, Inc. |
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Acquiror | Target | |
• The DIRECTV Group, Inc. | • Liberty Entertainment, Inc. | |
• Service Corporation International | • Stewart Enterprises, Inc. | |
• Mars, Incorporated | • Wm. Wrigley Jr. Company | |
• TC Group, L.L.C. | • Sequa Corporation | |
• News Corporation | • Dow Jones & Company, Inc. | |
• Investor Group | • Univision Communications Inc. | |
• InterMedia Partners, VII L.P. | • Thomas Nelson, Inc. | |
• Lee Enterprises, Incorporated | • Pulitzer Inc. | |
• Constellation Brands, Inc. | • The Robert Mondavi Corporation | |
• The Wine Group LLC | • Golden State Vinters, Inc. | |
• Omnicare, Inc. | • NCS HealthCare, Inc. | |
• Investor Group | • Nortek, Inc. | |
• Rodamco North America N.V. | • Urban Shopping Centers, Inc. | |
• Fosters Brewing Group Limited | • Beringer Wine Estates Holdings, Inc. | |
• Unilever N.V. | • Ben & Jerry’s Homemade, Inc. | |
• Tribune Company | • The Times Mirror Company | |
• Clear Channel Communications, Inc. | • SFX Entertainment, Inc. | |
• Investor Group | • Cleveland Indians Baseball Company, Inc. | |
• J.C. Penney Company, Inc. | • Genovese Drug Stores, Inc. | |
• Stone Rivet, Inc. | • Envirotest Systems Corp. | |
• AT&T Corp. | • Tele-Communications, Inc. | |
• Koninklijke Ahold N.V. | • Giant Food Inc. | |
• American Cellular Corporation | • PriCellular Corporation | |
• Berkshire Hathaway Inc. | • International Dairy Queen, Inc. | |
• Capstar/Broadcasting Corporation | • SFX Broadcasting, Inc. | |
• Leonard Green & Partners, L.P. | • Hechinger Company | |
• Barnett Banks, Inc. | • Oxford Resources Corp. | |
• Silver King Communications, Inc. | • Home Shopping Network, Inc. | |
• Corning Incorporated | • Nichols Institute | |
• Bell Atlantic Corporation | • Metro Mobile CTS, Inc. | |
• Premark International, Inc. | • Sikes Corporation |
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2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Net revenue | $ | 1,625.2 | $ | 1,761.4 | $ | 1,910.6 | $ | 2,067.7 | $ | 2,249.5 | $ | 2,499.4 | ||||||||||||
Income before income taxes | $ | 290.5 | $ | 356.1 | $ | 440.8 | $ | 488.4 | $ | 542.0 | $ | 638.7 | ||||||||||||
Net income | $ | 195.9 | $ | 241.9 | $ | 294.7 | $ | 331.9 | $ | 368.0 | $ | 426.2 |
2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
(In millions) | ||||||||||||||||||||||||
Net revenue | $ | 1,596.2 | $ | 1,692.6 | $ | 1,817.0 | $ | 1,960.9 | $ | 2,121.9 | $ | 2,341.7 | ||||||||||||
Income before income taxes | $ | 283.1 | $ | 293.6 | $ | 268.9 | $ | 405.6 | $ | 446.4 | $ | 523.9 | ||||||||||||
Net income | $ | 190.0 | $ | 200.9 | $ | 247.6 | $ | 275.7 | $ | 304.2 | $ | 357.8 |
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2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |||||||||||||||||||
($ million) | ||||||||||||||||||||||||
Net sales | $ | 1,397.6 | $ | 1,526.3 | $ | 1,680.3 | $ | 1,837.7 | $ | 2,061.3 | $ | 2,185.0 | ||||||||||||
Profit before tax | $ | 252.6 | $ | 298.4 | $ | 346.1 | $ | 410.7 | $ | 503.3 | $ | 573.1 | ||||||||||||
Net income | $ | 181.8 | $ | 214.8 | $ | 249.2 | $ | 295.7 | $ | 362.4 | $ | 412.6 |
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• | (1) such Grifols Affiliate must have complied with a volume restriction and other restrictions on the manner of sale. The volume restriction limits the number of shares that an affiliate may transfer, in the aggregate, within any three-month period to the greater of (i) 1% of the outstanding Grifols non-voting shares or Grifols new ADSs, (ii) the average weekly period trading volume in the Grifols non-voting shares or Grifols new ADSs during the preceding four calendar weeks; and (2) at least 90 days have elapsed since the date the securities were acquired in the transaction; | |
• | such Grifols Affiliate must not be, and must not have been for at least three months, an affiliate of Grifols, and at least six months have elapsed since the date the securities were acquired in the transaction; or | |
• | such Grifols Affiliate must not be, and must not have been for at least three months, an affiliate of Grifols, and at least one year has elapsed since the date the securities were acquired in the transaction. |
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Outstanding | Outstanding | Outstanding | ||||||||||||||
Talecris | Talecris | Outstanding | Talecris | |||||||||||||
Stock | Restricted | Talecris RSUs | Performance | |||||||||||||
Options That | Stock That | That Would | Shares That | |||||||||||||
Would Vest | Would Vest | Vest | Would Vest | |||||||||||||
Lawrence D. Stern | 90,070 | 186,600 | 45,366 | 80,145 | ||||||||||||
John M. Hanson | 35,266 | — | 17,763 | 19,758 | ||||||||||||
John F. Gaither, Jr. | 26,123 | — | 13,157 | 16,271 | ||||||||||||
Mary J. Kuhn | 18,286 | — | 9,210 | 16,271 | ||||||||||||
John R. Perkins | 11,755 | — | 5,921 | 16.271 | ||||||||||||
Other executive officers, as a group | 71,835 | — | 36,182 | 63,922 | ||||||||||||
Nonemployee directors, as a group | 50,048 | — | 24,152 | — |
• | accrued but unpaid base salary, paid time off, unreimbursed expenses and, to the extent terminated involuntarily without cause, his prior year bonus (collectively referred to as the “accrued benefits”); | |
• | pro-rata performance bonus at target for the year of termination if Talecris achieves the performance objectives for the year of termination (referred to as the “pro-rata target bonus”); | |
• | a lump sum payment, payable on the last business day of the month following Mr. Stern’s separation from service, equal to: |
• | base salary for the lesser of 18 months after the date of separation from service or the remaining employment term (through March 31, 2012); and | |
• | a performance bonus payment equal to the lesser of the performance bonus amount earned by Mr. Stern for the year prior to the calendar year of Mr. Stern’s separation from service or the target performance bonus; |
• | cost of continuation coverage of group health benefits pursuant to COBRA, for a maximum of 12 months; and | |
• | the vesting of all Talecris stock options, Talecris restricted stock and other Talecris equity incentives held by Mr. Stern, to the extent such awards vest based on time and as set forth in the relevant award agreements. |
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• | accrued obligations and pro-rata target bonus; | |
• | a lump sum payment, payable on the last business day of the month following such executive’s separation from service, equal to: |
• | base salary for the greater of 18 months after the date of termination or the remaining employment term; and | |
• | performance bonus payment in an aggregate amount equal to the lesser of the performance bonus amount earned by the executive for the year prior to the calendar year of the executive’s termination (without regard to any pro ration) or the executive’s target bonus, such amount we refer to as the personal performance bonus payment; |
• | cost of continuation coverage of group health benefits pursuant to COBRA up to the time that base salary is paid following termination; | |
• | in the case of Messrs. Hanson and Gaither, the vesting of Talecris stock options as set forth in such executive’s stock option agreement, or in the case of Ms. Heerdt, continued exercise of Talecris options until 90 days after her termination of employment so long as the exercise date does not occur after the expiration date of the options; and | |
• | in the case of Mr. Gaither, protection on the losses Mr. Gaither reasonably incurs from the sale of his residence and a relocation allowance. |
• | a lump sum payment, payable within 60 days following his separation from service, equal to: |
• | one year of his base salary at the time of termination; | |
• | cost of continuation coverage of group health benefits pursuant to COBRA for 12 months; and | |
• | an amount equal to Talecris’ 401(k) contribution and profit-sharing contribution for the one-year severance compensation described above; and |
• | outplacement services for 12 months not to exceed $10,000. |
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• | the Board of Directors’ belief that the combination of Grifols and Talecris will create a diversified, global provider of life-saving and life-enhancing plasma protein therapeutics built on the global presence of Grifols and the established position of Talecris in the United States and Canada; |
• | the Board of Directors’ belief that while the combination of the businesses of Grifols and Talecris may be challenging, the operations of Talecris could be integrated with those of Grifols in an efficient manner; | |
• | the belief that the transaction will accelerate key strategic initiatives for both Talecris and Grifols as it creates a more efficient platform for manufacturing, innovation and global sales and marketing; | |
• | the expectation that combining the expertise of both companies will build upon their individual legacies of patient commitment, growth and innovation while increasing the availability of high-quality plasma protein therapies for patients worldwide; | |
• | the ability of the combined company to derive more protein therapies from every liter of plasma, enhancing access and availability for patients, and optimizing use of collected plasma; | |
• | the fact that the combined company will have an established plasma collection operation capable of meeting the combined company’s needs to address increasing patient demand and an accelerated path to improving the cost efficiency of the Talecris plasma platform; | |
• | the fact that the combined company will have a broad range of key products addressing a variety of therapeutic areas such as neurology, immunology, pulmonology and hematology, among others; | |
• | the fact that the combined company will have an enhanced R&D pipeline of complementary products and new recombinant projects that are expected to drive sustainable growth; | |
• | the fact that the combined company will have a well established clinical research program in the United States; and | |
• | Grifols expects to achieve annual operating synergies of up to $160 million in 2012 (net of costs to achieve such synergies), increasing to up to $230 million on an ongoing basis (with noon-going cost) after 2014. We believe that these synergies will result from the complementary manufacturing facilities and practices, product portfolio, R&D, geographic presence and optimisation of corporate functions in the core businesses of Grifols and Talecris; the application of cross-manufacturing of intermediate products of both Grifols and Talecris submitted for FDA approval; the provision of technical support from Grifols to Talecris’ new |
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fractionation and purification facilities; the application of best practices across all operating businesses; and a combined management team that is dedicated to the integration process. |
• | Talecris’ financial condition, results of operations, business, reputation, risks and prospects; | |
• | the results of business, financial, accounting, legal and operational due diligence on Talecris performed by Grifols’ senior management and legal counsel; | |
• | current industry, economic and market conditions and trends, including Talecris’ competitive position; | |
• | because the exchange ratio under the merger agreement is fixed (i.e., will not be adjusted for fluctuations in the market price of Grifols ordinary shares or Talecris common stock), the per share value of the merger consideration to be paid to Talecris stockholders on completion of the transaction could be significantly more or less than the implied value of the merger consideration, assuming that the prices for the Grifols non-voting shares were equivalent to the prices for the Grifols ordinary shares immediately prior to the announcement of the merger agreement; | |
• | the terms and conditions of the merger agreement, including the possible payment of a termination fee to Talecris under certain circumstances and the restrictions on the ability of Grifols to entertain third-party acquisition proposals, which the Grifols Board of Directors considered reasonable in light of the context of the entire transaction and commercial practice; and | |
• | the fact that stockholder approval of the transaction would be required from both Talecris and Grifols and that approximately 49% of the voting power of Talecris common stock is subject to a voting agreement with Grifols and approximately 35% of the voting power of Grifols ordinary shares had entered into voting agreements with Talecris. |
• | the possibility that the transaction might not be completed as a result of the failure to obtain the required approvals from Talecris’ stockholders or Grifols’ stockholders, the failure by Grifols to obtain financing, or otherwise, and the effect the resulting termination of the merger agreement may have on the trading price of Grifols ordinary shares and Grifols’ operating results, including the possible payment of a $375 million termination fee in connection therewith; | |
• | the risk that the additional debt to be incurred in connection with the transaction could have a negative impact on Grifols’ ratings and operational flexibility; | |
• | the risk that regulatory agencies may not approve the transaction or may impose terms and conditions on their approvals that adversely affect the financial results of the combined company, including divestitures of key businesses (see the section entitled “The Transaction — Regulatory Approvals Required for the Talecris-Grifols Merger”); | |
• | the possible disruption to Grifols’ business that may result from the transaction, including the resulting distraction of the attention of Grifols’ management, and the costs and expenses associated with completing the transaction; | |
• | the substantial charges to be incurred in connection with the transaction, including costs of integrating the businesses of Grifols and Talecris and transaction expenses arising from the transaction; | |
• | the risk that management’s efforts to integrate Talecris may disrupt Grifols’ operations; | |
• | the risk that the potential benefits, synergies and cost savings sought in the transaction will not be realized or will not be realized within the expected time period; and | |
• | the risks described in the section entitled “Risk Factors.” |
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• | not vote in favor of the adoption of the merger agreement, or vote against the adoption of the merger agreement or abstain if voting by proxy; |
• | file a written notice with Talecris of an intention to exercise rights of appraisal of their shares before the special meeting; |
• | follow the procedures set forth in Section 262 of the DGCL; and |
• | not accept the general merger consideration. |
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• | the transaction is abandoned; or |
• | the Talecris stockholder fails to make a timely written demand for appraisal. |
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• | there not having occurred since December 21, 2009 any “material adverse effect” (as defined in the commitment letter in a manner substantially the same as the definition of such term in the merger agreement. See the section entitled “— The Merger Agreement — Representations and Warranties”), but applicable to Grifols and its subsidiaries and Talecris and its subsidiaries, taken as a whole; |
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• | the merger agreement shall not have been amended or waived and no consent shall have been given in a manner which would be materially adverse to the lenders, nor the amount or form of the purchase price for the acquisition shall have been changed, in each case without the consent of the arrangers; | |
• | the structure of the acquisition or of the financing of the acquisition shall not be changed in a manner which would be material and adverse to the lenders, as reasonably determined by the arrangers; | |
• | in the event that in order to obtain the clearance of the merger under theHart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, there shall be required a divestiture, sale, license, holding separate, other disposition or other change to any assets or business of Grifols, its subsidiaries or controlled affiliates or Talecris or its controlled affiliates, which is referred to as a required disposal, then the prior written consent of the arrangers will be required to the extent that the assets and businesses comprising such required disposals (i) in the aggregate, contribute for more than 10% of pro forma consolidated adjusted EBITDA of Grifols and Talecris and their respective subsidiaries, taken together, after giving effect to the acquisition and without giving effect to any dispositions required under the merger agreement for the four-fiscal quarter period most recently ended prior to the closing date of the transaction for which internal financial statements are available and the four-fiscal quarter period commencing immediately after the closing date of the transaction (which calculation will be subject to certain adjustments the arrangers agree are appropriate, including, without limitation, any increase in pro forma consolidated adjusted EBITDA of Grifols and Talecris and their respective subsidiaries that is, or is expected to be, directly attributable to assets or businesses of Grifols and Talecris and their respective subsidiaries remaining after such required disposals that the arrangers reasonably determine replaces the pro forma consolidated adjusted EBITDA attributable to the required disposals), and (ii) constitute, in the aggregate, more than 10% of the consolidated balance sheet assets of Grifols and Talecris and their respective subsidiaries, taken together, on the last day of the four-fiscal quarter period most recently ended prior to the closing date of the transaction for which internal financial statements are available; | |
• | the repayment of all material indebtedness of Grifols, Talecris and their respective subsidiaries, other than indebtedness reasonably acceptable to by the arrangers; | |
• | the receipt of cash proceeds in an amount not less than $225 million from a combination of working capital increases between signing and closing and a new accounts receivable loan facilityand/or sale/leasebacks; | |
• | all accrued costs, fees and expenses under the commitment letter, an engagement letter and a fee letter referred to in the commitment letter shall have been paid; | |
• | receipt by the arrangers of (i) audited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of Grifols and of Talecris for the three most recently completed fiscal years ended at least 90 days before the closing date of the transaction; (ii) unaudited consolidated balance sheets and related statements of income, stockholders’ equity and cash flows of Grifols and of Talecris for each subsequent fiscal quarter ended at least 45 days before the closing date of the transaction (which will have been reviewed by the respective independent accountants as provided in Statement of Auditing Standards No. 100) and (iii) a pro forma balance sheet and consolidated statement of income of Grifols for the most recently completed fiscal year and the most recently ended four-fiscal quarter period ended at least 45 days before the closing date of the transaction, in each case prepared after giving effect to the acquisition and related financings; | |
• | the arrangers’ reasonable satisfaction that the ratio of consolidated net debt to pro forma consolidated adjusted EBITDA of Grifols and Talecris and their subsidiaries after giving effect to the acquisition and any dispositions required under the merger agreement (plus $85 million of synergies) for the four-fiscal quarter period most recently ended prior to the closing date of the transaction for which financial statements have been delivered shall not be more than 5.25:1.00; | |
• | corporate family rating on the part of Grifols from Moody’s Investors Services, Inc., corporate credit rating on the part of Grifols from Standard and Poor’s, and credit ratings for each of the credit facilities and the notes from each of Moody’s Investors Services, Inc. and Standard and Poor’s, and the arrangers having been afforded a period of at least 45 consecutive days following the receipt of such ratings and confidential information memoranda reasonably acceptable to the arrangers, in order to syndicate the credit facilities; |
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• | the engagement of one or more investment banks to sell or privately place the notes, the receipt by such investment banks of a preliminary offering or private placement memorandum with respect to the notes for use in a customary “high yield road show” relating to such notes and containing the information (including financial data) of the type and form customarily included in offering memoranda, private placement memoranda, prospectuses and similar documents, and the affording to the investment banks of a period of at least 30 consecutive days following receipt of the offering memorandum and prior to the closing date of the transaction to seek to offer and sell or privately place the notes with qualified purchasers; | |
• | the accuracy of certain representations and warranties and there being no default or event of default, in each case under the definitive agreements; | |
• | the negotiation, execution and delivery of definitive agreements to be entered into by Grifols, Grifols Inc. and the lenders and other customary closing documents with respect to the financing satisfactory to the arrangers; and | |
• | receipt by the lenders at least 10 days prior to the closing date of the transaction of all documentation and other information required by bank regulatory authorities under applicable “know-your-customer” and anti-money laundering rules and regulations, including the USA Patriot Act. |
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• | changes or developments in general economic, regulatory or political conditions (including changes in law), or in the securities, credit, foreign exchange or financial markets in general, in each case to the extent such changes do not adversely affect Talecris and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Talecris and its subsidiaries operate; | |
• | changes or developments in or affecting the industry in which Talecris and its subsidiaries operate, including (1) changes in the general market prices of IVIG, or any other categories of therapies produced by Talecris, (2) any discovery or outbreak of a virus or the pathogen affecting plasma products generally, (3) changes in reimbursement rules or policies applicable to therapies produced by Talecris affecting plasma products or (4) changes in law, whether generally or in any particular jurisdiction, in each case to the extent such changes or developments do not adversely affect Talecris and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Talecris and its subsidiaries operate; |
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• | the enactment and implementation of the legislation known as the Patient Protection and Affordable Care Act and any amendments or reconciliations to the Patient Protection and Affordable Care Act, including the adoption or implementation of any laws, rules or regulations thereunder or in connection therewith by any governmental entity, in each case, to the extent such actions do not adversely affect Talecris and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Talecris and its subsidiaries operate; | |
• | the public announcement of the transactions contemplated by the merger agreement and the voting agreements; | |
• | the taking of any action specifically required by the merger agreement or the voting agreements; | |
• | changes in the share price or trading volume of the shares of Talecris, or changes in the rating of Talecris debt by any credit rating agencies, provided that the underlying causes of such change may be considered in determining whether there is a material adverse effect; | |
• | the failure of Talecris to meet projections or forecasts (whether internal or published), provided that the underlying causes of such failure may be considered in determining whether there is a material adverse effect; | |
• | any litigation relating to the merger agreement or the transactions contemplated by the merger agreement; or | |
• | changes in generally accepted accounting principles or the interpretation of such principles, to the extent such changes do not adversely affect Talecris and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Talecris and its subsidiaries operate. |
• | changes or developments in general economic, regulatory or political conditions (including changes in law), or in the securities, credit, foreign exchange or financial markets in general, in each case to the extent such changes do not adversely affect Grifols and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Grifols and its subsidiaries operate; | |
• | changes or developments in or affecting the industry in which Grifols and its subsidiaries operate, including changes in law, whether generally or in any particular jurisdiction, in each case to the extent such changes or developments do not adversely affect Grifols and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Grifols and its subsidiaries operate; | |
• | the enactment and implementation of the legislation known as the Patient Protection and Affordable Care Act and any amendments or reconciliations to the Patient Protection and Affordable Care Act, including the adoption or implementation of any laws, rules or regulations thereunder or in connection therewith by any governmental entity, in each case to the extent such actions do not adversely affect Grifols and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Grifols and its subsidiaries operate; | |
• | the public announcement of the transactions contemplated by the merger agreement; | |
• | changes in the share price or trading volume of the shares of Grifols ordinary shares or changes in the rating of the indebtedness of Grifols or any of its subsidiaries by, or in the listing of Grifols or any of its subsidiaries on any watch list of, any credit rating agencies, provided that the underlying causes of such change may be taken into account in determining whether there is a material adverse effect with respect to Grifols; |
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• | the failure of Grifols to meet projections or forecasts (whether internal or published), provided that the underlying causes of such failure may be considered in determining whether there is a material adverse effect with respect to Grifols; | |
• | any litigation relating to the merger agreement or the transactions contemplated by the merger agreement; or | |
• | changes in European Union-International Financial Reporting Standards, which is referred to as EU-IFRS, or the interpretation of EU-IFRS, to the extent such changes do not adversely affect Grifols and its subsidiaries in a substantially disproportionate manner relative to other participants in the industries in which Grifols and its subsidiaries operate. |
• | have been qualified by information set forth in confidential disclosure schedules exchanged by the parties in connection with signing the merger agreement — the information contained in these schedules modifies, qualifies and creates exceptions to the representations and warranties in the merger agreement; | |
• | have been qualified by information set forth in Talecris’ SEC reports, in the case of Talecris, and in Grifols’ filings with the CNMV, in the case of Grifols — the information contained in Talecris’ SEC reports and in Grifols’ filings with the CNMV qualifies and, therefore, to the extent applicable creates exceptions to the representations and warranties in the merger agreement of Talecris and Grifols, respectively; | |
• | will not survive consummation of the transaction and cannot be the basis for any claims under the merger agreement by the other party after termination of the merger agreement except in the event of fraud; | |
• | may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to the merger agreement if those statements turn out to be inaccurate; and | |
• | are subject to the materiality and material adverse effect standards described in the merger agreement, which may differ from what may be viewed as material by you. |
• | corporate organization, standing and corporate power; | |
• | capital structure; | |
• | authority relative to execution and delivery of the merger agreement and the voting agreements; | |
• | absence of conflicts with, or violations of, organizational documents or other obligations as a result of entering into the merger agreement and the voting agreements and completing the transaction; | |
• | governmental filings and consents necessary to complete the transaction; | |
• | the filing of documents with the SEC since October 6, 2009, in the case of Talecris, and with the CNMV since December 31, 2008, in the case of Grifols, and the information contained in those documents; | |
• | information supplied for the registration statement onForm F-4 of which this joint proxy statement/prospectus forms a part and for this joint proxy statement/prospectus; | |
• | the absence of a material adverse effect on such party since December 31, 2009; | |
• | absence of litigation and investigations; | |
• | specified contracts; | |
• | compliance with laws; | |
• | voting requirements with respect to the transaction, the merger agreement and the transactions contemplated by the merger agreement; |
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• | brokers’ and advisors’ fees related to the transaction; and | |
• | opinions of their respective financial advisors. |
• | the structure and organization of its subsidiaries; | |
• | indebtedness; | |
• | its outstanding stock options; | |
• | its restricted stock, restricted stock units and stock-based compensation awards; | |
• | labor relations; | |
• | compliance with the Employee Retirement Income Security Act, which is referred to as ERISA; | |
• | tax matters; | |
• | absence of tax-relatedgross-ups; | |
• | title to properties; | |
• | intellectual property; | |
• | insurance; | |
• | affiliated transactions; | |
• | state takeover laws and company certificate provisions; and | |
• | absence of a default or event of default (each, as defined in the indenture under which Talecris’ 7.75% Notes were issued), other than those resulting from the borrowing of funds to be applied to the deposit in connection with the defeasance of the 7.75% Notes. |
• | conduct its business in the ordinary course of business; and | |
• | use its reasonable best efforts to (1) preserve intact its current business organization and goodwill, (2) keep available the services of its current officers, key employees and consultants (but without any obligation to pay any additional compensation or provide additional benefits) and (3) preserve its relationships with customers, suppliers, licensors, licensees, distributors and governmental entities having regulatory dealings with it. |
• | declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock; |
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• | issue, deliver, sell, grant, pledge or otherwise encumber any shares of its capital stock, any other voting securities or any securities convertible into or exercisable for, any such shares, voting securities or convertible securities or other equity interests; | |
• | amend its amended and restated certificate of incorporation, which is referred to as Talecris’ certificate of incorporation, or its bylaws or other comparable charter or organizational documents; | |
• | directly or indirectly acquire (either by merger, consolidation, purchase of assets, an investment or in any other manner) any entity or division, business or equity interest of any entity, or any assets, rights or properties, except, in each case, for acquisitions of assets, rights or properties in the ordinary course of business, acquisitions not exceeding $1 million in the aggregate, acquisitions in connection with the acquisition or operation of plasma collection centers, and acquisitions of licenses in the ordinary course of business; | |
• | sell, pledge, dispose of, transfer, abandon, lease or license any material properties, rights or assets exceeding $1 million in the aggregate; | |
• | incur or otherwise acquire or modify in any material respects the terms of, any indebtedness for borrowed money, or make any loans or advances that would result in the aggregate principal amount of all loans and advances of Talecris and its subsidiaries exceeding $1 million; | |
• | make or commit to any new capital expenditures in excess of 110% of those disclosed in Talecris’ most recent annual report; | |
• | pay, discharge, settle or satisfy any material claims, liabilities, obligations or actions, except as required by law or any judgment by a court of competent jurisdiction, in excess of an agreed amount; | |
• | enter into, materially modify or terminate specified material contracts, except in the ordinary course of business; | |
• | adopt, enter into, terminate or amend any company benefit plan, except as would not result in a material increase in the cost of the relevant company benefit plan or for amendments and terminations in the ordinary course of business consistent with past practice; | |
• | except as required pursuant to a company benefit plan, grant, pay or promise to pay any severance or termination pay; increase or promise to increase compensation or fringe benefits; or grant, pay or accelerate payment of any equity or incentive awards or other benefit, or otherwise materially alter any employee benefits; enter into, modify or amend any collective bargaining agreement with any labor union; except that (i) Talecris may establish, and has established, a cash retention program in an aggregate amount not to exceed $15 million to be allocated by the Chief Executive Officer of Talecris to key employees, other than members of Talecris’ Management Committee, with each such retention bonus in an amount ranging from25-100% of the participant’s annual base salary and payable (1) 33.33% on or about September 10, 2010 or on the effective date of the transactions or the termination of the merger agreement, whichever occurs first, (2) 33.33% on or about January 14, 2011 or on the effective date of the transactions or the termination of the merger agreement, whichever occurs first, and (3) 33.33% on or about June 3, 2011 or 2 months after the effective date of the transactions, whichever occurs first or, in the event of the termination of the merger agreement, the earlier of four months after such termination or June 3, 2011 (with any unpaid installments paid in full in the event that the participant’s employment is terminated without “cause”); and (ii) that Talecris may also provide cash bonus or retention bonus amounts in lieu of equity compensation grants to no more than twenty new hires or promoted employees who would otherwise be eligible for an equity compensation grant, in the ordinary course of business consistent with past practice, in an amount up to $100,000 for vice-president level employees and up to $50,000 for director-level employees, such awards to vest on the same schedule as that applicable to awards made under the $15 million retention plan; | |
• | change accounting methods, principles or practices, except as required by law or generally accepted accounting principles in the United States; |
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• | hire or terminate (other than for cause) any employee, except in the ordinary course of business, or enter into an employment agreement with any employee, with an annual base salary of $250,000 or above; | |
• | effect or permit a “plant closing” or “mass layoff,” as contemplated by the Worker Adjustment and Retraining Notification Act, except any such plant closing or mass layoff affecting any plasma collection center that complies with the Worker Adjustment and Retraining Notification Act; | |
• | authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Talecris or any of its subsidiaries; | |
• | adopt or change any material method of tax accounting, make or change any material tax election, change an annual accounting period, settle or compromise any material tax liability, suit, claim, action, investigation, proceeding or audit for an amount in excess of amounts reserved or enter into any closing agreements with respect to any material tax liability for an amount in excess of amounts reserved; | |
• | adopt a stockholder rights plan or similar agreement; | |
• | take any action that is intended to, or could reasonably be expected to, cause the failure of a closing condition or a material delay in the consummation of the Talecris-Grifols merger; or | |
• | authorize any of, or commit, resolve, propose or agree to take any of, the foregoing actions. |
• | amend or propose to amend its certificate of incorporation or ByLaws, other than the adoption of amendments that would facilitate the completion of the Talecris-Grifols merger; | |
• | declare, set aside or pay any dividends on, or make any other distributions in respect of, any of its capital stock, other than semi-annual cash dividends in amounts calculated consistent with past practice, with usual declaration, record and payment dates; | |
• | acquire (by merger, consolidation or acquisition of stock or assets) any corporation, partnership or other business organization or division of any such corporation, partnership or other business organization, or dispose of assets or securities of Grifols or its subsidiaries, in each case if such acquisition or disposition would reasonably be expected to materially delay or impede the consummation of the Talecris-Grifols merger; | |
��� | change accounting policies or principles, except as required by changes in law or in IFRS or in the rules or policies of the CNMV; | |
• | authorize, recommend, propose or announce an intention to adopt a plan of complete or partial liquidation or dissolution of Grifols or any of its material subsidiaries; | |
• | take any action that is intended to, or could reasonably be expected to, cause the failure of a closing condition or a material delay in the consummation of the Talecris-Grifols merger; or | |
• | authorize any of, or commit, resolve, propose or agree to take any of, the foregoing actions. |
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• | proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, regardless of the consideration, the sale, divestiture, license or disposition of any assets or businesses of Talecris or its subsidiaries or controlled affiliates or of Grifols or its subsidiaries or controlled affiliates; and | |
• | otherwise taking or committing to take any actions that after the closing date would limit the freedom of Grifols, Talecris or their subsidiaries’ or controlled affiliates’ freedom of action with respect to, or its ability to retain, one or more of its or its subsidiaries’ businesses, product lines or assets; |
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• | solicit, initiate or knowingly encourage or facilitate the making or consummation of a Talecris takeover proposal; | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any non-public information in connection with or otherwise cooperate with, any Talecris takeover proposal; | |
• | waive, terminate, modify or fail to enforce any provision of any “standstill” or similar obligation of any person other than Grifols; | |
• | take any action to make the provisions of anyanti-takeover statute or regulation or anti-takeover provisions in Talecris’ organizational documents inapplicable to any takeover proposal; or | |
• | resolve, propose or agree to do any of the foregoing actions. |
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• | furnish information with respect to itself and its subsidiaries to the person making the Talecris takeover proposal, provided that all such information has previously been provided to Grifols or is provided to Grifols prior to or substantially concurrent with the time it is provided to such person making the takeover proposal; and | |
• | participate in discussions or negotiations with the person making the Talecris takeover proposal. |
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• | solicit, initiate or knowingly encourage or facilitate the making or consummation of a Grifols alternative proposal; | |
• | enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any person any nonpublic information in connection with or otherwise cooperate with, any Grifols alternative proposal; | |
• | approve, adopt or recommend, or publicly propose to approve, adopt or recommend a merger agreement or similar contract with respect to a Grifols alternative proposal; or | |
• | resolve, propose or agree to do any of the foregoing actions. |
• | make a change to the Talecris Board of Directors’ recommendation that Talecris stockholders vote “FOR” the adoption of the merger agreement; or | |
• | approve, adopt or recommend, or publicly propose to approve, adopt or recommend, or allow Talecris or any of its subsidiaries to enter into, a merger agreement, letter of intent or other agreement or any tender offer providing for, with respect to, or in connection with, any Talecris takeover proposal. |
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• | amending Grifols’ organizational documents by adopting the form amendments to Grifols ByLaws, a copy of which is attached as Exhibit F to the merger agreement; | |
• | approving an increase in the share capital of Grifols in accordance with Spanish law for the issuance of the Grifols non-voting shares to be issued and delivered to Talecris stockholders in the transaction as will be necessary to pay the aggregate stock portion of the merger consideration; | |
• | approving the listing of the Grifols new ADSs on NASDAQ and of the Grifols non-voting shares on the Spanish Stock Exchanges, and quotation on the Automated Quotation System; | |
• | increasing the number of directors on the Grifols Board of Directors to create an additional vacancy; | |
• | appointing two individuals designated by Talecris to the Grifols Board of Directors, each for a five-year term; | |
• | approving the revocation of any corporate resolution that has been submitted to, or passed by, Grifols’ general shareholders meeting prior to the date of the merger agreement regarding or authorizing the redemption or repurchase of all or a part of the Grifols ordinary shares; and | |
• | delegating to the Grifols Board of Directors the requisite authority to record the Grifols ByLaw amendments in the Commercial Registry of Barcelona as promptly as reasonably practicable following the Grifols shareholder meeting and to effectuate the capital increase, amend Grifols’ organizational documents to |
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increase the capital of Grifols as necessary to pay the aggregate stock portion of the merger consideration and give full effect to the Grifols shareholder approval. |
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• | the Grifols Board of Directors will execute the decision taken at the Grifols shareholders meeting to increase the share capital and issue the Grifols non-voting shares in a number sufficient for the issuance of Grifols ADRs required to be issued and delivered as the stock portion of the merger consideration; | |
• | Grifols will cause the Grifols non-voting shares to be subscribed and fully paid up with the issuance price per share being higher than the net book value per ordinary share of Grifols, as required under Spanish law; | |
• | Grifols will (1) record the deed of capital increase, granted before a Spanish notary public and (2) have the deed of capital increase registered with the Commercial Registry of Barcelona, and take all actions, including the payment of any taxes, required for such registration of the deed of capital increase; | |
• | Grifols will deliver the deed of capital increase to, and make all other filings with, the Spanish Stock Exchanges, the CNMV and the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A., which is the Spanish settlement and clearing system and referred to as Iberclear, necessary for the Grifols non-voting shares to be listed on the Spanish Stock Exchanges and registered in the book-entry registries of Iberclear and in the name of the depositary; and | |
• | Grifols will cause the Grifols non-voting shares to be issued and delivered as the common stock portion of the share consideration, as contemplated by the merger agreement. |
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• | recognize such employees’ service with Talecris prior to the transaction for purposes of eligibility, vesting and accrual of benefits under any employee benefit plan to the same extent that such service was recognized under the comparable plans of Talecris and its subsidiaries in which such employees participated prior to the transaction (except as would result in a duplication of benefits, for any purposes under a defined benefit pension plan or any post-employment health or welfare plan, or under newly established plans for which prior service with is not taken into account for Grifols’ employees generally); | |
• | use reasonable best efforts to waive any preexisting condition limitations, exclusions and waiting periods under any such plans that are welfare benefit plans maintained by Grifols or subsidiaries, except to the extent that such pre-existing condition limitations, exclusions and waiting periods would not have been satisfied or waived under the comparable plan of Talecris and its subsidiaries in which such employees participated prior to the transaction; and | |
• | provide each continuing employee with credit for any copayments and deductibles paid prior to the Talecris-Grifols merger in satisfying any analogous deductible orout-of-pocket requirements to the extent applicable under any such plan, to the extent credited under the welfare plans maintained by Talecris prior to the Talecris-Grifols merger. |
• | maintain in effect the commitment letter for the commitment period set forth therein; | |
• | negotiate definitive agreements with respect to the commitment letter on the terms and conditions set forth in the commitment letter; | |
• | satisfy on a timely basis all conditions to the funding of the financing contemplated by the commitment letter that are within its control, and comply with its obligations and enforce its rights under the commitment letter; and | |
• | seek to obtain such third-party consents as may be reasonably required in connection with the financing contemplated by the commitment letter. |
• | does not expand upon the conditions precedent to the financing as set forth in the original commitment letter (whether by adding additional conditions precedent or modifying conditions precedent contained in the original commitment letter); |
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• | provides for a financing amount not less than the amount necessary to satisfy all of Grifols’ obligations under the merger agreement (including the payment of the merger consideration and the payment of any debt required to be repaid in connection with the transaction and of all fees and expenses reasonably expected to be incurred in connection with the merger agreement) in full after taking into account Grifols’ available, unrestricted cash on hand, cash equivalents and marketable securities and $225 million in reasonably anticipated proceeds from accounts receivable financings, working capital improvementsand/or sale-leaseback arrangements; and | |
• | does not prevent or materially delay the consummation of the transactions contemplated by the merger agreement. |
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• | the adoption of the merger agreement by the holders of a majority of the outstanding shares of Talecris common stock; | |
• | the approval of the following matters by the majority described under “Grifols Shareholder Meeting; Recommendation of the Grifols Board of Directors”; |
• | amending Grifols’ organizational documents by adopting the form amendments to Grifols ByLaws, a copy of which is attached as Exhibit F to the merger agreement; | |
• | approving an increase in the share capital of Grifols in accordance with Spanish law for the issuance of the Grifols non-voting shares to be issued and delivered to Talecris stockholders in the transaction as will be necessary to pay the aggregate stock portion of the merger consideration; | |
• | approving the listing of the Grifols new ADSs on NASDAQ and of the Grifols non-voting shares on the Spanish Stock Exchanges, and quotation on the Automated Quotation System; | |
• | increasing the number of directors on the Grifols Board of Directors to create an additional vacancy; | |
• | appointing two individuals designated by Talecris to the Grifols Board of Directors, each for a five-year term; | |
• | approving the revocation of any corporate resolution that has been submitted to, or passed by, Grifols’ general shareholders meeting prior to the date of the merger agreement regarding or authorizing the redemption or repurchase of all or a part of the Grifols ordinary shares; and | |
• | delegating to the Grifols Board of Directors the requisite authority to record the Grifols ByLaw amendments in the Commercial Registry of Barcelona as promptly as reasonably practicable following the Grifols shareholder meeting and to effectuate the capital increase, amend Grifols’ organizational documents to increase the capital of Grifols as necessary to pay the aggregate stock portion of the merger consideration and give full effect to the Grifols shareholder approval; |
• | the absence of restraint condition, or the absence of any temporary restraining order or preliminary or permanent injunction or other judgment or order issued by any court of competent jurisdiction that prohibits or prevents the completion of the Talecris-Grifols merger; the absence of any law enacted, issued, enforced, entered or promulgated that prohibits or makes illegal the consummation of any of the transactions contemplated by the merger agreement; | |
• | the antitrust condition, or the expiration or termination of all applicable waiting periods under (1) the HSR Act and (2) the German Antitrust Act with respect to the transactions contemplated by the merger agreement and the receipt of all applicable approvals and authorizations under the Spanish Competition Law with respect to the transactions contemplated by the merger agreement, whether implicitly through the expiration of any waiting period or explicitly by resolution; and | |
• | the effectiveness under the Securities Act of the registration statement onForm F-4 of which this joint proxy statement/prospectus forms a part and the absence of any stop order or proceedings initiated by the SEC for that purpose. |
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• | the Grifols representations and warranties condition, or |
• | the truth and correctness in all material respects, as of the date of the merger agreement and of the closing date, of Grifols’ representations and warranties regarding its authority to consummate the Talecris-Grifols merger, the absence of contravention against specified laws, the financing and the vote necessary to obtain the requisite Grifols shareholder approval; | |
• | the truth and correctness in all butde minimisrespects, as of the date of the merger agreement and of the closing date, of Grifols’ representations and warranties regarding its capital structure; | |
• | the truth and correctness in all respects, as of the date of the merger agreement and of the closing date, of Grifols’ representations and warranties regarding the absence of a material adverse effect on it; and | |
• | the truth and correctness, as of the date of the merger agreement and of the closing date, of all of Grifols’ other representations and warranties contained in the merger agreement, except as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Grifols; |
• | the performance or compliance, in all material respects, of Grifols and Grifols, Inc. of all of their obligations under the merger agreement at or prior to the consummation of the transaction; | |
• | the approval and registration of a prospectus relating to the Grifols non-voting shares or of such other documentation required under applicable Spanish law; | |
• | the valid issuance of the Grifols non-voting shares; | |
• | the admission of the Grifols non-voting shares for listing on the Spanish Stock Exchanges, and quotation on the Automated Quotation System and the approval for listing on NASDAQ of the Grifols non-voting shares in the form of Grifols new ADSs evidenced by ADRs, subject to official notice of issuance; and | |
• | the granting before a Spanish public notary, and registration by the Commercial Registry of Barcelona, of the necessary deeds in connection with the issuance of the Grifols non-voting shares and the amendments of the Grifols’ ByLaws (estatutos), which is referred to as Grifols’ ByLaws, required for such issuance. |
• | the Talecris representations and warranties condition, or |
• | the truth and correctness in all material respects, as of the date of the merger agreement and of the closing date, of Talecris’ representations and warranties regarding its authority to consummate the transaction, the vote required for the Talecris stockholders to adopt the merger agreement, the absence of conflict with state takeover laws, fees paid to brokers and advisors and the absence of conflict with Talecris’ organization documents as a result of the transaction; | |
• | the truth and correctness in all butde minimisrespects, as of the date of the merger agreement and of the closing date, of Talecris’ representations and warranties regarding its capital structure; | |
• | the truth and correctness in all respects, as of the date of the merger agreement and of the closing date, of Talecris’ representations and warranties regarding the absence of a material adverse effect on it; and | |
• | the truth and correctness, as of the date of the merger agreement and of the closing date, of all of Talecris’ other representations and warranties contained in the merger agreement, except as would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on Talecris; |
• | the performance or compliance, in all material respects, of Talecris of all of its obligations under the merger agreement at or prior to the consummation of the transaction; |
• | the delivery by Stream Merger Sub of the resignation of each member of its Board of Directors, effective as of the Closing of the Talecris-Grifols merger; and |
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• | either: |
• | the aggregate number qualifying dissenting shares does not exceed 15% of the total number of issued and outstanding Talecris shares not held by Talecris specified affiliated stockholders, or |
• | if the aggregate number of qualifying dissenting shares exceeds this 15% threshold, Talecris Holdings agrees to indemnify Grifols for the total incremental cost (by which the appraised fair value exceeds the value of the merger consideration), if any, for the dissenting shares exceeding the 15% threshold (calculated as described in the section entitled “The Transaction — Agreements with Respect to Appraisal or Dissenting Shares.”); |
• | the transaction does not occur on or before the outside date; however, the right to terminate the merger agreement under the circumstances described in this bullet point will not be available (1) except as described below, to a party whose breach of an agreement or covenant in the merger agreement has been a proximate cause of, or resulted in, the failure of the Talecris-Grifols merger to be consummated on or before the outside date, (2) to Talecris, if Talecris Holdings’ material breach of the Talecris voting agreement has been a proximate cause of, or resulted in, the failure of the Talecris-Grifols merger to be consummated on or before the outside date or (3) to Grifols, if the material breach (or breaches) by one or more of the Grifols shareholders who is a party to a Grifols voting agreement has (or have) been, individually or in the aggregate, a proximate cause of, or resulted in, the failure of the Talecris-Grifols merger to be consummated on or before the outside date; | |
As an exception to clause (1), Grifols has the right to terminate the merger agreement under the circumstances described in the bullet above even if it or Grifols, Inc. breaches the merger agreement in a manner (x) that constitutes or results in, or would constitute or result in, a breach of (or that includes a breach that constitutes or results in, or would constitute or result in, a breach of) Grifols’ or Grifols, Inc.’s covenants to obtain the financing contemplated by the commitment letter (or alternative financing) or to obtain all the requisite approvals and clearances for the transactions contemplated by the merger agreement under all applicable antitrust laws or (y) that causes or results in, or would cause or result in, a failure of Grifols or Grifols, Inc. to conduct the closing or consummate the transactions contemplated by the merger |
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agreement by the outside date because of a failure to receive the proceeds from the financing contemplated by the commitment letter (or alternative financing) or otherwise due to a lack of funds, or a failure of either of the antitrust condition or the absence of restraint condition (as a result of the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws). However, this exception will not apply if (A) Grifols or Grifols, Inc. breaches its respective obligations to consummate the transaction and to conduct the closing upon the satisfaction or (to the extent legally permitted) waiver of the mutual conditions and the conditions to the obligations of Grifols’ and Grifols, Inc.’s obligations to effect the transaction if the financing contemplated by the commitment letter (or alternative financing) (including any bridge or interim financing that is part of such financing or such alternative financing) is available, in accordance with the terms and conditions of such financing, (B) Grifols or Grifols, Inc. breaches Grifols’ obligations to use its reasonable best efforts to enforce its rights under the commitment letter and to cause the lenders and the other persons providing such financing contemplated by the commitment letter (or alternative financing) to fund such financing (or alternative financing) required to consummate the transaction on the closing date in accordance with the terms of such financing (or alternative financing), including by commencing a litigation proceeding against any breaching financial institution or institutions in which Grifols will use its reasonable best efforts to compel such breaching institution or institutions to provide its portion of such financing as required or (C) Grifols breaches its obligations to negotiate definitive agreements with respect to the financing contemplated by the commitment letter on the terms and conditions set forth in the commitment letter and Talecris is entitled to seek (and has sought and continues to seek) specific performance of the applicable breach pursuant to the merger agreement; |
In the event that Grifols terminates the merger agreement under the circumstances described above, including circumstances where Grifols or Grifols, Inc. has breached the merger agreement, but still has the right to terminate the merger agreement under the circumstances described above, Talecris may be entitled tobreak-up fee. The merger agreement provides that if specified conditions are met, and the merger agreement is nonetheless terminated under specified circumstances, by Grifols or Talecris, relating to (x) a failure to obtain the requisite antitrust clearances and approvals (including a failure to satisfy the absence of restraint condition as described under the section entitled “The Merger Agreement — Conditions to Complete the Transaction” as a result of the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws), or a failure by Grifols to obtain the necessary financing for the transaction (including the refinancings required in connection with the transaction) or (y) a breach by Grifols of its covenants relating to antitrust clearances and approvals, or relating to the necessary financing for the transaction (including the refinancings required in connection with the transaction), Grifols will be obligated to pay Talecris abreak-up fee of $375 million; | ||
• | a final, non-appealable order, injunction or decree permanently enjoining or prohibiting either merger has been issued by a court or other governmental entity of competent jurisdiction; provided, except as described below, that the right to terminate in circumstances described in this bullet point will not be available to any party whose breach of an agreement or covenant in the merger agreement has been a proximate cause of, or resulted in, such order, injunction or decree; | |
As an exception to the proviso above, Grifols has the right to terminate the merger agreement under the circumstances described in the bullet above even if it or Grifols, Inc. breaches the merger agreement in a manner that constitutes or results in, or would constitute or result in, a breach of (or that includes a breach that constitutes or results in, or would constitute or result in, a breach of) Grifols’ or Grifols, Inc.’s covenants to obtain all the requisite approvals and clearances for the transactions contemplated by the merger agreement under all applicable antitrust laws; | ||
In the event that Grifols terminates the merger agreement under the circumstances described above, including circumstances where Grifols or Grifols, Inc. has breached the merger agreement, but still has the right to terminate the merger agreement under the circumstances described above, Talecris may be entitled tobreak-up fee. The merger agreement provides that if specified conditions are met, and the merger agreement is nonetheless terminated under specified circumstances, by Grifols or Talecris, relating to (x) a |
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failure to obtain the requisite antitrust clearances and approvals (including a failure to satisfy the absence of restraint condition as described under the section entitled “The Merger Agreement — Conditions to Complete the Transaction” as a result of the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws) or (y) a breach by Grifols of its covenants relating to antitrust clearances and approvals, Grifols will be obligated to pay Talecris abreak-up fee of $375 million; |
• | the Talecris special meeting concludes without the adoption of the merger agreement by the Talecris stockholders; provided, however, that the right to terminate under the circumstances described in this bullet point will not be available to (1) any party whose breach of an agreement or covenant in the merger agreement has been a proximate cause of, or resulted in, such failure or (2) Talecris, if the material breach of an agreement or covenant of Talecris Holdings in the Talecris voting agreement has resulted in such failure; or | |
• | the Grifols shareholder meeting concludes without the approval by the Grifols shareholders of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders; provided, however, that the right to terminate in circumstances described in this bullet point will not be available to (1) any party whose breach of an agreement or covenant in the merger agreement has been a proximate cause of, or resulted in, such failure or (2) Grifols, if the material breach of any of the agreements or covenants contained in one or more of the Grifols voting agreements by one or more parties subject to a Grifols voting agreement has, individually or in the aggregate, resulted in such failure. |
• | Talecris breaches its representations, warranties or covenants, which breach or failure to perform would result in a failure of any of the additional closing conditions for Grifols benefit (for a description of these conditions, see the section entitled “The Merger Agreement — Conditions to Complete the Transaction”), and such breach or failure to perform is not cured or is not curable by the outside date; | |
• | prior to the adoption of the merger agreement by Talecris stockholders, the Talecris Board of Directors changes its recommendation that the Talecris stockholders adopt the merger agreement in response to a superior proposal or an intervening event; or | |
• | Talecris Holdings breaches the representations, warranties, covenants and agreements of the Talecris voting agreement with the result that Talecris is unable to comply in all material respects with its obligations to call the Talecris special meeting and solicit the approval of the Talecris stockholders of the proposal to adopt the merger agreement. |
• | Grifols breaches its representations, warranties or covenants, which breach or failure to perform would result in a failure of the condition concerning the effectiveness under the Securities Act of the registration statement onForm F-4 of which this joint proxy statement/prospectus forms a part or any of the conditions to Talecris’ obligation to complete the transaction, and such breach or failure to perform is not cured or is not curable by the outside date; | |
• | prior to approval by Grifols shareholders of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders, the Grifols Board of Directors changes its recommendation that the Grifols shareholders approve the proposal to approve such matters; or | |
• | one or more of the Grifols shareholders who are parties to a Grifols voting agreement breaches the representations, warranties, covenants and agreements of its voting agreement with the result that Grifols is unable to comply in all material respects with its obligations to call the Grifols shareholders meeting and solicit the approval of the Grifols shareholders of the proposal to approve the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders. |
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• | that constitutes or results in, or would constitute or result in, a breach of (or that includes a breach that constitutes or results in, or would constitute or result in, a breach of) Grifols’ or Grifols, Inc.’s covenants to obtain the financing contemplated by the commitment letter (or alternative financing) or to obtain all the requisite approvals and clearances for the transactions contemplated by the merger agreement under all applicable antitrust laws; or | |
• | that causes or results in, or would cause or result in, a failure of Grifols or Grifols, Inc. to conduct the closing or consummate the transactions contemplated by the merger agreement by the outside date because of a failure to receive the proceeds from the financing contemplated by the commitment letter (or alternative financing) or otherwise due to a lack of funds, or a failure of either of the antitrust condition or the absence of restraint condition (as a result of the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws), |
• | if the merger agreement is terminated by either party, pursuant to the termination provisions, because the transaction has not been consummated on or before the outside date, and at the time of such termination (1) Talecris stockholder approval has been obtained, (2) no temporary restraining order, injunction or other judgment, order or decree of any court or agency of competent jurisdiction that prohibits the consummation of the transaction has been issued, and no law has been enacted, issued, enforced, entered or promulgated that prohibits or makes illegal the consummation of any of the transactions contemplated by the merger agreement (other than the enactment, issuance, enforcement or entry of a temporary restraining order, injunction or other judgment, order or decree under antitrust laws), (3) the condition concerning the truth and correctness of Talecris representations and warranties has been satisfied, (4) Talecris has complied in all material respect with all of its obligations under the merger agreement and (5) the failure of the closing to have occurred on or by the outside date was not due to Talecris’ invocation of failure of the Grifols representations and warranties condition; |
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• | if the merger agreement is terminated by either party, pursuant to the termination provisions, because a governmental entity of competent jurisdiction has issued an order or taken any other action permanently restraining, enjoining or otherwise prohibiting either merger, and such order or action has become final and nonappealable, and at the time of such termination (1) Grifols is not permitted to terminate the merger agreement due to Talecris’ breach or failure to perform any of its representations, warranties, covenants or agreements that would cause a failure of a closing condition and (2) there is no state of facts or circumstances that would reasonably be expected to cause the closing condition concerning Talecris stockholder adoption of the merger agreement and the absence of restraint condition not to be satisfied on or prior to the outside date (except for facts or circumstances resulting from the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws); or | |
• | if the merger agreement is terminated by Talecris under circumstances where Grifols has breached the merger agreement in a manner (x) that constitutes or results in, or would constitute or result in, a breach of (or that includes a breach that constitutes or results in, or would constitute or result in, a breach of) Grifols’ or Grifols, Inc.’s covenants to obtain the financing contemplated by the commitment letter (or alternative financing) or to obtain all the requisite approvals and clearances for the transactions contemplated by the merger agreement under all applicable antitrust laws or (y) that causes or results in, or would cause or result in, a failure of Grifols or Grifols, Inc. to conduct the closing or consummate the transactions contemplated by the merger agreement by the outside date because of a failure to receive the proceeds from the financing contemplated by the commitment letter (or alternative financing) or otherwise due to a lack of funds, or a failure of either of the antitrust condition or the absence of restraint condition (as a result of the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws) and such breach or failure to perform would result in a failure of any of additional closing conditions for Talecris’ benefit, and such breach or failure to perform is not cured or is not curable by the outside date, and at the time of such termination, (1) Grifols is not permitted to terminate the merger agreement due to Talecris’ breach of any of its representations, warranties, covenants or agreements and there is no state of facts or circumstances that would reasonably be expected to cause the closing condition concerning Talecris stockholder adoption of the merger agreement and the absence of restraint condition not to be satisfied on or prior to the outside date (except for facts or circumstances resulting from the enactment, issuance, promulgation, enforcement or entry of a temporary restraining order, preliminary or permanent injunction or other judgment, order or decree under or relating to antitrust laws). |
• | if the Grifols Board of Directors changes its recommendation that the Grifols shareholders approve the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders and the merger agreement is terminated by either Talecris or Grifols because the Grifols shareholder meeting concludes without the approval of the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders by the Grifols shareholders; or | |
• | if the merger agreement is terminated by Talecris because one or more of the Grifols shareholders who are parties to a Grifols voting agreement breaches the representations, warranties, covenants and agreements of its voting agreement with the result that Grifols is unable to comply in all material respects with its obligations to call the Grifols shareholders meeting and solicit the approval of the Grifols shareholders of the proposal to approve the matters relating to the Talecris-Grifols merger requiring the approval of the Grifols shareholders. |
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• | if the Talecris Board of Directors changes its recommendation that the Talecris stockholders adopt the merger agreement due to a superior proposal or an intervening event and the merger agreement is terminated by either Talecris or Grifols because the Talecris special meeting concludes without the adoption of the merger agreement by the Talecris stockholders; | |
• | if the merger agreement is terminated by Grifols because Talecris Holdings breaches the representations, warranties, covenants and agreements of the Talecris voting agreement with the result that Talecris is unable to comply in all material respects with its obligations to call the Talecris special meeting and solicit the Talecris stockholder adoption of the merger agreement; or | |
• | all of the following occur: |
• | a Talecris takeover proposal has been made to Talecris and such takeover proposal has not been publicly withdrawn at least ten business days prior to the date of the Talecris special meeting (or at least ten business days prior to the date of termination if the merger agreement is terminated (1) as a result of the failure of closing to have occurred on or by the outside date or (2) because Talecris Holdings breaches its representations, warranties, covenants and agreements, which breach would result in a failure of any of the additional closing conditions for Grifols’ benefit, and such breach is not cured or curable by the outside date); | |
• | thereafter the merger agreement is terminated because (1) the Talecris special meeting concludes without the adoption of the merger agreement by the Talecris stockholders, (2) the transaction has not been consummated on or before the outside date specified in the merger agreement or (3) Talecris breaches its representations, warranties or covenants, which breach would result in a failure of any of the additional closing conditions for Grifols’ benefit, and such breach is not cured or is not curable by the outside date; | |
• | within 12 months after any such termination referred to in the bullet above, Talecris enters into a definitive contract with respect to, or consummates the transactions contemplated by, any Talecris takeover proposal; | |
• | the transactions contemplated by such Talecris takeover proposal are consummated; and | |
• | in the case of termination as a result of the failure of the closing to have occurred on or by the outside date, the Talecris stockholders shall not have adopted the merger agreement. |
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• | their obligations to consummate the transaction and to conduct the closing upon the satisfaction of the mutual conditions and the satisfaction or waiver of additional closing conditions for Grifols’ benefit if the financing contemplated by the commitment letter or any alternative financing (including any bridge or interim financing that is part of such financing or such alternative financing) is available; | |
• | Grifols’ obligations to use its reasonable best efforts to enforce its rights under the commitment letter and to cause the lenders and the other persons providing the financing contemplated by the commitment letter (or alternative financing) to fund such financing (or alternative financing) required to consummate the Talecris-Grifols merger (including any related refinancings) on the closing date contemplated by the merger agreement, including by commencing a litigation proceeding against any breaching financial institution or institutions in which Grifols will use its reasonable best efforts to compel such breaching institution or institutions to provide its portion of such financing as required; | |
• | Grifols’ obligations to use reasonable best efforts to negotiate definitive agreements with respect to the commitment letter on the terms and conditions set forth in the commitment letter; and | |
• | Grifols’ obligations (1) to pay the $100 million termination fee if required by the merger agreement, (2) to pay the $375 millionbreak-up fee if required by the merger agreement, (3) in respect of the expenses pursuant to Talecris’ efforts to arrange the financing or Talecris’ actions with respect to its indebtedness and (4) to enforce and to prevent any breach by Grifols or Grifols, Inc. of their covenants under the merger agreement (however, Talecris is not entitled to an injunction to prevent Grifols or Grifols, Inc. from breaching their covenants to obtain the financing contemplated by the commitment letter (or alternative financing) or to obtain all the requisite approvals and clearances for the transactions contemplated by the merger agreement under all applicable antitrust laws; and, if the financing contemplated by the commitment letter or any alternative financing (including any bridge or interim financing that is part of such financing or such alternative financing), is not available on the date that would otherwise have been the closing date under the merger agreement, Talecris will not be entitled to an injunction or injunctions to prevent Grifols or Grifols, Inc. from failing to conduct the closing or cause the transaction to be consummated pursuant to the merger agreement). |
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Percentage of | ||||||||
Ordinary Shares as | ||||||||
Number of Ordinary | of June 6, | |||||||
Shareholder | Shares | 2010 | ||||||
Deria, S.A. | 18,706,988 | 8.78 | % | |||||
Scranton Enterprises, B.V. | 15,898,258 | 7.46 | % | |||||
Thorthol Holdings, B.V. | 15,042,766 | 7.06 | % | |||||
Rodellar Amsterdam Holding, B.V. | 12,801,837 | 6.01 | % | |||||
María Josefa Grifols Lucas | 2,986,092 | 1.40 | % | |||||
Manel Jose Canivell Grifols | 2,478,850 | 1.16 | % | |||||
Jordi Canivell Grifols | 2,478,845 | 1.16 | % | |||||
María Jose Canivell Grifols | 2,478,355 | 1.16 | % | |||||
Magdalena Canivell Grifols | 2,477,645 | 1.16 | % |
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• | offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to sell, granting any option, right or warrant for the sale of, lending or otherwise disposing of or transferring, directly or indirectly, any Grifols new ADSs, any Grifols non-voting shares or any securities convertible into or exercisable or exchangeable for equity securities of Grifols; or | |
• | entering into any swap or other arrangement that transfers to another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such Grifols new ADSs, such Grifols non-voting shares or other such equity securities of Grifols. |
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• | IVIGis the part of the plasma that contains antibodies. IVIG assists in the treatment of primary and secondary immunological deficiencies, idiopathic thrombocytopenic purpura (ITP), Guillain Barré syndrome, Kawasaki disease, Allogeneic bone marrow transplant, and Chronic Inflammatory Demyelinating Polyneuropathy (CIDP). In addition, physicians prescribe IVIG for a variety of diseases, including multiple sclerosis, skin disease and asthma, even though these uses are not described in the product’s labeling and differ from those tested in clinical studies and approved by the FDA or similar regulatory authorities in other countries. These unapproved, or “off-label,” uses are common across medical specialties, and physicians may believe such off-label uses constitute the preferred standard of care or treatment of last resort for many patients in varied circumstances. IVIG is also currently being investigated |
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for use in the treatment of Alzheimer’s disease and other neurological conditions. Industry participants believe that, because IVIG is a complex mixture of antibody molecules, it is unlikely that a recombinant (or synthetic) alternative will be developed within the foreseeable future. IVIG has global sales of $5.1 billion, which represents 43.4% of the total plasma derivatives sales. IVIG sales experienced significant growth in recent years driven by improving usages, physician awareness and a strong reimbursement environment, and it now represents the largest plasma-derived product by sales value. It is one of the key growth drivers of the industry largely due to the increasing number of medical conditions for which IVIG is used. |
• | Factor VIIIis a blood coagulation factor which ensures that blood coagulates correctly after hemorrhage. Persons born with Factor VIII deficit or who acquire this deficit over time through the formation of antibodies that inactivate it, require administration of Factor VIII in determined situations (before surgery or after injury or serious hemorrhage). Factor VIII is also often used for the treatment of hemophilia A, a disease that is suffered by one out of every 10,000 men (women are not susceptible to this disease). Factor VIII used in these cases is either extracted from human plasma or is genetically modified into a recombinant substitute from bovine, mouse or hamster cells. Recombinant products account for most sales in the Factor VIII market. In 2008, worldwide plasma-derived Factor VIII and von Willebrand Factor annual sales were approximately $1.8 billion, comprising 15.5% of total plasma derivatives sales. Plasma-derived Factor VIII and von Willebrand Factor had a compound annual growth rate of 8.7% over the past ten years. Growth in Factor VIII is being driven by increased patient identification and treatment in developing countries. The current per capita Factor VIII utilization is significantly higher in the United States and European Union (EU) than in developing countries. |
• | Albuminis the most commonly found protein in plasma and represents the biggest product by volume but has low unitary prices given its commoditized nature. One of albumin’s main functions is to carry and store a wide variety of small molecules such as bilirubin, cortisol, sex hormones, free fatty acids and some medicines. Albumin is used in the treatment of burns, severe hemorrhage, sepsis, haemodialysed patients with hypotension, nephritic syndrome and necrotizing pancreatitis, among others. Biotechnology companies also use high-purity albumin as a stabilizer for their products. Clinical trials are currently underway for new applications for this product, including, among others, for the treatment of stroke and liver cirrhosis. Albumin has global sales of $1.7 billion, comprising 14.4% of the total plasma derivatives industry. The demand for albumin has increased since 2000 and is projected to grow moderately over the next few years. |
Percentage of | ||||
Product | Global Sales | |||
IVIG | 43.4 | % | ||
Factor VIII(1) | 15.5 | % | ||
Albumin | 14.4 | % | ||
Factor IX | 2.7 | % | ||
Hyperimmunes | 7.6 | % | ||
Alpha 1 Proteinase Inhibitor (A1PI) | 3.6 | % | ||
Fibrin glue | 3.7 | % | ||
Antithrombin III | 2.9 | % | ||
Others | 6.2 | % |
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Percentage of | ||||
Region | Global Sales | |||
North America | 36.7 | % | ||
Europe | 36.2 | % | ||
Asia Pacific | 15.3 | % | ||
Latin America | 5.7 | % | ||
Middle East | 2.6 | % | ||
Others | 3.5 | % |
• | IVIG. According to the MRB, worldwide sales for IVIG have grown at a 12.5% compound annual rate between 1994 and 2008, although current growth is materially lower. This growth has been driven by increased evidence that IVIG is effective in treating a broader universe of ailments than previously considered and increased incidence of acquired autoimmune and other ailments due to an increase in life expectancy. |
• | Factor VIII. According to the MRB, the worldwide sales of plasma-derived Factor VIII, including von Willebrand factor sales,have grown at a 5.1% compound annual rate between 1994 and 2008, and Grifols and Talecris believe that demand growth will continue. The United States Factor VIII market is supplied primarily by recombinant products. Grifols and Talecris believe that continued plasma-derived Factor VIII growth worldwide will be driven by the following therapeutic indications: |
• | Treatment of von Willebrand disease. The treatment of von Willebrand disease requires a Factor VIII product containing von Willebrand factor. Von Willebrand factor is not present in recombinant and monoclonal Factor VIII products; and | |
• | Immune Tolerance Therapy (ITT). Plasma-derived ITT is used principally as a second attempt at treatment when an initial course of recombinant ITT has failed. The daily administration of a high dose of either recombinant or plasma-derived Factor VIII for six months to a year is an increasingly popular treatment to combat inhibitors, which are substances that restrict the activity of Factor VIII. Doses in the second attempt at ITT tend to be significantly higher than in the initial course of treatment. |
• | Albumin. According to MRB, the worldwide sales demand for albumin has grown at a 0.6% compound annual rate between 1994 and 2008. This slow growth is due to a perception that less expensive alternatives such as saline are as effective as albumin in the treatment of traumatic or hemorrhagic shock and severe burns. | |
• | Alpha 1 Proteinase Inhibitor (A1PI). A1PI is a fourth protein that is financially important to Talecris and is growing in sales. According to the MRB, the worldwide sales demand for Alpha-1 has grown at a 14.6% compound annual rate between 1994 and 2008. |
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• | “Group Purchasing Organizations,” which are referred to as GPOs, which are umbrella buying groups representing inpatient and outpatient hospitals and non-acute members who benefit through consolidated supply contracts. GPOs do not purchase products directly, rather, they select authorized distributors which purchase inventory and handle all product logistics for their members. | |
• | Wholesalers/Distributors either provide product directly to, or enter into distribution agreements with, hospitals, GPOs, and physician offices. The distributor is generally paid service fees for “encumbered” products on a GPO contract, or they purchase “unencumbered” products directly from manufacturers which are not part of a GPO contract. | |
• | Homecare and specialty pharmacy providers are a growing segment which provides patient treatment in the home, either through self-medication or with the assistance of a nurse. These providers either purchase products direct from manufacturers or through GPOs. | |
• | Manufacturer Direct programs distribute products directly to a physician’s office or a patient’s home. |
• | According to the MRB, it is estimated that 55% of the IVIG sold in the United States in 2009 was purchased by hospitals for both in-patient and out-patient use; physician offices represented about 15% of IVIG volume; and homecare companies including those with specialty pharmacies represented 20% of the IVIG volume. |
• | A1PI is generally distributed by homecare companies and specialty pharmacies and administered by a nurse at home or at a hospital infusion suite. | |
• | Albumin is generally used in surgical and trauma settings and is generally sold to hospital groups. | |
• | Clotting factors, such as Factor VIII, generally are self administered by patients and are mainly channeled from manufacturers to patients through home care companies and similar agencies. |
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• | immunohematology, which is the diagnosis of blood type and the screening of antibodies, accounting for 2.6%, or US$983 million, of the 2009 world market for in vitro diagnostic products according to the business information company Global Data; | |
• | immunology, which is the study of defense mechanisms against antigens, accounting for 38.6%, or US$14.658 billion, of the 2009 world market; and | |
• | hemostasis, which is the analysis of processes related to blood coagulation, accounting for 4.2%, or US$1.606 billion, of the 2009 world market. |
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• | completion of preclinical laboratory tests, animal studies and formulation studies under the FDA’s good laboratory practices regulations; | |
• | submission to the FDA of an Investigational New Drug Application (IND), for human clinical testing, which must become effective before human clinical trials may begin and which must include approval by an independent Institutional Review Board, which is referred to as an IRB, at each clinical site before the trials may be initiated; | |
• | performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices to establish the safety and efficacy of the product for each indication; | |
• | submission to the FDA of a BLA, which contains detailed information about the chemistry, manufacturing and controls for the product, reports of the outcomes and full data sets of the clinical trials and proposed labeling and packaging for the product; | |
• | satisfactory review of the contents of the BLA by the FDA, including the satisfactory resolution of any questions raised during the review; | |
• | satisfactory completion of an FDA Advisory Committee review, if applicable; | |
• | satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to ensure the product’s identity, strength, quality and purity; and | |
• | FDA approval of the BLA including agreement on post-marketing commitments, if applicable. |
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• | evaluate dosage tolerance and appropriate dosage; | |
• | identify possible adverse effects and safety risks; and | |
• | provide a preliminary evaluation of the efficacy of the drug for specific indications. |
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• | derived from biotechnology processes, such as genetic engineering; | |
• | advanced-therapy medicines, such as gene-therapy, somatic cell-therapy or tissue-engineered medicines; | |
• | intended for the treatment of HIV/Aids, cancer, diabetes, neurodegenerative disorders or autoimmune diseases and other immune dysfunctions; | |
• | officially designated “orphan medicines” (medicines used for rare diseases). |
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• | the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 persons in the European Union at the time of submission of the designation application (prevalence criterion), or; | |
• | the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening, seriously debilitating or serious and chronic condition and without incentives it is unlikely that the revenue after marketing of the medicinal product would cover the investment in its development, and; | |
• | either no satisfactory method of diagnosis, prevention or treatment of the condition concerned is authorized, or, if such method exists, the medicinal product will be of significant benefit to those affected by the condition. |
• | protocol assistance (scientific advice for orphan medicines during the product-development phase); | |
• | direct access to centralized marketing authorization and10-year marketing exclusivity; | |
• | financial incentives (fee reductions or exemptions); and | |
• | national incentives detailed in an inventory made available by the European Commission. |
• | full (100%) reduction for protocol assistance andfollow-up; | |
• | full (100%) reduction for pre-authorization inspections 50% reduction for new applications for marketing authorization to applicants other than small and medium-sized enterprises; |
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• | full (100%) reduction for new applications for marketing authorization only to small and medium-sized enterprises; and | |
• | full (100%) reduction for post authorization activities including annual fees only to small and medium sized enterprises in the first year after granting a marketing authorization. |
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• | Bioscience. The Bioscience division includes activities relating to plasma derivatives for therapeutic use, including the reception, analysis, quarantine, classification, fractionation and purification of plasma, and the sale and distribution of end products. The main types of plasma products manufactured by Grifols from plasma are Intravenous Immunoglobulin (IVIG), Factor VIII and Albumin. Grifols also manufactures A1 PI, Hyperimmune immunoglobulins, Antithrombin III, Factor IX and PTC. The Bioscience division, which accounts for a majority of Grifols sales, accounted for €380.1 million, or 77.9%, and €695.0 million, or 76.1%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. | |
• | Hospital. The Hospital division manufactures products that are intended primarily for hospitals, such as parenteral solutions and enteral and parenteral nutritional fluids, which are sold almost exclusively in Spain and Portugal, and which accounted for €45.1 million, or 9.2%, and €86.3 million, or 9.5%, of Grifols’ total |
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net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. Grifols believes it is the leading provider of intravenous therapy in Spain, with a 33% market share. |
• | Diagnostic. The Diagnostic division focuses its activities in the field of clinical diagnoses, developing instruments and reagents for in vitro analysis in three areas: immunohematology, hemostasis and immunology. The Diagnostic division’s main customers are blood donation centers, clinical analysis laboratories, and hospital immunohematology services. The division also manufactures and distributes blood collection bags and other disposables. The Diagnostic division accounted for €54.4 million, or 11.2%, and €103.1 million, or 11.3%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. | |
• | Raw Materials. The Raw Materials division includes the sale of intermediate pastes and plasma to third parties, which accounted for €1.8 million, or 0.4%, and €22.7 million, or 2.5%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. Sales of the Raw Materials division are used to optimize inventory levels with the aim of striking a better balance between plasma collections and fractionation needs. |
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• | Plasma collected through Grifols’ 80 plasma collection centers in the United States. | |
• | Plasma received by Grifols from Spanish hospitals through the Aprovechamiento Integral del Plasma Hospitalario (AIPH) program (Full Use of Hospital Plasma). |
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Product Description | Main Applications | |
Flebogamma IVIG. Human intravenous immunoglobulin, liquid, pasteurized and solvent detergent inactivation. Flebogamma DIF IVIG. Human intravenous immunoglobulin, liquid, pasteurized, solvent detergent inactivation and nanofiltration. Grifols’ IVIG product has a 5% and 10% concentration. | IVIG assists in the treatment of primary and secondary immunological deficiencies, the treatment of immune-mediated idiopathic thrombocytopenic purpura (ITP), Guillain Barré syndrome, Kawasaki disease, allogeneic bone marrow transplants, CPI, and on an off-label application basis, multiple sclerosis, skin disease and asthma. IVIG is also currently being investigated for use in the treatment of Alzheimer’s disease and other neurological conditions. | |
Fanhdi Factor VIII and Alphanate Factor VIII. High purity anti-hemophilic Factor VIII containing von Willebrand factor. | Prevention and control of bleeding in Factor VIII deficiency (hemophilia A), and indication in the United States for von Willebrand congenital hemorrhagic disease. | |
Grifols Albumin. Pasteurized sterile aqueous solutions containing 25%, 20% or 5% human serum albumin. This albumin has a low aluminum content, a requirement in Europe but not in the United States, that makes it particularly attractive for biotechnology companies. Grifols also offersAlbutein Albumin,a product containing 25%, 20% or 5% human serum that Grifols obtained from Alpha. | Used to re-establish and maintain circulation volume in the treatment of traumatic or hemorrhagic shock and severe burns. Also used for liver disease and increasingly by biotechnology companies as a stabilizer. |
Six Months | ||||||||||||||||
Ended | Years Ended December 31, | |||||||||||||||
June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||
(000) Euro | ||||||||||||||||
IVIG | 164,720 | 302,859 | 287,178 | 210,086 | ||||||||||||
Factor VIII | 74,617 | 143,533 | 119,772 | 110,633 | ||||||||||||
Albumin | 88,313 | 143,203 | 120,942 | 105,200 | ||||||||||||
Antithrombin III | 3,686 | 8,705 | 9,501 | 11,128 | ||||||||||||
IMIG | 10,286 | 20,245 | 17,895 | 13,760 | ||||||||||||
Factor IX/PTC | 14,694 | 29,266 | 27,666 | 26,968 | ||||||||||||
Alpha-1 antitrypsin | 2,887 | 4,923 | 4,273 | 2,776 | ||||||||||||
IVIG Anti-HB | 1,808 | 1,160 | 0 | 0 | ||||||||||||
Other(1) | 19,070 | 41,075 | 30,691 | 27,049 | ||||||||||||
Total | 380,081 | 694,969 | 617,918 | 507,600 | ||||||||||||
(1) | Relates mainly to fractionation services and discounts. |
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• | Flebogamma IVIG. Grifols has 44 licenses for marketing and sale of this product: 14 in the European Union, 2 in the United States, 15 in Latin America, 6 in Asia and 7 in the rest of the world; | |
• | Fanhdi/Alphanate Factor VIII. Grifols has 52 licenses for the marketing and sale of one or both of these Factor VIII products: 16 in the European Union, 15 in Latin America, one in the United States, 13 in Asia and 7 in the rest of the world; and | |
• | Albumin Grifols/Albutein Albumin. Grifols has 125 licenses for the marketing and sale of one or both of these albumin products in its various concentrations: 27 in the European Union, 8 in the United States and Canada, 26 in Latin America, 49 in Asia and 15 in the rest of the world. |
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Product Description | Main Applications | |
Intravenous therapy: | ||
Intravenous fluid and electrolyte solutions. Main product groups include hypotonic solutions, isotonic solutions, hypertonic solutions and plasma volume expander solutions. | Fluid and electrolyte replacement and conduit for the administration of medicines. | |
Intravenous washing solutions. Washing solutions in specially-designed containers. | Cleaning of injury and operation areas and urological irrigation with the ability to use two different liquid filters. | |
Intravenous mixtures. Ready-to-use intravenous mixtures for various purposes. Grifols complements this product by offering Grifill, a system for the preparation of intravenous mixtures at in-hospital pharmacies using the principle of sterile filtration. Grifols obtained a product license for Grifill in December 2003 from the FDA, which allows Grifols to market and sell this product in the United States. | Increases safety and efficiency by rendering unnecessary the mixing of solutions at in-hospital pharmacies. | |
Nutrition: | ||
Soyacal fat emulsion. Fat emulsion at 10% and 20%, administered intravenously. | The fat emulsion is the main energy source for the patient in parenteral nutrition, providing calories and acid fats. | |
Glucose solution. High glucose concentrate (5%, 15%, 30% and 50%). | Offers carbohydrate support for a patient’s diet. | |
Dietgrif enteral liquid diets. Oral diets with all the requirements for balanced nutrition. Different diets include standard, standard fiber, polypeptidic, hyperproteic and energetic. | For patients who are unable to eat enough to maintain a nutritious diet, administered through feeding tubes as well as orally. | |
Amino acid solutions. Solutions at 8% and 10% and hyper-nitrogenated amino acid solutions. | Offers amino acid support for a patient’s diet. |
Six Months | ||||||||||||||||
Ended | Years Ended December 31, | |||||||||||||||
June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||
(000) Euro | ||||||||||||||||
Intravenous therapy | 20,327 | 39,882 | 39,399 | 35,874 | ||||||||||||
Medical devices | 9,681 | 17,306 | 16,021 | 14,107 | ||||||||||||
Hospital logistics | 10,880 | 20,376 | 19,008 | 16,947 | ||||||||||||
Nutrition | 4,181 | 8,172 | 7,508 | 6,909 | ||||||||||||
Other(1) | 77 | 592 | 630 | 846 | ||||||||||||
Total | 45,146 | 86,328 | 82,566 | 74,683 | ||||||||||||
(1) | Relates mainly to soaps and gels. |
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Product Description | Main Applications | |
Immunohematology: | ||
Wadiana/Erytra analyzers. Automated immunohematology analyzers which use gel technology. | Used to perform routine pre-transfusion testing and immunohematology tests in general. | |
Immunology: | ||
Triturus analyzers. Fully automated analyzer with open system for any ELISA test offering multi-test/multi-batch capability. | Allows hospitals to automate the enzyme immunoassays in microtiter plate format procedure. | |
Reagents, instrumentation and software. Instruments, reagents and software for coagulation testing. | Used to establish the coagulation status of patients and to handle the corresponding results. | |
Hemostasis: | ||
Q-Coagulometer analyzers. Fully automated hemostasis analyzer which uses reagents to measure coagulation levels. | Used to diagnose and measure coagulation status of patients with coagulation-related and hemorrhagic disorders. | |
Blood bags: | ||
Leucored and Standard Blood bags. Blood bags configured according to all blood bank separation protocols. Leucored blood bags incorporate an in-line filtration system. | Used for collection and transfusion of blood. |
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Six Months | ||||||||||||||||
Ended | Years Ended December 31, | |||||||||||||||
June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||
(000) Euro | ||||||||||||||||
Immunohematology | 25,331 | 49,951 | 39,549 | 33,751 | ||||||||||||
Blood bank | 10,209 | 17,311 | 15,514 | 19,404 | ||||||||||||
Immunology | 9,197 | 17,737 | 17,460 | 17,345 | ||||||||||||
Hemostasis | 5,269 | 8,222 | 6,496 | 5,472 | ||||||||||||
PIBC | 3,708 | 7,756 | 4,814 | 2,077 | ||||||||||||
Other | 699 | 2,114 | 1,872 | 1,660 | ||||||||||||
Total | 54,413 | 103,091 | 85,705 | 79,709 | ||||||||||||
Six Months | ||||||||||||||||
Ended | Years Ended December 31, | |||||||||||||||
June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||
(000) Euro | ||||||||||||||||
European Union | 223,019 | 424,591 | 404,099 | 376,905 | ||||||||||||
United States | 157,948 | 296,659 | 290,666 | 235,929 | ||||||||||||
Rest of the World | 106,842 | 191,936 | 119,546 | 90,457 |
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• | Developing new products. Grifols obtains, purifies and inactivates proteins whose therapeutic purpose is known, such as fibrin sealant. Grifols is currently carrying out clinical trials for this protein in vascular, organ and soft-tissue surgery and estimates launch of this product in 2014. Among the additional products under development, the most relevant are: a topical Thrombin for use in surgery; Prothrombin Complex with potential indications on reversal of warfarin overdose in anticoagulated patients or treatment of Factor VIII inhibitors in Haemophilia A; Intravenous fibrinogen, with indication in congenital deficiency and, potentially, in massive bleedings; and a human derived Supplement for cell culture for use in research and, potentially, for cGMP applications related to, for example: biotechnology (recombinant protein production), stem cell based regenerative medicine or gene therapy; | |
• | Researching new applications for existing products. Grifols has been conducting clinical trials for the use of Fanhdi and Alphanate, anti-hemophilic products that consist of the Factor VIII protein and use the von Willebrand coagulation factor, on patients who have a von Willebrand factor deficiency. Grifols has launched this product in Italy and in the United States and expects to expand the license to other countries. Grifols has undertaken several studies to explore alternative uses for albumin. A research line focusing on the systematic practice of therapeutic plasmapheresis with Albumin in the treatment of Alzheimer’s disease began in 2005 with the participation of the ACE Foundation and hospitals in Vall d’Hebron in Barcelona, Gregorio Marañón in Madrid, Howard University in Washington, D.C., and the Mid Atlantic Geriatric Association in New Jersey. The positive interim results obtained from the first studies were published in 2009 and lead to the design of a further medical study combining plasmapheresis and intravenous immunoglobulins that will begin in 2011. In addition to the Alzheimer’s research, Grifols signed a collaboration agreement with the Fundacio Clinic per a la Recerca Biomedica to finance two lines of albumin research. The first is an ongoing multicenter trial that uses albumin on patients with liver cirrhosis and ascitis to prevent the complications inherent to this illness. The second trial entails plasma replacements in patients withacute-on-chronic liver failure and it is expected that the first patient will be included during 2010. Grifols is also conducting a pilot randomized clinical trial with Anbinex (antithrombin) in cardiac surgery with cardiopulmonary bypass; |
• | Improving Grifols’ manufacturing processes to improve yields, safety and efficiency. Among the projects related to improve yields, safety and efficiency, Grifols is developing a nanofiltered Factor VIII/VWF concentrate which will increase the already excellent safety margin of Grifols’ current products while simplifying process steps which will improve efficiency without significantly impacting yields. Research is being done also in liquid formulations for Alpha-1 Antitrypsin which would represent an advantage for the user and reduce production costs associated with freeze-drying the product. Alternative packaging materials are being developed for albumin and IVIG, which would represent an advantage to the user because of ease of use. Another project is the development of a nanofiltered albumin preparation that would improve the already well established safety profile of albumin and might be of interest for some, like vaccine manufacturers. |
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• | Grifols continues to develop technology associated with the classification of blood types through the use of gel technology; | |
• | In this respect, and since diluted red cells are an important reagent in the screening process of antibodies and antibody identification, a research project is ongoing in order to be able to work with frozen blood bags so as to improve the availability and quality of the reagent red cells manufactured. It is estimated the project will be completed by the end of 2010; |
• | Also a new stand alone digital reader will be launched during the last quarter of 2010 in order to automate the reading and interpretation process of the gel cards manufactured and sold by Grifols; |
• | Regarding the recently launched Erytra analyzer, a new software version is targeted for January 2011; |
• | Development work has also continued in 2009 on a new auto analyzer to perform ELISA techniques in microplates. This analyzer is set to replace the current Triturus, of which over one thousand units have been sold and placed worldwide; |
• | It is in the course of development of a new Hemostasis Analyzer, complementary to the Q-Coagulometer, that will cover the range of medium to large laboratories. It will give about three times higher capacity and output than the Q-Coagulometer; | |
• | Development of a newly formulated thromboplastin reagent close to completion. Also a new liquid Thrombin reagent of human origin is in the final stage of development. Also a new activated cephaline reagent based on synthetic phospholipids is under development; and | |
• | An instrument called Stat is being developed by the new Swiss company, acquired in 2009, which will be able to read the results shown by the multicards (rapid blood typing test). |
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• | Process for the production of virus-inactivated human Gammaglobulin G. Grifols has patents for this process in Argentina, Austria, Belgium, Chile, Czech Republic, Finland, France, Germany, Greece, Hong Kong, Hungary, Ireland, Italy, Japan, Mexico, Netherlands, Portugal, Slovakia, Spain, Sweden, Switzerland/Liechtenstein, Turkey, United Kingdom, Uruguay and the United States which are either pending registration or are set to expire between 2022 and 2024; | |
• | Use of Therapeutic Human Albumin for the preparation of a drug for the treatment of patients suffering from cognitive disorders. Grifols has pending registrations for patents for this process in Argentina, Australia, Brazil, Canada, Chile, China, European Union, Hong Kong, Japan, Mexico, New Zealand, Russia, Spain, Uruguay and the United States; and |
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• | Process for removing viruses in fibrinogen solutions. Grifols has patents for this process in Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Czech Republic, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Mexico, Netherlands, New Zealand, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland/Liechtenstein, Turkey, United Kingdom and the United States which are either pending registration or are set to expire in 2024. |
• | Process for the sterile filling of flexible material bags (Grifill). Grifols has patents for this apparatus in Argentina, Austria, Belgium, Chile, Denmark, France, Germany, Italy, Japan, Mexico, Netherlands, Portugal, Spain, Sweden, Switzerland/Liechtenstein, United Kingdom and the United States which are set to expire between 2011 and 2022; | |
• | Bags with filtration system (Gribag). Grifols has patents for this vessel in Argentina, France, Germany, Italy, Japan, Portugal, Spain, Switzerland/Liechtenstein and the United Kingdom which are set to expire between 2011 and 2014; | |
• | Instrument for the precise low rate administration of parenteral solutions without the need for mechanical equipment (Griflow). Grifols has patents for this process in Argentina, Austria, Belgium, Brazil, France, Germany, Italy, Japan, Mexico, Portugal, Spain, Switzerland/Liechtenstein, United Kingdom and the United States which are set to expire between 2011 and 2014; | |
• | Wadiana machine for clinical analysis. Grifols has patents for this apparatus in Argentina, Austria, Belgium, Brazil, Chile, France, Germany, Italy, Japan, Mexico, Netherlands, Portugal, Slovakia, Spain, Switzerland/Liechtenstein, United Kingdom and the United States which are set to expire between 2018 and 2023; | |
• | Triturus machine for automated laboratory tests. Grifols has patents for this apparatus in Argentina, France, Germany, Italy, Japan, Mexico, Spain, United Kingdom and the United States which are set to expire in 2018; and | |
• | Centrifuge machine for clinical analysis, which Grifols has a patent for in Spain and which is set to expire in 2018. |
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2009 Actual | Current Installed | |||||||||||
Complex | Location and Size | Products(1) | Production(2) | Annual Capacity(2) | ||||||||
Industrial Complex One Parets | Barcelona, Spain 58,285 square meters of which Grifols owns 45,647 square meters | Fanhdi Factor VIII Albumin Grifols Anbin Antithrombin III Flebogamma IVIG Intramuscular Gammaglobulins Trypsone Alfa-1 Antitrypsin Novix Factor IX | 1,750 liters 1,850 liters 150 liters 3,000 liters 75 liters 190 liters 35 liters | 2,200 liters 2,800 liters 400 liters 3,900 liters 600 liters 450 liters 60 liters | ||||||||
Industrial Complex Two Parets | Barcelona, Spain 35,525 square meters of which Grifols owns 19,853 square meters | Parenteral Solutions Gel Cards | 25 million rigid bottles 10.5 million units | 45 million rigid bottles 14 million units | ||||||||
Industrial Complex Three Parets | Barcelona, Spain 40,113 square meters which Grifols rents | Plasma Storage | 0.5 million liters | 0.8 million liters | ||||||||
Industrial Complex USA | Los Angeles, California 93,078 square meters of which Grifols owns 93,078 square meters | Albutein Albumin Alphanate Factor VIII Alphanine IX Profilnine | 1,250 liters 1,125 liters 220 liters 55 liters | 2,100 liters 2,150 liters 500 liters 100 liters | ||||||||
City of Industry USA | Temple, California 5,000 square meters which Grifols rents | Plasma Storage | 0.4 million liters | 1.2 million liters | ||||||||
Industrial Complex One Murcia | Murcia, Spain 10,285 square meters which Grifols rents | Blood Bags | 7 million equivalent units | 8 million equivalent units | ||||||||
Industrial Complex Two Murcia | Murcia, Spain 26,873 square meters which Grifols owns | Parenteral and Intravenous Solutions | 21 million flexible containers | 27 million flexible containers | ||||||||
Industrial Complex Switzerland | Fribourg, Switzerland 12,000 square meters which Grifols rents | Multicards | 0.2 million units | 0.6 million units | ||||||||
Industrial Complex Australia | Melbourne, Australia 3,838 square meters which Grifols owns | Gel Cards | 0.5 million units | 4.0 million units | ||||||||
(1) | For diagnostic products, other than blood bags, there is not a meaningful installed capacity measurement as each unit is built and assembled individually. | |
(2) | In thousands of liters, except as indicated. |
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Number of | Marketing | R&D and | Senior | |||||||||||||||||||||
Location | Employees | and Sales | Production | Technical | Administrative | Management | ||||||||||||||||||
Spain | 2,381 | 336 | 1,498 | 222 | 283 | 42 | ||||||||||||||||||
Rest of European Union | 185 | 123 | 19 | 12 | 20 | 11 | ||||||||||||||||||
Total European Union | 2,566 | 459 | 1,517 | 234 | 303 | 53 | ||||||||||||||||||
United States | 3,141 | 75 | 2,869 | 22 | 140 | 35 | ||||||||||||||||||
Rest of the World | 152 | 83 | 17 | 14 | 27 | 11 | ||||||||||||||||||
Total | 5,859 | 617 | 4,403 | 270 | 470 | 99 |
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• | Bioscience. The Bioscience division includes activities relating to plasma derivatives for therapeutic use, including the reception, analysis, quarantine, classification, fractionation and purification of plasma, and the sale and distribution of end products. The main types of plasma products manufactured by Grifols from plasma are Intravenous Immunoglobulin (IVIG), Factor VIII and Albumin. Grifols also manufactures A1 PI, Hyperimmune immunoglobulins, Antithrombin III, Factor IX and PTC. The Bioscience division, which accounts for a majority of Grifols’ sales, accounted for €380.1 million, or 77.9%, and €695.0 million, or 76.1%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. | |
• | Hospital. The Hospital division manufactures products that are intended primarily for hospitals, such as parenteral solutions and enteral and parenteral nutritional fluids, which are sold almost exclusively in Spain and Portugal, and which accounted for €45.1 million, or 9.2%, and €86.3 million, or 9.5%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. Grifols believes that it is the leading provider of intravenous therapy in Spain, with a 33% market share. | |
• | Diagnostic. The Diagnostic division focuses its activities in the field of clinical diagnoses, developing instruments and reagents for in vitro analysis in three areas: immunohematology, hemostasis and immunology. The Diagnostic division’s main customers are blood donation centers, clinical analysis laboratories, and hospital immunohematology services. The division also manufactures and distributes blood collection bags and other disposables. The Diagnostic division accounted for €54.4 million, or 11.2%, and €103.1 million, or 11.3%, of Grifols’ total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. | |
• | Raw Materials. The Raw Materials division, which includes the sale of intermediate pastes and plasma to third parties as well as revenues from services, and which accounted for €1.8 million, or 0.4%, and €22.7 million, or 2.5%, of Grifols total net sales for the six months ended June 30, 2010 and the year ended December 31, 2009, respectively. |
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Depreciation | ||||||||
Method | Rates | |||||||
Buildings | Straight line | 1%-3% | ||||||
Plant and machinery | Straight line | 8%-10% | ||||||
Other installations, equipment and furniture | Straight line | 10%-30% | ||||||
Other property, plant and equipment | Straight line | 16%-25% |
Amortization | Estimated Years of | |||||
Method | Useful Life | |||||
Development expenses | Straight line | 3 - 5 | ||||
Concessions, patents, licenses, trademarks and similar | Straight line | 5 - 15 | ||||
Software | Straight line | 3 - 6 |
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• | Grifols has technical studies justifying the feasibility of the production process. | |
• | Grifols has undertaken a commitment to complete production of the asset whereby it is in condition for sale or internal use. | |
• | The asset will generate sufficient future economic benefits. | |
• | Grifols has sufficient financial and technical resources to complete development of the asset and has developed budget and cost accounting control systems which allow budgeted costs, introduced changes and costs actually assigned to different projects to be monitored. |
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Thousands of Euros | ||||||||||||||||
Balances at | Balances at | |||||||||||||||
January 1, | Business | Translation | December 31, | |||||||||||||
2009 | combinations | Differences | 2009 | |||||||||||||
Net value | ||||||||||||||||
Grifols UK, Ltd. | 7,213 | — | 523 | 7,736 | ||||||||||||
Grifols Italia, S.p.A. | 6,118 | — | — | 6,118 | ||||||||||||
Biomat USA, Inc. | 93,018 | 225 | (3,154 | ) | 90,089 | |||||||||||
Plasmacare, Inc. | 36,929 | — | (1,253 | ) | 35,676 | |||||||||||
Plasma Collection Centers, Inc. | 15,289 | — | (519 | ) | 14,770 | |||||||||||
Woolloomooloo Holdings Pty Ltd. | — | 16,190 | 3,421 | 19,611 | ||||||||||||
158,567 | 16,415 | (982 | ) | 174,000 | ||||||||||||
CGUs | ||||||||
Bioscience | Diagnostic | |||||||
Growth rate used to extrapolate projections | 3 | % | 2 | % | ||||
Discount rate after tax | 8 | % | 8.7 | % |
CGUs | ||||||||
Bioscience | Diagnostic | |||||||
Growth rate used to extrapolate projections | 1 | % | 1 | % | ||||
Discount rate after tax | 10 | % | 10 | % |
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• | Raw materials and other supplies: replacement cost. Nevertheless, raw materials are not written down below cost if the finished goods into which they will be incorporated are expected to be sold at or above cost of production. |
• | Goods for resale and finished goods: estimated selling price, less costs to sell. | |
• | Work in progress: the estimated selling price of related finished goods, less the estimated costs of completion and the estimated costs necessary to make the sale. |
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Six Months | Six Months | |||||||||||
Ended | Ended | |||||||||||
June 30, 2010 | June 30, 2009 | % var | ||||||||||
(000) Euro | ||||||||||||
IVIG | 164,720 | 149,535 | 10.2 | |||||||||
Factor VIII | 74,617 | 71,550 | 4.3 | |||||||||
Albumin | 88,313 | 75,480 | 17.0 | |||||||||
Antithrombin III | 3,686 | 5,093 | (27.6 | ) | ||||||||
IMIG | 10,286 | 10,089 | 2.0 | |||||||||
Factor IX/PTC | 14,694 | 14,542 | 1.0 | |||||||||
Alpha-1 antitripsin | 2,887 | 2,899 | (0.4 | ) | ||||||||
IVIG Anti-HB | 1,808 | 0 | — | |||||||||
Other(1) | 19,070 | 21,768 | (12.4 | ) | ||||||||
Total | 380,081 | 350,956 | 8.3 | |||||||||
(1) | Relates mainly to fractionation services and discounts. |
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Six Months | Six Months | |||||||||||
Ended | Ended | |||||||||||
June 30, 2010 | June 30, 2009 | % var | ||||||||||
(000) Euro | ||||||||||||
Intravenous Therapy | 20,327 | 20,385 | (0.3 | ) | ||||||||
Medical Devices | 9,681 | 9,008 | 7.5 | |||||||||
Hospital Logistics | 10,880 | 11,544 | (5.8 | ) | ||||||||
Nutrition | 4,181 | 3,911 | 6.9 | |||||||||
Other(1) | 77 | 209 | (63.2 | ) | ||||||||
Total | 45,146 | 45,057 | 0.2 | |||||||||
(1) | Relates mainly to soaps and gels. |
Six Months | Six Months | |||||||||||
Ended | Ended | |||||||||||
June 30, 2010 | June 30, 2009 | % var | ||||||||||
(000) Euro | ||||||||||||
Inmunohematology | 25,331 | 24,593 | 3.0 | |||||||||
Blood bank | 10,209 | 8,368 | 22.0 | |||||||||
Immunology | 9,197 | 9,126 | 0.8 | |||||||||
Haemostasis | 5,269 | 3,939 | 33.8 | |||||||||
PIBC | 3,708 | 3,725 | (0.5 | ) | ||||||||
Other(1) | 699 | 1,077 | (35.1 | ) | ||||||||
Total | 54,413 | 50,828 | 7.1 | |||||||||
(1) | Includes reagents and other products manufactured by third parties and discounts. |
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2009 | 2008 | % var | ||||||||||
(000) Euro | ||||||||||||
IVIG | 302,859 | 287,178 | 5.5 | |||||||||
Factor VIII | 143,533 | 119,772 | 19.8 | |||||||||
Albumin | 143,203 | 120,942 | 18.4 | |||||||||
Antithrombin III | 8,705 | 9,501 | (8.4 | ) | ||||||||
IMIG | 20,245 | 17,895 | 13.1 | |||||||||
Factor IX/PTC | 29,266 | 27,666 | 5.8 | |||||||||
Alpha-1 antitrypsin | 4,923 | 4,273 | 15.2 | |||||||||
IVIG Anti-HB | 1,160 | 0 | — | |||||||||
Other(1) | 41,075 | 30,691 | 33.8 | |||||||||
Total Sales | 694,969 | 617,918 | 12.5 | |||||||||
(1) | Relates mainly to fractionation services and discounts. |
2009 | 2008 | % var | ||||||||||
(000) Euro | ||||||||||||
Intravenous therapy | 39,882 | 39,399 | 1.2 | |||||||||
Medical devices | 17,306 | 16,021 | 8.0 | |||||||||
Hospital logistics | 20,376 | 19,008 | 7.2 | |||||||||
Nutrition | 8,172 | 7,508 | 8.8 | |||||||||
Other(1) | 592 | 630 | (6.0 | ) | ||||||||
Total Sales | 86,328 | 82,566 | 4.6 | |||||||||
(1) | Relates mainly to soaps and gels. |
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2009 | 2008 | % var | ||||||||||
(000) Euro | ||||||||||||
Immunohematology | 49,951 | 39,549 | 26.3 | |||||||||
Blood bank | 17,311 | 15,514 | 11.6 | |||||||||
Immunology | 17,737 | 17,460 | 1.6 | |||||||||
Hemostasis | 8,222 | 6,496 | 26.6 | |||||||||
PIBC | 7,756 | 4,814 | 61.1 | |||||||||
Other(1) | 2,114 | 1,872 | 12.9 | |||||||||
Total Sales | 103,091 | 85,705 | 20.3 | |||||||||
(1) | Includes reagents and other products manufactured by third parties and discounts. |
• | the March 2009 acquisition of a majority voting interest in Woolloomooloo Holdings Pty Ltd., an Australian-Swiss company that is a distributor of diagnostic products in Australia and Switzerland, whose revenues amounted to a total of €11.2 million. Excluding this acquisition, sales growth in the Diagnostic division was 7.3%; | |
• | a 1.9% decrease in immunohematology (excluding the above mentioned sales from the Australian-Swiss company of €11.2 million), mainly due to a €5.1 million planned sales reduction in OEM instruments sales. Excluding the OEM sales, the growth is 16.3%, from €26.8 million in 2008 to €31.1 million in 2009 which is mainly due to gel cards sales growth; | |
• | a €2.9 million increase in PIBC (pathogen inactivation of blood components), from €4.8 million to €7.8 million, mainly due to the incorporation of a new product line for distribution by Cerus Corporation beginning in the fourth quarter 2008; and | |
• | a €1.8 million increase in blood bank, from €15.5 million to €17.3 million and a €1.7 million increases in hemostasis sales for €6.5 million to €8.2 million, including the launch of the Q-Coagulometer, an instrument developed in-house. |
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2008 | 2007 | % var | ||||||||||
(000) Euro | ||||||||||||
IVIG | 287,178 | 210,086 | 36.7 | |||||||||
Factor VIII | 119,772 | 110,633 | 8.3 | |||||||||
Albumin | 120,942 | 105,200 | 15.0 | |||||||||
Antithrombin III | 9,501 | 11,128 | (14.6 | ) | ||||||||
IMIG | 17,895 | 13,760 | 30.1 | |||||||||
Factor IX/PTC | 27,666 | 26,968 | 2.6 | |||||||||
Alpha-1 antitrypsin | 4,273 | 2,776 | 53.9 | |||||||||
IVIG Anti-HB | 0 | 0 | — | |||||||||
Other(1) | 30,691 | 27,049 | 13.5 | |||||||||
Total Sales | 617,918 | 507,600 | 21.7 | |||||||||
(1) | Relates mainly to fractionation services and discounts. |
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2008 | 2007 | % var | ||||||||||
(000) Euro | ||||||||||||
Intravenous therapy | 39,399 | 35,874 | 9.8 | |||||||||
Medical devices | 16,021 | 14,107 | 13.6 | |||||||||
Hospital logistics | 19,008 | 16,947 | 12.2 | |||||||||
Nutrition | 7,508 | 6,909 | 8.7 | |||||||||
Other(1) | 630 | 846 | (25.5 | ) | ||||||||
Total Sales | 82,566 | 74,683 | 10.6 | |||||||||
(1) | Relates mainly to soaps and gels. |
2008 | 2007 | % var | ||||||||||
(000) Euro | ||||||||||||
Immunohematology | 39,549 | 33,751 | 17.2 | |||||||||
Blood bag | 15,514 | 19,404 | (20.0 | ) | ||||||||
Immunology | 17,460 | 17,345 | 0.7 | |||||||||
Hemostasis | 6,496 | 5,472 | 18.7 | |||||||||
PIBC | 4,814 | 2,077 | 131.8 | |||||||||
Other(1) | 1,872 | 1,660 | 12.8 | |||||||||
Total sales | 85,705 | 79,709 | 7.5 | |||||||||
(1) | Includes mainly reagents and other products manufactured by third parties and discounts. |
• | a €5.8 million increase in immunohematology net sales, due to an increase in sales in all product lines, and specifically, an increase in the sale of the Wadiana instrument of €1.7 million, from 62 units sold for |
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€1.6 million in 2007 to 110 units sold in 2008 for €3.3 million, and an increase in the sale of gel cards (reagents for Wadiana) of €1.7 million, from €10.8 million in 2007 to €12.5 million in 2008. |
• | a €2.7 million increase in the pathogen inactivation of blood components, mainly due to a market penetration of this new product. | |
• | a €1.0 million increase in hemostasis net sales, primarily due to an increase in the volume of sales of reagents. |
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H1 10 - | 2009 - | 2008 - | ||||||||||||||||||||||||||||||||||||||||||||||||||
H1 2010 | H1 2009 | 2009 | 2008 | 2007 | H1 09 | 2008 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||
(000)Euro | ||||||||||||||||||||||||||||||||||||||||||||||||||||
% | % | % | % | % | % | % | % | |||||||||||||||||||||||||||||||||||||||||||||
of Sales | of Sales | of Sales | of Sales | of Sales | Increase | Increase | Increase | |||||||||||||||||||||||||||||||||||||||||||||
Bioscience Division | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | 380,081 | 350,957 | 694,969 | 617,918 | 507,600 | 8.3 | % | 12.5 | % | 21.7 | % | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | (185,926 | ) | 48.9 | % | (162,941 | ) | 46.4 | % | (333,106 | ) | (47.9 | )% | (295,188 | ) | (47.8 | )% | (262,358 | ) | (51.7 | )% | 14.1 | % | 12.8 | % | 12.5 | % | ||||||||||||||||||||||||||
Gross profit | 194,155 | 51.1 | % | 188,016 | 53.6 | % | 361,863 | 52.1 | % | 322,730 | 52.2 | % | 245,242 | 48.3 | % | 3.3 | % | 12.1 | % | 31.6 | % | |||||||||||||||||||||||||||||||
Hospital Division | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | 45,146 | 45,057 | 86,328 | 82,566 | 74,683 | 0.2 | % | 4.6 | % | 10.6 | % | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | (28,922 | ) | 64.1 | % | (29,174 | ) | 64.7 | % | (56,223 | ) | (65.1 | )% | (53,721 | ) | (65.1 | )% | (49,817 | ) | (66.7 | )% | (0.9 | )% | 4.7 | % | 7.8 | % | ||||||||||||||||||||||||||
Gross profit | 16,224 | 35.9 | % | 15,883 | 35.3 | % | 30,105 | 34.9 | % | 28,845 | 34.9 | % | 24,866 | 33.3 | % | 2.1 | % | 4.4 | % | 16.0 | % | |||||||||||||||||||||||||||||||
Diagnostic Division | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | 54,413 | 50,828 | 103,091 | 85,705 | 79,709 | 7.1 | % | 20.3 | % | 7.5 | % | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | (31,403 | ) | 57.7 | % | (30,023 | ) | 59.1 | % | (59,265 | ) | (57.5 | )% | (50,771 | ) | (59.2 | )% | (46,789 | ) | (58.7 | )% | 4.6 | % | 16.7 | % | 8.5 | % | ||||||||||||||||||||||||||
Gross profit | 23,010 | 42.3 | % | 20,805 | 40.9 | % | 43,826 | 42.5 | % | 34,934 | 40.8 | % | 32,920 | 41.3 | % | 10.6 | % | 25.5 | % | 6.1 | % | |||||||||||||||||||||||||||||||
Raw Materials Division | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales | 1,835 | 20,863 | 22,665 | 22,794 | 36,151 | (91.2 | )% | (0.6 | )% | (36.9 | )% | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | (847 | ) | 46.2 | % | (17,741 | ) | 85.0 | % | (18,794 | ) | (82.9 | )% | (15,335 | ) | (67.3 | )% | (28,228 | ) | (78.1 | )% | (95.2 | )% | 22.6 | % | (45.7 | )% | ||||||||||||||||||||||||||
Gross profit | 988 | 53.8 | % | 3,122 | 15.0 | % | 3,871 | 17.1 | % | 7,459 | 32.7 | % | 7,923 | 21.9 | % | (68.4 | )% | (48.1 | )% | (5.9 | )% | |||||||||||||||||||||||||||||||
Other(1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenue | 6,334 | 2,826 | 6,133 | 5,328 | 5,148 | 124.1 | % | 15.1 | % | 3.5 | % | |||||||||||||||||||||||||||||||||||||||||
Costs | (2,549 | ) | 40.2 | % | (554 | ) | 19.6 | % | (1,290 | ) | (21.0 | )% | (1,112 | ) | (20.9 | )% | (440 | ) | (8.5 | )% | 360.1 | % | 16.0 | % | 152.7 | % | ||||||||||||||||||||||||||
Gross profit | 3,785 | 59.8 | % | 2,272 | 80.4 | % | 4,843 | 79.0 | % | 4,216 | 79.1 | % | 4,708 | 91.5 | % | 66.6 | % | 14.9 | % | (10.5 | )% | |||||||||||||||||||||||||||||||
TOTAL | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net revenue | 487,809 | 470,531 | 913,186 | 814,311 | 703,291 | 3.7 | % | 12.1 | % | 15.8 | % | |||||||||||||||||||||||||||||||||||||||||
Cost of sales | (249,647 | ) | 51.2 | % | (240,433 | ) | 51.1 | % | (468,678 | ) | (51.3 | )% | (416,127 | ) | (51.1 | )% | (387,632 | ) | (55.1 | )% | 3.8 | % | 12.6 | % | 7.4 | % | ||||||||||||||||||||||||||
Gross profit | 238,162 | 48.8 | % | 230,098 | 48.9 | % | 444,508 | 48.7 | % | 398,184 | 48.9 | % | 315,659 | 44.9 | % | 3.5 | % | 11.6 | % | 26.1 | % |
(1) | Includes revenues that are not allocable to a particular division, such as revenues derived primarily from engineering, reinsurance, travel services and leased real estate. |
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• | costs and expenses relating to the operation of Grifols’ business, including working capital for inventory purchases and accounts receivable financing; | |
• | capital expenditures for existing and new operations; and | |
• | debt service requirements relating to Grifols’ existing and future debt. |
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for the years ended December 31, 2009, 2008, and 2007 and the Six Months Ended June 30, 2010 and 2009
(Expressed in thousands of Euros)
06/30/10 | 06/30/09 | 12/31/09 | 12/31/08 | 12/31/07 | ||||||||||||||||
Cash flows from operating activities | ||||||||||||||||||||
Profit before tax | 88,852 | 115,008 | 203,994 | 172,269 | 123,587 | |||||||||||||||
Adjustments for: | 53,782 | 26,657 | 61,800 | 66,034 | 59,362 | |||||||||||||||
Amortisation and depreciation | 21,434 | 19,124 | 39,554 | 33,256 | 31,528 | |||||||||||||||
Other adjustments: | 32,348 | 7,533 | 22,246 | 32,778 | 27,834 | |||||||||||||||
(Profit) /losses on equity accounted investments | 728 | (10 | ) | (51 | ) | (24 | ) | (19 | ) | |||||||||||
Exchange differences | (1,970 | ) | (211 | ) | 1,733 | 2,825 | 4,617 | |||||||||||||
Net provision charges | 129 | 873 | 53 | 1,994 | 156 | |||||||||||||||
(Profit) / loss on disposal of fixed assets | (681 | ) | 328 | 1,147 | 2,001 | 1,073 | ||||||||||||||
Government grants taken to income | (550 | ) | (1,034 | ) | (1,188 | ) | (2,943 | ) | (283 | ) | ||||||||||
Net finance expense | 33,386 | 6,879 | 17,551 | 27,891 | 18,168 | |||||||||||||||
Other adjustments | 1,306 | 708 | 3,001 | 1,034 | 4,122 | |||||||||||||||
Changes in capital and assets | 13,700 | (62,940 | ) | (104,127 | ) | (86,550 | ) | (43,577 | ) | |||||||||||
Change in inventories | (11,982 | ) | (60,282 | ) | (113,104 | ) | (98,520 | ) | (45,516 | ) | ||||||||||
Change in trade and other receivables | 20,239 | (32,202 | ) | (12,549 | ) | (7,951 | ) | (13,209 | ) | |||||||||||
Change in current financial assets and other current assets | (3,875 | ) | (1,652 | ) | (1,287 | ) | 405 | (880 | ) | |||||||||||
Change in current trade and other payables | 9,318 | 31,196 | 22,813 | 19,516 | 16,028 | |||||||||||||||
Other cash flows from operating activities | (34,465 | ) | (24,559 | ) | (73,487 | ) | (77,310 | ) | (45,184 | ) | ||||||||||
Interest paid | (19,801 | ) | (9,347 | ) | (14,719 | ) | (25,972 | ) | (19,525 | ) | ||||||||||
Interest recovered | 3,861 | 4,659 | 2,509 | 2,213 | 2,876 | |||||||||||||||
Income tax paid | (18,525 | ) | (19,871 | ) | (61,277 | ) | (53,551 | ) | (28,535 | ) | ||||||||||
Net cash from operating activities | 121,869 | 54,166 | 88,180 | 74,443 | 94,188 | |||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||
Payments for investments | (56,997 | ) | (67,749 | ) | (136,626 | ) | (130,923 | ) | (72,573 | ) | ||||||||||
Group companies and business units | (3,727 | ) | (15,826 | ) | (15,385 | ) | (632 | ) | (17,077 | ) | ||||||||||
Property, plant and equipment and intangible assets | (49,151 | ) | (51,774 | ) | (118,770 | ) | (129,568 | ) | (55,496 | ) | ||||||||||
Property, plant and equipment | (43,146 | ) | (44,705 | ) | (103,415 | ) | (119,824 | ) | (47,190 | ) | ||||||||||
Intangible assets | (6,005 | ) | (7,069 | ) | (15,355 | ) | (9,744 | ) | (8,306 | ) | ||||||||||
Other financial assets | (4,119 | ) | (149 | ) | (2,471 | ) | (723 | ) | 0 | |||||||||||
Proceeds from the sale of investments | 2,863 | 809 | 673 | 157 | 1,859 | |||||||||||||||
Property, plant and equipment | 2,863 | 809 | 673 | 157 | 894 | |||||||||||||||
Other financial assets | 0 | 0 | 0 | 0 | 965 | |||||||||||||||
Net cash used in investing activities | (54,134 | ) | (66,940 | ) | (135,953 | ) | (130,766 | ) | (70,714 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Proceeds from and payments for equity instruments | (1,250 | ) | (22,801 | ) | 26,655 | (4,212 | ) | (28,893 | ) | |||||||||||
Issue | 0 | 0 | (76 | ) | 0 | 0 | ||||||||||||||
Acquisition of treasury shares | (1,250 | ) | (22,860 | ) | (25,186 | ) | (4,880 | ) | (28,893 | ) | ||||||||||
Disposal of treasury shares | 0 | 59 | 51,917 | 668 | 0 | |||||||||||||||
Proceeds from and payments for financial liability instruments | (8,671 | ) | 95,818 | 344,413 | 96,349 | (1,974 | ) | |||||||||||||
Issue | 51,067 | 106,320 | 525,078 | 394,109 | 123,839 | |||||||||||||||
Redemption and repayment | (59,738 | ) | (10,502 | ) | (180,665 | ) | (297,760 | ) | (125,813 | ) | ||||||||||
Dividends and interest on other equity instruments paid | (53 | ) | (48,746 | ) | (80,913 | ) | (34,792 | ) | (12,805 | ) | ||||||||||
Other cash flows from financing activities | 323 | 0 | 741 | 0 | 0 | |||||||||||||||
Other amounts received from financing activities | 323 | 0 | 741 | 0 | 0 | |||||||||||||||
Net cash (used in)/from financing activities | (9,651 | ) | 24,271 | 290,896 | 57,345 | (43,672 | ) | |||||||||||||
Effect of exchange rate fluctuations on cash | 42,684 | (69 | ) | (119 | ) | (344 | ) | (995 | ) | |||||||||||
Net increase in cash and cash equivalents | 100,768 | 11,428 | 243,004 | 678 | (21,193 | ) | ||||||||||||||
Cash and cash equivalents at beginning of the year | 249,372 | 6,368 | 6,368 | 5,690 | 26,883 | |||||||||||||||
Cash and cash equivalents at end of year | 350,140 | 17,796 | 249,372 | 6,368 | 5,690 |
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• | a €13.2 million increase in receivables due mainly to increased delays in payments by hospitals and clinics in Spain, Italy and Portugal that are part of the social security systems of those countries. In Spain, receivables aging was negatively impacted by a regulatory change in 2002 whereby the responsibilities for healthcare administration were transferred from the central government to certain regional governments. This resulted in substantial delays as regional administrators claimed that they required additional time to adapt their control and payment systems to the new regulatory framework. This increase in aging of receivables was offset in part by a shift in Grifols’ geographic sales mix towards the United States, where credit periods tend to be significantly shorter; | |
• | a €16.0 million increase in current liabilities, with a day payable outstanding ratio of 62 days; and | |
• | a €45.5 million increase, with a stock turnover of 255 days. |
• | a €12.5 million increase in receivables, with the days sales outstanding ratio remaining at 83 days, which was similar to 2008; | |
• | a €113.1 million increase in inventories, which represented a significant increase from 2008, with the days sales outstanding ratio at 377 days, due to increased plasma collection activity and slower-than-budgeted sales, which resulted in remaining inventory at the stage of intermediate or finished goods; and | |
• | a €22.8 million increase in current liabilities, with a day payable outstanding ratio of 64 days. |
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December 31, | June 30, | |||||||||||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | |||||||||||||||||||||||||||||
(000s) Euro | Days(1) | (000s) Euro | Days(1) | (000s) Euro | Days(1) | (000s) Euro | Days(1) | |||||||||||||||||||||||||
Inventory(2) | 270,659 | 255 | 373,098 | 327 | 484,462 | 377 | 545,277 | 416 | ||||||||||||||||||||||||
Receivables(3) | 174,351 | 90 | 186,324 | 84 | 207,840 | 83 | 194,259 | 76 | ||||||||||||||||||||||||
Payables(4) | 73,764 | 62 | 95,396 | 65 | 108,274 | 64 | 114,360 | 71 |
(1) | At the last day of the period. | |
(2) | Aging of inventory is calculated by dividing total inventories, as the case may be, at the end of each period by the total cost of sales for such period and multiplying the result by 365. For an explanation of how Grifols calculates cost of sales, see “— Management’s Analysis of Cost of Sales and Gross Margin.” | |
(3) | Grifols has calculated the average age of receivables by Total Receivables * 365/Sales (last 12 months). | |
(4) | Grifols has calculated the average age of payables by Total Payables * 365 /Purchases + External services + Acquisitions fixed assets third parties (last 12 months). Payables include only the concepts that are also included as purchases, external services and acquisitions fixed assets. |
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Six Months | Years Ended | |||||||||||||||
Ended | December 31, | |||||||||||||||
June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||
(000) Euro | ||||||||||||||||
Facilities(1) | 34,170 | 65,076 | 62,292 | 31,201 | ||||||||||||
Development cost(2) | 1,210 | 5,626 | 3,662 | 3,897 | ||||||||||||
Bioscience division | 35,380 | 70,702 | 65,954 | 35,098 | ||||||||||||
Facilities(1) | 4,095 | 7,524 | 9,266 | 3,452 | ||||||||||||
Development cost(2) | — | — | — | — | ||||||||||||
Hospital division | 4,095 | 7,524 | 9,266 | 3,452 | ||||||||||||
Facilities(1) | 4,519 | 11,547 | 12,485 | 3,319 | ||||||||||||
Development cost(2) | 1,976 | 2,520 | 1,593 | 1,635 | ||||||||||||
Diagnostic division | 6,495 | 14,067 | 14,078 | 4,954 | ||||||||||||
Raw materials division | — | — | 516 | — | ||||||||||||
Shared infrastructure | 6,729 | 26,477 | 39,879 | 11,991 | ||||||||||||
Total | 52,699 | 118,770 | 129,693 | 55,495 |
(1) | Facilities includes manufacturing and other facilities. | |
(2) | Development cost includes the capitalized portion only. Development expenses are capitalized only when the conditions of IAS 38 for such capitalization are met and are subsequently depreciated over an estimated useful life, as permitted under IFRS). Otherwise, research and development expenses are expensed as they are incurred. For 2007, 2008, 2009 and the six months ended June 30, 2010, Grifols had total development expenses of €29.4 million, €25.6 million, €35.2 million and €15.6 million, respectively, and had amortizations on development cost of €4.6 million, €4.6 million, €5.6 million and €1.1 million, respectively. |
• | the investment of €17.5 million to increase the fractionation capacity at the Los Angeles plant in 2007; | |
• | the acquisition of Novartis’ former industrial facilities in Parets del Vallès in Barcelona, Spain for €17.5 million; | |
• | the acquisition of Grifols’ headquarters for €35 million in 2008; | |
• | the opening of a new building in Barcelona to house the raw material storage unit for €2.5 million in 2008; | |
• | the establishment of research and development quality control laboratories and the installation of new manufacturing lines for parenteral nutrition products for the Hospital division for €2.5 million in 2008; | |
• | the establishment of a new preparation area to increase the production of DG Gel cards completed in 2008 for €1.7 million in 2008; | |
• | investment at the Los Angeles plant to fund its expansion, improvements and specialized machinery for €5 million; | |
• | capital expenditures for the Los Angeles plant in the amount of €29.2 million in 2009; and | |
• | refurbishment work at Grifols headquarters for €14.2 million in 2009. |
• | completion of the FDA licensing process for the sale of Flebogamma DIF IVIG in the United States in early 2007, which consists of a new method for obtaining IVIG that could significantly increase the protein yield and would provide increased safety through the use of a new method of viral elimination known as nanofiltration; | |
• | completion of the development of Erytra in early 2010, which is a fully automated instrument with a high processing capacity for pre-transfusion compatibility tests using the gel agglutination technique; |
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• | improvements to the Triturus and Wadiana automated analyzers; | |
• | pursuit of Albumin usage in the treatment of Alzheimer’s disease; | |
• | conducting clinical trials for the sale of Flebogamma DIF 10% in ITP in the European Union; and | |
• | continuation of clinical trials for the sale of fibrin glue which is a fibrin clot preparation to control bleeding during surgery in the United States. |
• | investments in the Los Angeles IVIG plant of approximately €16.0 million; | |
• | incur refurbishment costs and make information technology-related expenditures at its headquarters of approximately €4.9 million; | |
• | incur costs related to the expansion of the new fractionation plant in Parets del Vallès of approximately €6.8 million; | |
• | investments for the new laboratories in San Marcos, Texas, United States of approximately €8.2 million; and | |
• | investments for the new plant in Murcia, Spain of approximately €10.0 million; |
• | investments related to the Parets del Vallès plant in Spain of approximately €10.4 million, mainly related to fractionation capacity expansion; | |
• | incur further headquarters-related expenses of approximately €6.2 million; | |
• | incur expansion costs at the existing Parets del Vallès facility of approximately €3.2 million; | |
• | make investments in the new Albumin facilities in Los Angeles, California, United States of approximately €3.2 million; and | |
• | further expenditures at the new plant in Murcia, Spain of approximately €5.3 million. |
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Payments Due by Period | ||||||||||||||||||||||||
After | ||||||||||||||||||||||||
Total | 2010 | 2011 | 2012 | 2013 | 2013 | |||||||||||||||||||
(000) Euro | ||||||||||||||||||||||||
Operating leases(1) | 44,125 | 10,098 | 8,261 | 7,101 | 5,531 | 13,134 | ||||||||||||||||||
Financial debt obligations(2) | 817,177 | 113,991 | 81,388 | 79,696 | 75,904 | 466,198 | ||||||||||||||||||
Interest — financial debt obligations(3) | 294,346 | 36,543 | 34,312 | 33,353 | 32,592 | 157,546 | ||||||||||||||||||
Licenses and royalties(4) | 11,820 | 5,003 | 2,861 | 2,754 | 578 | 624 | ||||||||||||||||||
Total | 1,167,468 | 166,635 | 126,822 | 122,904 | 114,605 | 637,502 |
(1) | Operating leases include primarily leases for Grifols’ plasma collection centers and marketing offices worldwide. These amounts reflect only Grifols’ contractual obligations as of December 31, 2009, and therefore assume that these operating leases will not be renewed or replaced with new operating leases upon expiration. Investors are cautioned that Grifols’ operating lease expenses will likely be substantially higher than the amounts provided in this table because Grifols’ operations will require Grifols to either renew or replace Grifols’ operating leases. | |
(2) | Includes principal amortization for short and long-term debt including, among other things, capitalized lease obligations. The financial debt primarily relates to €817.2 million outstanding as of December 31, 2009 under a $600.0 million of the Notes in the United States, a €195.5 million syndicated loan facility that bears interest at an annual rate of EURIBOR plus 0.80% for euro-denominated debt and LIBOR plus 0.80% for US dollar-denominated debt. The remaining financial debt is made up largely of working capital facilities that bear interest at market rate. See “— Indebtedness — Bank Debt — Syndicated loan” and “— Indebtedness — Bank Debt — Working capital facilities.” | |
(3) | Computed using interest rates in effect as of December 31, 2009. | |
(4) | License and royalties payment formulas are generally based on volume of sales. The amounts presented in the table are calculated based on the net sales of 2009 without assuming any growth in sales. Additionally, the columns “After 2010” and “Total” only include one year of payments under the license agreement with Marca Grifols, S.L. which expires in January 2092. See “Related Party Transactions.” |
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Name | Title | Type | Director Since | |||
Víctor Grifols Roura | Director, Chairman of the Board of Directors and Chief Executive Officer (Consejero Delegado) | Executive | July 1991(1) | |||
Juan Ignacio Twose Roura | Director | Executive | April 2000(2) | |||
Ramón Riera Roca | Director | Executive | April 2000(3) | |||
Tomás Dagá Gelabert | Director | Other External | April 2000 | |||
Thorthol Holdings B.V. (represented by Mr. José Antonio Grifols Gras) | Director | Proprietary | January 2000(4) | |||
Thomas H. Glanzmann | Director | Independent | April 2006 | |||
Edgar Dalzell Jannotta | Director | Independent | December 2006 | |||
Anna Veiga Lluch | Director | Independent | December 2008 | |||
Raimon Grifols Roura | Secretary non-member | — | July 2001 | |||
Nuria Martín Barnés | Vice Secretary non-member | — | July 2001 |
(1) | Between July 8, 1991 and May 30, 2002, Mr. Víctor Grifols Roura was not a Director but sat on the board as representative of then Grifols director Deria, S.A. | |
(2) | Between May 25, 2001 and May 30, 2002, Mr. Juan Ignacio Twose Roura was not a Director but sat on the board as representative of then Grifols director Grifols Engineering, S.A. | |
(3) | Between May 25, 2001 and May 30, 2002, Mr. Ramón Riera Roca was not a Director but sat on the board as representative of then Grifols director Grifols International, S.A. | |
(4) | Thorthol Holdings B.V. is represented on the Board of Directors by Mr. José Antonio Grifols Gras. Between January 20, 2000 and June 1, 2002 Thorthol Holdings B.V. was not a Director but its current representative on the board, Mr. José Antonio Grifols Gras, sat on the board as director. |
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Name | Title | Since | ||||
Víctor Grifols Roura | Chief Executive Officer | 1985 | ||||
Juan Ignacio Twose Roura | Vice President, Industrial Division | 1988 | ||||
Ramón Riera Roca | Vice President, Marketing and Sales | 1988 | ||||
Alfredo Arroyo Guerra | Vice President and Chief Financial Officer | 2007 | ||||
Montserrat Lloveras Calvo | Administration Director and Controller | 1991 | ||||
Juan Javier Roura Fernández | Financial Director | 1988 | ||||
Antonio Viñes Páres | Planning and Control Director | 1994 | ||||
Eva Bastida Tubau | Scientific Director | 2007 | ||||
Vicente Blanquer Torre | Technical Director | 1993 | ||||
Mateo Florencio Borrás Humbert | Human Resources Director | 2008 | ||||
Carlos Roura Fernández | Deputy Vice President, Industrial Division | 1987 | ||||
Francisco Javier Jorba Ribes | Managing Director of Instituto Grifols, S.A. | 1995 | ||||
Gregory Gene Rich | President and Chief Executive Officer of Grifols Inc. | 2001 | ||||
David Ian Bell | Vice President of Grifols Inc. | 2003 | ||||
Albert Grifols Roura | Managing Director of Laboratorios Grifols S.A. | 1999 | ||||
Miguel Pascual Montblanch | Managing Director of LATAM division at Grifols International, S.A. | 1997 | ||||
Ignacio Ramal Subira | Internal Auditor | 2008 | ||||
Nuria Pascual Lapeña | Investor Relations | 1997 | ||||
Sergio Roura Adell | Managing Director of Grifols Engineering, S.A. | 2001 | ||||
Oriol Duñach Fulla | Managing Director of Diagnostic Grifols, S.A. | 1987 |
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• | reporting to the shareholders at the general shareholders’ meeting with respect to matters raised therein by shareholders regarding its powers; | |
• | reporting to the Board of Directors, in advance of its adoption of decisions, regarding: (i) the financial information that Grifols must periodically disclose, including ensuring that such information is prepared in accordance with the same principles and practices applicable to the annual financial statements and, to that end, it will consider whether it is advisable to have such financial information subject to a limited review by the external auditor; (ii) the creation or acquisition of equity interests in special purpose entities or entities domiciled in countries or territories that are considered to be tax havens and the participation in transactions whose complexity or nature may affect the transparency of Grifols; and (iii) related party transactions; | |
• | in connection with the internal information and control systems: (i) supervising the preparation of, and ensuring the integrity of, the financial information relating to Grifols Group; (ii) periodically reviewing such systems for internal monitoring and management of risks; (iii) looking after the independence and effectiveness of the internal audit function; and (iv) establishing and supervising a mechanism that allows employees to communicate on a confidential and anonymous basis concerns on possible questionable practices in the areas of accounting or auditing; | |
• | in connection with the external auditor: (i) proposing the appointment of the auditor, and, if applicable, the revocation or non-renewal of its appointment; as well as the conditions under which the auditor will be retained; (ii) receiving information from the external auditor on the audit plan, its execution and verifying that management takes into consideration the auditor’s recommendations; (iii) ensuring the external auditor |
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independence; and (iv) to the extent possible, causing Grifols’ external auditor to serve as the external auditor of Grifols’ subsidiaries; and |
• | supervising the observance of Grifols’ Capital Markets Conduct Code, the Board of Directors’ Regulations, Grifols’ Code of Ethics and, in general, the rules of governance and compliance in effect, and make such proposals as are deemed necessary for their improvement. |
• | assisting in the nomination of directors, including evaluating potential nominees in light of the level of knowledge, competence and experience necessary to serve on the Board of Directors; | |
• | reporting and making proposals to the Board of Directors on the appointment of members to the various committees of the Board of Directors and on the persons who should hold the office of Secretary and Vice-secretary of the Board of Directors; | |
• | making proposals for the orderly and planned succession of the Chairman of the Board of Directors and the Chief Executive Officer; | |
• | reporting on proposals for the appointment and removal of any members of senior management made by the Chief Executive Officer; | |
• | making proposals on the remuneration plans for the Board of Directors and senior management; | |
• | periodically reviewing the remuneration plans of senior management, including considering their suitability and performance; and | |
• | reporting on transactions in which directors may have a conflict of interest. |
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Component | Amount Paid in 2009 | |
Salaries | €4,620,136 | |
Variable Compensation | €1,224,731 | |
Stock options and/or other securities | N/A | |
Other — e.g., life and health insurance | N/A | |
Other — e.g., pensions/savings | N/A |
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EXECUTIVE OFFICERS OF GRIFOLS
Number of | ||||||||
Ordinary | Percentage of | |||||||
Name of Beneficial Owner | Shares | Ordinary Shares | ||||||
Major Shareholders | ||||||||
Capital Research and Management Company(1) | 21,353,346 | 10.022 | ||||||
Deria S.A.(2) | 18,706,988 | 8.780 | ||||||
Scranton Enterprises B.V.(3) | 15,898,258 | 7.462 | ||||||
Thorthol Holdings B.V.(4) | 15,042,766 | 7.060 | ||||||
Víctor Grifols Lucas(5) | 12,801,837 | 6.008 | ||||||
The Bank of New York Mellon(6) | 10,600,663 | 4.975 | ||||||
American Funds Insurance Series Growth Fund(7) | 6,400,370 | 3.004 | ||||||
Directors | ||||||||
José Antonio Grifols Gras(4) | 15,042,766 | 7.060 | ||||||
Víctor Grifols Roura | 435,150 | * | ||||||
Edgar Dalzell Jannotta | 254,127 | * | ||||||
Ramón Riera Roca | 169,085 | * | ||||||
Juan Ignacio Twose Roura | 119,274 | * | ||||||
Thomas H. Glanzmann(8) | 57,347 | * | ||||||
Tomás Dagá Gelabert | 44,564 | * | ||||||
Anna Veiga Lluch | 100 | * | ||||||
Executive Officers | ||||||||
Antonio Viñes Parés | 111,115 | * | ||||||
Gregory Gene Rich | 71,598 | * | ||||||
Carlos Roura Fernández | 48,314 | * | ||||||
Francisco Javier Jorba Ribes | 47,364 | * | ||||||
Oriol Duñach Fulla | 39,709 | * | ||||||
Montserrat Lloveras Calvo | 35,309 | * | ||||||
Juan Javier Roura Fernández | 30,059 | * | ||||||
Vicente Blanquer Torre | 22,377 | * | ||||||
Sergio Roura Adell | 17,632 | * | ||||||
Alberto Grifols Roura | 13,000 | * | ||||||
David Ian Bell | 10,000 | * | ||||||
Nuria Pascual Lapeña | 9,796 | * | ||||||
Miguel Pascual Montblanch | 7,500 | * | ||||||
Mateo Florencio Borrás Humbert | 491 | * | ||||||
Alfredo Arroyo Guerra | — | — |
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Number of | ||||||||
Ordinary | Percentage of | |||||||
Name of Beneficial Owner | Shares | Ordinary Shares | ||||||
Eva Bastida Tubau | — | — | ||||||
Ignacio Ramal Subira | — | — |
* | Less than 1%. |
(1) | Capital Research and Management Company has indirect voting rights over all 21,353,346 Grifols ordinary shares. American Funds Insurance Series Growth Fund has direct voting rights over 6,400,370 of the Grifols ordinary shares reported by Capital Research and Management Company. |
(2) | The various members of the Grifols Roura family hold their respective shares indirectly through Deria S.A. All Grifols ordinary shares held by Deria S.A. are voted on all matters in accordance with the recommendation of the Grifols Board of Directors but are subject to the terms and conditions of the applicable Grifols voting agreement. |
(3) | Scranton Enterprises B.V. is a corporation whose shares are owned by certain directors of Grifols and by William Blair & Co. L.L.C. Some Grifols family members who are directors or executive officers hold part of their shares indirectly through Scranton Enterprises B.V. |
(4) | The various members of the Grifols Gras family hold their respective shares indirectly through Thorthol Holdings B.V., which is represented on the Board of Directors by José Antonio Grifols Gras. All Grifols ordinary shares held by Thorthol Holdings B.V. are voted on all matters in accordance with the recommendation of the Grifols Board of Directors but are subject to the terms and conditions of the applicable Grifols voting agreement. |
(5) | 12,801,837 ordinary shares are held directly by Rodellar Amsterdam B.V., through which Víctor Grifols Lucas exercises indirect voting rights. |
(6) | The Bank of New York Mellon has indirect voting rights over all 10,600,663 Grifols ordinary shares. |
(7) | American Funds Insurance Series Growth Fund has direct voting rights over all 6,400,370 Grifols ordinary shares. American Funds Insurance Series Growth Fund has delegated the right to vote its proxies to Capital Research and Management Company, its investment advisor. |
(8) | 42,300 shares are held indirectly through Kolholmen Investments AB. |
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• | Duty of diligent management. Each director must act diligently in his or her management of Grifols. In particular, the law establishes that he or she must carry out his or her duties with the diligence of an “orderly entrepreneur(ordenado empresario)” and must diligently inform himself or herself of Grifols’ business development; | |
• | Duty of loyalty. Each director must act as a faithful representative (representante leal) in furthering the corporate interest must comply with duties established by the law and Grifols’ ByLaws. In addition, each director: (i) shall not use the name of Grifols or invoke their capacity as directors in order to carry out transactions for their own account or for the account of persons related to them; (ii) may not make, either for his own benefit or for the benefit of any persons related to him, investments or transactions of any kind related to the assets of Grifols which have come to the director’s attention during the performance of his duties as such, when the investment or transaction has been offered to Grifols or Grifols is interested in it, unless Grifols has turned down the investment or transaction and the director has not influenced Grifols’ decision; (iii) must notify the Board of Directors of any direct or indirect conflict of interests which they have with the interests of Grifols (if the conflict arises from a transaction with Grifols, the director is generally prohibited from entering into such a transaction unless the Grifols Board of Directors approves the transaction and the director must abide by the rules referred to in the section entitled “Certain Relationships and Related Party Transactions of Grifols — Director Independence”); (iv) must notify the Grifols Board of Directors, as soon as possible, of any circumstances affecting them which might prejudice the credit or reputation of Grifols, including, but not limited to, criminal cases involving such directors; and (v) must disclose any interest that they hold in the capital of a company engaged in a line of business which is the same as or analogous or complementary to the business of Grifols, as well as any offices held or duties performed therein and the conduct, for the director’s own account or for the account of another, of any kind of business that is the same as, analogous or complementary to the business that the corporate purpose of Grifols consists of; | |
• | Duty of confidentiality. Each director is obligated, even after his or her retirement or removal as director, to keep confidential any information, data, reports and background information they come to know in the performance of their duties, and to refrain from communicating such information to third parties, or otherwise disclosing, if it could be harmful to Grifols’ interests. This duty of secrecy is subject to certain exceptions (for example, those events in which the law permits communication or disclosure to a third party or, if applicable, where the information is required by or must be submitted to the respective supervisory authorities, in which case the disclosure must comply with the applicable legal provisions); and |
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• | Duty of inactivity. Each director must not conduct, or suggest to any person that they conduct, any transactions involving securities of Grifols or any of its subsidiaries, affiliated or related companies in connection with which such directors have, by reason of their position, privileged or confidential information, which is not within the public domain. |
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Talecris Net Revenue 2009 | ||||||||
Category and Talecris Key Products | Talecris Indications | Talecris Share of Sales | (In millions) | |||||
IVIG | Gamunex IVIG | U.S., Canada and EU — PI,ITP, | 23% — U.S.(1) | $599.8 — U.S. | ||||
CIDP. Canada and EU — Post Bone Marrow Transplant, Pediatric HIV Infection. | 14% — Worldwide(2) | $826.4(3) — Worldwide | ||||||
EU only — Kawasaki Disease, Guillain Barre Syndrome, Chronic Lymphocytic Leukemia, Multiple Myeloma | ||||||||
A1PI | Prolastin-C A1PI Prolastin A1PI | A1PI Deficiency related emphysema | 62% — U.S.(1) 74% — Worldwide(2) | $206.1 — U.S. $319.1 — Worldwide | ||||
Fraction V (Albumin and PPF) | Plasbumin-5 (Human) 5% USP Plasbumin-20 (Human) 25% USP Plasmanate, Plasma Protein Fraction 5% USP | Plasma expanders, severe trauma, acute liver and kidney failures | 13% — U.S.(1) 5% — Worldwide(2) | $44.8 — U.S. $84.8(3) — Worldwide | ||||
Factor VIII(4) | Koate DVI | Hemophilia A | 6% — U.S.(1) 5% — Worldwide(2) | $13.6 — U.S. $46.5 — Worldwide | ||||
Antithrombin III | Thrombate III | Hereditary antithrombin III deficiency | 92% — U.S.(1) 6% — Worldwide(2) | $24.2 — U.S. $24.2 — Worldwide | ||||
Hyperimmunes | GamaStan, HyperHepB, HyperRho, HyperRab, HyperTet | Hepatitis A, Hepatitis B, Rabies, RH Sensitization, Tetanus | 20% — U.S.(1) 9% — Worldwide(2) | $59.5 — U.S. $74.2 — Worldwide |
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(1) | For the 2009 calendar year, according to MRB. The Plasma Fractions Market in the United States, 2009. | |
(2) | For the 2008 calendar year, according to MRB. The Worldwide Plasma Fractions Market, 2008. Includes IVIG contract fractionation revenues. | |
(3) | Excludes contract fractionation revenues from the Canadian blood system operators. | |
(4) | Excludes von Willebrands. |
• | Premium Global Liquid 10% IVIG Product. Talecris’ product, Gamunex IVIG, which was launched in North America in 2003 as a premiumready-to-use liquid IVIG product, is one of the leading products in the IVIG segment with a 23% share of United States sales in 2009 according to MRB. Talecris believes Gamunex IVIG is considered to be the industry benchmark due to a comprehensive set of differentiated product characteristics that have positioned it as the premium product in its category since its launch. As a measure of Talecris’ focus on continued enhancement of product safety, the manufacturing process for its IVIG therapy incorporates prion removal, which is described in the FDA approved labeling for Gamunex. Talecris also uses a patented caprylate process that preserves more of the fragile IgG proteins compared to prior generation IVIG products made with a harsher solvent/detergent purification process. Gamunex IVIG is the only IVIG approved for CIDP in the United States, Canada and 16 European countries. Talecris’ CIDP indication approval makes Gamunex the only IVIG approved for use in a neurological indication in North America. According to an independent survey by Harris Interactive, CIDP is the largest IVIG segment in the United States, representing 29% of total unit volume. As the only FDA approved IVIG for CIDP, Talecris believes it doubled its licensed market access to 61% of total United States IVIG unit volume. Further, the FDA granted Gamunex IVIG orphan drug status, which provides marketing exclusivity for the CIDP indication in the United States through September 2015. In an online survey conducted by Harris Interactive on behalf of Talecris during the first quarter of 2010, Gamunex was shown to be the preferred IVIG among neurologists who indicated a brand preference. The survey results showed that neurologists selected Gamunex over four times more often than all other available liquid IVIG therapies, with a statistically significant margin (p<0.05). |
• | Leading Producer of A1PI with Strong Brand Recognition. Talecris is the world’s largest producer of A1PI, which is used for the treatment of A1PI deficiency-related emphysema. In 2009, Prolastin A1PI had a 62% share of sales in the United States and in 2008 had an 87% share of sales in the European Union, which |
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is referred to as the EU, where it is licensed in 14 countries and Switzerland and competes with other licensed A1PI product only in Spain. Talecris is also the only licensed A1PI product in Canada. While other manufacturers began selling A1PI products in the United States and Spain beginning in 2003, Talecris continues to benefit from having been the first provider in this product class and from its strong relationships with the primary patient advocacy groups. Talecris believes Prolastin/Prolastin-C A1PI is differentiated in the United States by its uniquedirect-to-patient distribution and service model, Prolastin Direct, which provides easy enrollment, home infusion, access to insurance experts and patient-centered health management. Prolastin Direct health management provides better patient outcomes by reducing the frequency of respiratory exacerbations. Furthermore, Prolastin Direct results in high medication compliance, with over 94% of prescribed doses being administered annually and high patient loyalty, with an annual retention rate of over 96%. Based upon Talecris’ internal estimates, Talecris believes that approximately 30% of the global patient population for A1PI products resides in European countries where Prolastin is now licensed. Talecris is developing additional product enhancements, including a recombinant version of its A1PI product. Talecris received FDA approval for its next generation A1PI product,Prolastin-C A1PI in October 2009. A post-approval clinical trial was required as a condition for approval. Talecris submitted a supplemental New Drug Submission, which is referred to as an sNDS, to Health Canada for the approval of Prolastin-C A1PI in March 2009 and Prolastin-C A1PI was approved for use in Canada in February 2010. Presently, additional clinical trials are being required by European authorities as a precursor to Prolastin-C A1PI approval in Europe. In March 2010, Talecris launched Prolastin-C A1PI in the United States and has essentially completed conversion of its existing United States patients to Prolastin-C A1PI. Talecris launched Prolastin-C A1PI in Canada in the 2010 third quarter. Prolastin-C A1PI has improved yields and higher concentration. As a result, infusion time for patients will be significantly reduced. |
• | Vertically Integrated Global Platform. Talecris has an integrated platform including plasma collection and procurement, fractionation, and finished product manufacturing. |
• | TPR Plasma Platform. Until 2006, Talecris purchased all of its plasma, which is Talecris’ primary raw material, from third parties. Since then, Talecris has successfully designed and executed its vertical plasma supply integration strategy and, as of July 1, 2010, Talecris operated 69 plasma collection centers (66 FDA licensed, three unlicensed) with approximately 2,400 employees. Over the past four years, Talecris has aggressively expanded its plasma supply through these collection centers under its wholly-owned subsidiary, Talecris Plasma Resources, Inc., which is referred to as TPR. This gives Talecris access to future supply of plasma that it believes will meet product demand. These centers collectively represent substantially all of Talecris’ currently planned collection center network for the next three years. Talecris expects that this network, once it matures, will provide in excess of 90% of Talecris’ current plasma requirements. Additionally, in August 2008, Talecris entered into a five-year plasma supply agreement with CSL Plasma Inc., which has declining annual minimum volume commitments with the ability to request higher volumes annually, and provides flexibility as Talecris increases internal production. Talecris has notified CSL Plasma Inc. that it will not elect to take optional volumes under the contract in 2011. To meet its plasma requirements, Talecris may increase donor fees, increase marketing expenses, and expand plasma center hours of operations, among other initiatives, which may result in an increase to its cost per liter of plasma. | |
• | Integrated Facilities. Talecris’ Clayton, North Carolina site is one of the world’s largest integrated protein manufacturing sites, including fractionation, purification and aseptic filling and finishing of plasma-derived proteins. Together with its facility in Melville, New York, Talecris has a combined fractionation capacity of approximately 4.2 million liters of plasma per year. Talecris processed approximately 3.6 million liters of plasma during 2009, which represented a utilization rate of approximately 85% of its fractionation capacity. From 1995 through June 30, 2010, Talecris’ facilities at Clayton have benefited from roughly $666 million of capital investment, including compliance enhancements, general site infrastructure upgrades, capacity expansions, and new facilities, such as its chromatographic purification facilities and its high-capacity sterile filling facility. Talecris has embarked on a capital spending plan which it currently estimates will be in the range of $800 million to $850 million on a cumulative basis from 2010 through 2014, which includes the |
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expansion of Talecris’ fractionation capacity 43% to 6.0 million liters in order to allow it to keep pace with the expected demand growth for plasma-derived products and to provide a balance with its Gamunex purification capacities. |
• | Leader and Innovator in the Global Plasma Products Industry. According to MRB, Talecris is one of the largest producers and marketers of plasma-derived protein therapies in the world. Talecris has a successful history of product innovation and commercialization, and it possesses specific expertise and core competencies in the development, purification, large-scale manufacture and sale of protein therapeutics. Talecris’ longstanding infrastructure, processes and expertise have enabled it to develop a growing stable of marketed products and also to create a robust pipeline of potential new products. |
• | Process and Product Innovation. Talecris is the developer of the firstready-to-use 10% liquid IVIG product in North America and the first A1PI product in the world. Talecris has applied new developments in protein purification, including caprylate and chromatography technologies, and is now producing and selling a third-generation IVIG product. Talecris’ next generation A1PI product, Prolastin-C A1PI, was recently approved by the FDA and Health Canada. In March 2010, Talecris launched Prolastin-C A1PI in the United States and plans to launch Prolastin-C A1PI in Canada in the 2010 third quarter. Presently, additional clinical trials are being required by European authorities as a precursor to Prolastin-C A1PI approval in Europe. Talecris has essentially completed the conversion of its existing United States patients to Prolastin-C A1PI. |
• | R&D Pipeline. Talecris’ current research and development consists of a range of programs that aim to develop new products, obtain new therapeutic indications for existing products, enhance product delivery, improve concentrations and safety, and increase product yields. Talecris is investigating Direct Acting Thrombolytic (DAT) Plasmin to assess its safety and efficacy in the treatment of aPAO, a condition in which arterial blood flow to the extremities, usually the legs, is blocked by a clot. Talecris completed its Phase I clinical trial in the first quarter of 2010 and is finalizing the design of its Phase II clinical trial which it will initiate in the latter half of 2010 in several countries outside of the United States. Talecris has received approval to proceed with a proof of concept trial for plasma-derived Plasmin to treat ischemic stroke in six countries outside of the United States and has initiated the trial. |
• | Favorable Distribution Arrangements. Talecris enjoys favorable distribution arrangements, particularly in North America for its IVIG products. Talecris’ size, history and reputation in the industry have enabled it to establish direct and indirect channels for the distribution of its products, and have provided it with experience in appropriately addressing its key regulators, doctors, patient advocacy groups and plasma protein policy makers. |
• | In the United States, Talecris has three specialty sales teams (Immunology/Neurology, Pulmonary and Hematology/Specialty) that have a combination of extensive commercial and healthcare-related experience calling on a variety of touch points including physicians, pharmacists, and homecare companies. Talecris’ specialty sales teams educate physicians and other healthcare providers on the benefits of its plasma-derived therapies. Talecris’ Immunology/Neurology team focuses on promoting Gamunex as the only IVIG product approved for a neurological indication in the United States. Talecris’ Pulmonary team focuses on the identification of A1PI patients and driving brand choice for Prolastin-C A1PI. Talecris’ Hematology/Specialty team promotes Koate, Thrombate III, and Talecris’ portfolio of hyperimmune products. | |
• | Talecris is the primary supplier of plasma-derived products to the Canadian blood system under its contracts with the two national Canadian blood system operators, Canadian Blood Services and Hema Quebec. Talecris was awarded five year contracts which became effective April 1, 2008. These five year contracts provide for escalated pricing, based on inflation, for contract fractionation services and commercial products, including Gamunex, Plasbumin, and certain hyperimmune products, effective April 1 of each year throughout the terms of the agreements. Under these contracts, Talecris currently fractionates 70% of Canadian plasma and Talecris expects to supply the majority of the Canadian requirements for IVIG during the terms of the contracts. The contracts may be extended for two one-year terms upon agreement of the parties. The total purchase commitment by Canadian Blood Services and Hema Quebec under these contracts was approximately $139 million and $71 million, respectively, in |
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2009 and will be $122 million and $62 million, respectively, in 2010, subject to annual volume and price adjustments. Talecris has experienced, and expects to continue to experience, annual volume declines in Canada due to Canadian Blood Services’ objective to have multiple sources of supply, which has impacted and will continue to impact Talecris’ overall IVIG growth. Canadian Blood Services may further reduce volumes to contract minimums and Hema Quebec may adopt a similar strategy. Talecris transports plasma from Canadian Blood Services and Hema Quebec collection centers to its manufacturing facility in Clayton, North Carolina for fractionation, and returns the finished product, along with commercial product, for sale to Canadian Blood Services and Hema Quebec. The contracts are terminable upon the occurrence of certain events, including a third party obtaining Canadian regulatory approval to introduce a significantly superior product or fractionation service. These five-year contracts are currently the largest government contracts for IVIG units globally. |
• | Talecris has consolidated its distribution network and simultaneously entered into agreements with major hospital group purchasing organizations, which are referred to as GPOs, home care and specialty pharmacy providers and distributors which Talecris believes grant it favorable volume and payment terms. Talecris has contractual commitments from its customers for a majority of its North American IVIG volume over the next three years. Talecris has made appropriate commitments to the Public Health Service and Federal Supply Schedule programs as part of its distribution system. Talecris recently entered a co-promotion agreement with Novartis for HyperRab, its hyperimmune product for rabies. |
• | Experienced, Proven Management Team. Talecris’ business is led by an experienced management team, with its executive officers possessing an average of nearly 11 years of experience in the plasma/protein therapeutics business and an average of over 15 years of experience in healthcare-related businesses. Talecris has the complex technical knowledge required in the protein therapeutic products industry, proven competency in commercializing protein therapeutic products and the expertise to manage an operationally complex business efficiently. |
• | Achieve Cost Efficiencies in Talecris’ Plasma Collection Platform. In 2006, Talecris made the strategic decision to vertically integrate its plasma supply chain in order to enhance the predictability, sustainability and profitability of its plasma supply. Talecris’ rapid vertical integration of its plasma supply was accomplished through the development of an extensive infrastructure to manage the multiple work streams necessary to accomplish the development of its current plasma collection platform. The infrastructure necessary to integrate the centers it acquired from International BioResources, L.L.C. and affiliated entities (IBR) in November 2006 and to open new centers which formed its current 69 center platform included third party consultants as well as additional management. Talecris believes that it generally takes three to four years to mature a plasma center. Talecris has eliminated the third party consultants used to develop the platform and reduced the management necessary to drive the platform development resulting in a significant reduction in cost. Talecris’ historical comparisons illustrate the substantial reduction in both the collection cost per liter and the amount of the excess period costs charged directly to cost of goods sold as a result of the maturation of its plasma collection center platform. Decreasing collection costs and the reduction of excess period costs, combined with leveraging its manufacturing facilities as a result of higher volumes, have contributed to improving Talecris’ gross margins. Talecris believes that it has substantially eliminated unabsorbed infrastructure andstart-up costs. Consequently, future margin improvements will need to be derived from increases in product pricing and volumes, product mix, improvements in the cost per liter of plasma, manufacturing efficiencies, yield improvements or some combination thereof. Talecris believes that the current environment does not favor near-term price increases and it has limited opportunities to enhance product mix. Talecris has recently experienced and expects to continue to experience higher cost of goods sold due to yield variability, less efficient utilization of each incremental liter of plasma fractionated as it increases Gamunex production, and |
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non-capitalizable costs associated with its capital projects, particularly the construction of its new fractionation facility. |
• | Improve Operating Leverage through Increased Recovery of Plasma Proteins. Talecris seeks to improve its profitability by capitalizing on the operating leverage in its business model. A significant portion of its cost structure, other than raw materials, is relatively fixed and therefore incremental volume contributes significant additional profit. Talecris’ capital expenditure plan is designed, in part, to facilitate the production of an increasing volume of existing and new products from each liter of plasma. Talecris currently has purification capacity constraints related to the production of albumin and Koate, its plasma-derived Factor VIII product. Talecris also expects to be less efficient in the utilization of each incremental liter of plasma fractionated as it increases Gamunex production, which will result in gross margin erosion. Additionally, Talecris anticipates that it will reach its fractionation capacity in the near future. Consequently, Talecris has embarked on a capital spending plan which it currently estimates will be in the range of $800 million to $850 million on a cumulative basis from 2010 through 2014. Key elements of this plan include a new fractionation facility which Talecris currently estimates to cost $340 million plus an additional $40 million in capitalized interest, to expand Talecris’ fractionation capacity from 4.2 million liters to 6.0 million liters. This 43% capacity expansion will allow Talecris to keep pace with expected demand growth for plasma-derived products and will provide a balance with Talecris’ Gamunex purification capacity. Talecris also plans to expand albumin and Koate purification capacities and to construct a new facility for Plasmin. Talecris is targeting 2015 for commercial production from its new fractionation facility, with additional albumin and Koate purification capacities available in the next five to six years. This capacity expansion will allow Talecris to improve the utilization of the proteins in each liter of plasma which should result in additional gross margin improvement opportunities once completed. | |
• | Enhance Growth through New Plasma-Derived and Recombinant Proteins. Talecris continues to pursue growth through its internal development capabilities and in-licensing of new technologies and products. Increases in Talecris’ research and development spending will be driven by its emphasis on new plasma-derived molecules as well as the development of its recombinant capabilities in addition to its life cycle management activities, particularly as they relate to A1PI. Talecris believes that its plasma-derived and recombinant Plasmin therapies hold particular promise. Plasmin is a natural protein that dissolves blood clots for which Talecris is pursuing two versions. Talecris is developing a plasma-derived molecule, which recently completed a Phase I clinical trial for aPAO and a commercial process to produce a recombinant form to treat ischemic stroke. Additionally, Talecris is developing recombinant versions of Factor VIII and A1PI through the use of human cell lines. If successful, the development of these therapies could significantly improve Talecris’ revenue and profitability. In addition, Talecris’ external business development will focus on proteins where Talecris has synergies or core competencies in research, manufacturingand/or marketing. |
• | Broaden Geographic Reach. During 2009, approximately 80% of Talecris’ net revenue was generated in North America, whereas North America represented only approximately 37% of global plasma product sales in 2008, according to MRB. For the six months ended June 30, 2010, approximately 81% of Talecris’ net revenue was generated in North America. Although Talecris’ business is concentrated in North America, Talecris sees significant opportunities to broaden its geographic reach in Europe as well as the rest of the world. In terms of A1PI, there are a number of European countries with registries of identified A1PI patients whose healthcare systems currently do not provide for reimbursement for the use of A1PI therapy. Talecris hopes to obtain reimbursement for these patients as it engages with the respective governmental healthcare organizations, patient advocacy groups and supporting physicians and scientists. Talecris also believes that the approval for the CIDP indication in 16 European countries will facilitate Gamunex market expansion. Additionally, Talecris believes that the demand for plasma-derived therapies, particularly IVIG, Factor VIII and albumin are increasing internationally with improving socio-economic conditions and medical education regarding the benefits of plasma-derived therapies. Until Talecris’ facilities are expanded as described above, significant growth in Talecris’ international distribution will be limited and its focus will be on developing channels and relationships. |
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Net Revenue | ||||||||||||||||||||
(In millions) | ||||||||||||||||||||
Six Months | ||||||||||||||||||||
Ended | Years Ended December 31, | |||||||||||||||||||
Category and Key Products | Talecris’ Indications | June 30, 2010 | 2009 | 2008 | 2007 | |||||||||||||||
IVIG(1) | Gamunex IVIG | U.S., Canada, and EU-PI, ITP, CIDP. Canada and | $ | 426.7 | $ | 826.4 | $ | 677.7 | $ | 646.8 | ||||||||||
EU-Post Bone Marrow Transplant, Pediatric HIV Infection. EU only — Kawasaki Disease, Guillain Barre Syndrome, Chronic Lymphocytic Leukemia, Multiple Myeloma | ||||||||||||||||||||
A1PI | Prolastin-C A1PI/ Prolastin | A1PI deficiency-related emphysema | $ | 168.2 | $ | 319.1 | $ | 316.5 | $ | 276.5 | ||||||||||
Fraction V (Albumin and PPF)(1) | Plasbumin-5 (Human) 5% USP Plasbumin-20 (Human) 25% USP Plasmanate Plasma Protein Fraction 5% USP | Plasma expanders, severe trauma, acute liver and kidney failures | $ | 44.4 | $ | 84.8 | $ | 61.1 | $ | 68.8 | ||||||||||
Factor VIII | Koate DVI | Hemophilia A | $ | 23.8 | $ | 46.5 | $ | 40.2 | $ | 33.7 | ||||||||||
Antithrombin III | Thrombate III | Hereditary antithrombin III deficiency | $ | 14.0 | $ | 24.2 | $ | 21.3 | $ | 15.8 | ||||||||||
Hyperimmunes | GamaStan HyperHepB HyperRho HyperRab HyperTet | Hepatitis A, hepatitis B, Rabies, RH Sensitization, Tetanus | $ | 33.8 | $ | 74.2 | $ | 78.2 | $ | 68.8 |
(1) | Excludes contract fractionation revenues from the Canadian blood system operators. |
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• | Talecris has a well-established and respected brand — Prolastin/Prolastin-C A1PI — supported bydirect-to-patient service systems in the United States. | |
• | In 2006, Talecris completed a Mutual Recognition Procedure to sell product in European countries with significant identified patient populations. Prolastin is approved in 15 European countries and Talecris is currently established in six of these markets. Talecris has been in reimbursement discussions with a number |
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of these countries since late 2007 and these discussions must be concluded before Talecris can expect to significantly increase sales in these countries. Competitors are currently only licensed in the United States, Spain and France. |
• | Talecris has strong physician and patient community relationships, developed over 20 years. | |
• | Talecris continues to devote resources to increase disease awareness and support diagnostic testing to increase the identified patient population. | |
• | In March 2010, Talecris launched Prolastin-C A1PI in the United States and has essentially completed conversion of its existing U.S. patients to Prolastin-C A1PI. Prolastin-C A1PI is also approved in Canada and Talecris plans to launch Prolastin-C A1PI in Canada in the 2010 third quarter. | |
• | Prolastin-C A1PI has improved yields, higher concentration, and significantly reduced infusion time. |
• | Emergency treatment of Hypovolemic Shock | |
• | Burn therapy | |
• | Hypoproteinemia with or without edema | |
• | Adult Respiratory Distress Syndrome (ARDS) | |
• | Cardiopulmonary bypass | |
• | Acute Liver Failure | |
• | Neonatal Hemolytic Disease | |
• | Acute Nephrosis | |
• | Eythrocyte Resuspension | |
• | Renal Dialysis |
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• | Talecris produces plasma-derived Factor VIII. Factor VIII is the primary treatment for Hemophilia A, a congenital bleeding disorder caused by a deficiency of coagulation agents in the blood. Koate DVI had a 6% share of sales in the United States in 2009 and 5% worldwide in 2008 according to MRB. Sales of plasma-derived hemostasis products in 2009 were $477.9 million in the United States. In 2008 sales were $2.5 billion worldwide (includes plasma-derived Factor VIII, FIX, ATIII, von Willebrands, and FVII). Plasma-derived Factor VIII faces significant competition from recombinant products that are not derived from plasma in the United States and the European Union. Growth in the demand for plasma-derived Factor VIII is being driven by increased patient identification and treatment in developing countries. The current per capita Factor VIII utilization is significantly higher in the United States and the European Union than in developing countries. Plasma-derived Factor VIII has lost sales to recombinant products, which have generally been perceived to have lower risk of disease transmission than plasma-derived Factor VIII products. Demand for Koate also exceeds Talecris’ supply. Talecris is expanding production capabilities in a phased approach to help meet demand. Increased supply enables Talecris to sell more product per liter of plasma, helping to drive its margin expansion strategy. |
• | ATIII is an important anticoagulant and ATIII therapies are designed to treat and prevent thromboemboli, or spontaneous clotting within vital organs, in patients with congenital ATIII deficiency during high-risk surgery, trauma, pregnancy or childbirth. A transgenic ATIII product produced in the milk of transgenic goats by GTC Biotherapeutics, Inc. and marketed in the United States by Lundbeck Inc. (until the end of 2010) was launched in May of 2009. Talecris’ ATIII product represented 92% of sales in the United States in 2009 and 6% of worldwide sales in 2008 according to MRB. Talecris’ Thrombate III product was produced for Talecris by Bayer pursuant to a manufacturing agreement. Talecris is currently validating a new production facility at its Clayton, North Carolina site with regulatory approval expected in early 2012. Talecris believes that it has a sufficient inventory of intermediates and finished product to meet demand until the new facility is approved. The new facility will increase Talecris’ capacity and will allow Talecris to increase supply. |
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Product Candidate | Therapeutic Area | Product Type | Use | Development Phase | ||||
Plasmin | Thrombolytic | Plasma-derived Plasmin | aPAO | Phase I completed | ||||
Plasmin | Thrombolytic | Plasma-derived Plasmin | Acute Ischemic Stroke | Proof-of-Concept Clinical Trial | ||||
recPlasmin | Thrombolytic | Recombinant Plasmin | Acute Ischemic Stroke | Preclinical | ||||
Prolastin-C A1PI | Respiratory | IVA1PI | A1PI deficiency | Phase IV Commitment | ||||
Recombinant FVIII | Coagulation | Intravenous | Hemophilia A | Preclinical | ||||
Recombinant A1PI | Respiratory | Intravenous and/or Aerosolized | A1PI deficiency, COPD, Cystic Fibrosis | Preclinical |
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• | troubleshooting production issues, especially relating to plasma pooling and fractionation, downstream protein purification processes and filling and freeze-drying operations; | |
• | providing technical expertise for evaluation and implementation of improvements to existing licensed processes, including driving process changes for improved quality and throughput, and leading process evaluations to mitigate potential failure modes; | |
• | tracking and trending of production operational parameters to identify opportunities that can improve gross margins; | |
• | supporting transfer of production processes into the manufacturing setting, evaluating commercial opportunities for existing production intermediates, and implementing lifecycle management programs. Examples include implementation of latex-free stoppers; Koate reliability, capacity and yield improvements and the new fractionation facility; and | |
• | supporting throughput capability increases by evaluation of new vendor pastes and plasma sources, such as the Canadian blood system plasma collection method conversion, and evaluation of recovered plasma sources. |
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Years Ended December 31, | ||||||||||||||||
(In thousands) | Six Months | |||||||||||||||
Ended | ||||||||||||||||
2009 | 2008 | 2007 | June 30, 2010 | |||||||||||||
United States | $ | 1,011,468 | $ | 906,376 | $ | 817,276 | $ | 536,896 | ||||||||
Canada | 214,883 | 215,964 | 189,923 | 96,537 | ||||||||||||
Europe | 185,297 | 168,081 | 136,972 | 94,647 | ||||||||||||
Other | 121,561 | 83,871 | 74,338 | 55,707 | ||||||||||||
Total net revenue | $ | 1,533,209 | $ | 1,374,292 | $ | 1,218,509 | $ | 783,787 | ||||||||
• | The Immunology/Neurology team is primarily focused on promoting Gamunex for the use in PI, CIDP and ITP. It is also responsible for promoting Talecris’ portfolio of hyperimmune products and Plasbumin. This team calls on office-based and hospital-based specialty physicians including neurologists and |
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immunologists. They also call on a variety of healthcare providers within the hospital and homecare settings (physicians, nurses, pharmacists). |
• | The Pulmonary team promotes Prolastin-C A1PI, focusing on identification of A1PI patients and driving brand choice for Prolastin-C A1PI, which is the most prescribed A1PI therapy in the United States. | |
• | The Hematology/Specialty team promotes Koate, Thrombate III and Talecris’ portfolio of hyperimmune products calling on hematologists and other healthcare providers within the hospital and specialty treatment centers. | |
• | In addition to Talecris’ direct sales force, Talecris has a managed-markets and national accounts sales team that manages relationships and contracting efforts with GPOs, distributors, home healthcare and specialty pharmacy providers and private commercial payors. | |
• | In addition to Talecris’ U.S. operations, Talecris has sales and marketing operations located in Germany and Canada, as well as a team dedicated to the development of other international markets. |
• | Clayton Site. A175-acre site that Talecris owns, located in Clayton, North Carolina, which includes a 14-building complex of office space, laboratory space, warehouse, freezer storage, and biopharmaceutical manufacturing facilities consisting of 654,139 square feet. An additional 37,000 square feet of administrative office and 23,600 square feet of warehouse space are leased through December 2019 in a building located adjacent to Talecris’ Clayton site. A 30,159 square foot climate-controlled warehouse located next to the Clayton site is also leased through September 2014. | |
• | Research Triangle Park. A leased three-building headquarters/administrative office facility consisting of 123,000 square feet. The main building housing Talecris’ corporate headquarters and additional space in two other buildings are leased through May 2022. An expansion covering 40,000 square feet of office space is also leased through May 2022. Talecris holds a five-year renewal option on the facility and a termination option exercisable effective in 2018. |
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• | Raleigh Test Lab. A laboratory space located in Raleigh, North Carolina consisting of 76,000 square feet leased through September 2017, with an option to purchase through September 2011. |
• | Melville Site. An11-acre site that Talecris owns, located in Melville, New York consisting of 102,922 square feet of office space, lab space, warehouse, and biopharmaceutical manufacturing facilities. | |
• | Research Triangle Park. An18-acre site that Talecris owns, located in Research Triangle Park, North Carolina, on which is located a R&D building, consisting of 25,000 square feet of office space and 45,000 square feet of laboratory facilities. | |
• | Benson Warehouse. A cold storage warehouse of 39,200 square feet used for plasma storage in Benson, North Carolina leased through December 2012. | |
• | Centennial Campus North Carolina State University. A combined office and laboratory space in Raleigh, North Carolina consisting of 21,364 square feet leased through December 2011. | |
• | Frankfurt. A 2,552 square-meters office facility located in Frankfurt, Germany, which serves as Talecris’ European headquarters and which is leased until June 30, 2015. | |
• | Canada. A 6,396 square-foot office facility located in Mississauga, Ontario, which serves as Talecris’ Canadian headquarters and which is leased until April 30, 2011. Talecris also leases a 2,356 square foot sales office in Ottawa, Ontario, which is leased until January 2011. | |
• | Plasma Collection Centers. As of July 1, 2010, Talecris operated 69 plasma collection centers of various sizes under non-cancelable lease agreements expiring at various dates. |
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Functional Area | Headcount | Core Responsibilities | ||||
Preclinical | 26 | Candidate identification, pre-clinical research, candidate advancement to development decision, candidate screening based on proof of principle or clear mechanism of action. | ||||
Administration | 11 | Office of the Executive Vice President, R&D, R&D Pre-Clinical and Clinical Compliance, and R&D facilities personnel. | ||||
Program Management Office | 7 | Oversight of the systems for and management of the execution of, strategic development projects for new products, new indications, and new processes. | ||||
Technology | 89 | Process development and improvement for plasma-based products (including technical support for operations), technology exploration, process/product development, and clinical manufacturing operations. | ||||
Pathogen safety | 35 | Exploration, introduction, validation of viral and prion detection and reduction technologies. | ||||
BioAnalytics | 64 | Exploration, implementation of new technologies for analytics, support of R&D functions, development of new and improved test methods for operations. | ||||
Medical Affairs | 56 | Continuing medical education, medical writing and publication, communicating medical information to health care providers. Trial design, execution, monitoring, data collection, analysis, report creation, regulatory agency interaction (supplemented by external contract research organizations). | ||||
NAT Development | 19 | To develop, validate, and support the operational setting of the Nucleic Acid Technology operational group located at Talecris’ Raleigh Test Lab, primarily serving manufacturing operations in the testing of all incoming plasma units for bloodborne pathogens. | ||||
Total | 307 |
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RESULTS OF OPERATIONS OF TALECRIS
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• | Total net revenue increased $36.4 million to $783.8 million for the six months ended June 30, 2010 as compared to $747.4 million for the six months ended June 30, 2009. | |
• | Gross margin was 43.8% and 42.0% for the six months ended June 30, 2010 and 2009, respectively. | |
• | Operating margin improved 210 basis points to 21.4% for the six months ended June 30, 2010 as compared to 19.3% for the six months ended June 30, 2009. | |
• | Net income was $93.0 million for the six months ended June 30, 2010, as compared to $116.7 million for the six months ended June 30, 2009. Diluted earnings per common share were $0.73 and $1.24 for the six months ended June 30, 2010 and 2009, respectively. Talecris’ 2009 results include the impact of the CSL merger termination fee of $75.0 million (approximately $48.8 million after tax) and transaction-related costs related to the terminated CSL merger agreement. Talecris’ 2010 results include transaction-related costs associated with the merger agreement with Grifols. Talecris believes a meaningful comparison of its results for the periods presented is enhanced by a quantified presentation of the impact of the CSL merger termination fee, CSL merger-related expenses and the Grifols transaction-related expenses. The impacts of these items on Talecris’ net income and diluted earnings per share are illustrated in the table below. |
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Diluted Earnings | ||||||||||||||||
Pre-Tax | Income Tax | Per Common | ||||||||||||||
Amount | Effect | Net Income | Share | |||||||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||
U.S. GAAP | $ | 144,376 | $ | (51,414 | ) | $ | 92,962 | $ | 0.73 | |||||||
Grifols merger-related expenses | 8,423 | (3,268 | ) | 5,155 | 0.04 | |||||||||||
Excluding merger-related items | $ | 152,799 | $ | (54,682 | ) | $ | 98,117 | $ | 0.77 | |||||||
Six Months Ended June 30, 2009 | ||||||||||||||||
U.S. GAAP | $ | 177,496 | $ | (60,789 | ) | $ | 116,707 | $ | 1.24 | |||||||
CSL merger termination fee | (75,000 | ) | 26,250 | (48,750 | ) | (0.52 | ) | |||||||||
CSL merger-related expenses | 12,754 | (4,949 | ) | 7,805 | 0.08 | |||||||||||
Excluding merger-related items | $ | 115,250 | $ | (39,488 | ) | $ | 75,762 | $ | 0.80 | |||||||
As adjusted for pro forma weighted average number of shares(1) | $ | 0.61 | ||||||||||||||
(1) | As discussed further in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris — Matters Affecting Comparability,” Talecris believes the comparability of its diluted earnings per share between the periods presented is enhanced by the use of an adjusted share base to reflect the impact for the issuance of common shares to convert Talecris’ Series A and B preferred stock, settle accrued dividends on the preferred stock, and complete Talecris’ IPO as if these events occurred at the beginning of 2009. |
• | Operating cash flows were $72.4 million and $130.9 million for the six months ended June 30, 2010 and 2009, respectively. Capital expenditures were $53.2 million and $23.7 million for the six months ended June 30, 2010 and 2009, respectively. Operating cash flows for the 2009 period included the impact of the CSL merger termination fee. |
• | Total net revenue increased 11.6% for the year ended December 31, 2009 to $1.533 billion as compared to $1.374 billion for the year ended December 31, 2008. | |
• | Gross margin improved 540 basis points to 41.2% for the year ended December 31, 2009 as compared to 35.8% for the year ended December 31, 2008. | |
• | Operating margin improved 320 basis points to 17.7% for the year ended December 31, 2009 as compared to 14.5% for the year ended December 31, 2008. | |
• | Net income, inclusive of the $48.8 million after-tax income from the CSL merger termination fee and the $26.3 million after-tax charges incurred as a result of Talecris’ refinancing transactions, increased 133.9% for the year ended December 31, 2009 to $153.9 million as compared to $65.8 million for the year ended December 31, 2008. | |
• | Diluted earnings per share, inclusive of the CSL merger termination fee and the charges related to Talecris’ refinancing transactions, were $1.50 for the year ended December 31, 2009 as compared to $0.71 for the year ended December 31, 2008. | |
• | Operating cash flows, inclusive of the CSL merger termination fee and the charges related to Talecris’ refinancing transactions, were $234.2 million for the year ended December 31, 2009, reflecting an improvement of $201.1 million over 2008. |
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Diluted | ||||||||||||||||
Earnings | ||||||||||||||||
Income Tax | per | |||||||||||||||
Pre-Tax | Expense | Common | ||||||||||||||
Amount | (Benefit) | Net Income | Share | |||||||||||||
U.S. GAAP | $ | 228,897 | $ | 75,008 | $ | 153,889 | $ | 1.50 | ||||||||
Less specific items: | ||||||||||||||||
CSL Merger termination fee | (75,000 | ) | 26,250 | (48,750 | ) | (0.48 | ) | |||||||||
Write off of deferred debt issuance costs | 12,141 | (4,711 | ) | 7,430 | 0.07 | |||||||||||
Loss on extinguishment of interest rate swap contracts | 30,892 | (11,986 | ) | 18,906 | 0.19 | |||||||||||
Excluding specific items | $ | 196,930 | $ | 84,561 | $ | 131,475 | $ | 1.28 | ||||||||
• | On October 6, 2009, Talecris completed its initial public offering (IPO) of 56,000,000 shares of its common stock at an offering price of $19.00 per share for an aggregate offering of $1.064 billion. Talecris received net proceeds of $519.7 million from the issuance of 28,947,368 new shares of common stock. These proceeds were used to repay principal under Talecris’ then existing First and Second Lien Term Loans. Talecris did not receive any proceeds from the selling stockholders’ sale of 27,052,632 shares of common stock in the offering. | |
• | On October 15, 2009, Talecris amended certain provisions under its revolving credit facility, including increasing its capital expenditure baskets so that it will be permitted to make capital expenditures of up to $225 million in each of 2010 and 2011. Additionally, the amendment provided that the capital expenditure covenant is not applicable as long as Talecris’ leverage ratio is less than or equal to 2.00 to 1.00. The amendment also provides that Talecris will maintain minimum availability of $48.75 million. | |
• | In October 2009, Talecris’ corporate family credit ratings were increased to BB (Stable Outlook) by Standard and Poor’s and to Ba3 (Stable Outlook) by Moody’s Investor Services. | |
• | On October 21, 2009, Talecris completed the issuance of $600.0 million of the 7.75% Notes at a price of 99.321% of par, in a private placement to certain qualified institutional buyers. Talecris used the net proceeds to it of $583.9 million to repay principal and interest amounts of $499.6 million under its First and Second Lien Term Loans, which were subsequently terminated, $55.6 million to repay principal under its revolving credit facility, and $28.7 million to settle and terminate certain interest rate swap contracts with a notional amount of $390.0 million. Talecris also expensed the remaining balance of $12.1 million in deferred financing charges related to the First and Second Lien Term Loans. Subsequently, Talecris settled and terminated its remaining interest rate swap contract with a notional amount of $50.0 million for $6.1 million. On July 19, 2010, Talecris exchanged all of the then outstanding 7.75% Notes for similar 7.75% Notes that have been registered under the Securities Act of 1933, as amended. This exchange did not impact Talecris’ capitalization. | |
• | As of December 31, 2009, Talecris Holdings held approximately 50.1% of Talecris’ outstanding common stock. Subsequent to December 31, 2009, the ownership of Talecris’ outstanding common stock by Talecris Holdings was diluted below 50% as a result of the exercise of employee stock options. As of June 30, 2010, Talecris Holdings owned approximately 49.7% of Talecris’ outstanding common stock. Talecris Holdings is owned by (i) Cerberus-Plasma Holdings LLC, the managing member of which is Cerberus Partners, L.P., |
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and (ii) limited partnerships affiliated with Ampersand Ventures. Substantially all rights of management and control of Talecris Holdings are held by Cerberus-Plasma Holdings LLC. |
• | On June 6, 2010, Talecris entered into a definitive merger agreement with Grifols under which Grifols will acquire, through merger transactions, all of the Talecris common stock for a combination of $19.00 in cash and 0.641 of a Grifols non-voting share for each outstanding share of Talecris common stock. | |
• | On May 24, 2010, Talecris’ common stock (NASDAQ: TLCR) was added to the NASDAQ Biotechnology Index (NASDAQ: NBI). The Index is designed to track the performance of a set of NASDAQ listed securities that are classified as either biotechnology or pharmaceutical according to the Industry Classification Benchmark. | |
• | On May 13, 2010, Talecris received approval from Health Canada to launch Gamunex for subcutaneous administration in Canada, giving Gamunex the broadest set of indications of any approved subcutaneous product in Canada. Talecris anticipates launching subcutaneous administration in Canada in the second half of 2010. | |
• | During the first quarter of 2010, Talecris received approval to proceed with the proof of concept trial for plasma-derived Plasmin to treat ischemic stroke in six countries outside of the United States. | |
• | In March 2010, Talecris began construction of its new fractionation facility located in Clayton, North Carolina. The new fractionation facility, which is expected to be operational in 2015, will have the capacity to fractionate 6.0 million liters of human plasma annually. | |
• | In February 2010, Talecris was granted orphan drug designation by the U.S. Food and Drug Administration (FDA) for the development of an aerosol formulation of A1PI to treat congenital alpha-1 antitrypsin (AAT) deficiency. AAT deficiency is a chronic, hereditary condition that increases the risk of certain diseases, particularly emphysema. Currently, there are no approved, inhaled treatments available for the treatment of AAT. Talecris received a similar orphan drug designation for the aerosolized form of A1PI from the European Commission in June of 2008. Talecris has decided not to initiate an aerosol trial with plasma-derived Prolastin-C A1PI. | |
• | During the fourth quarter of 2009, Talecris completed the acquisition of the remaining two plasma collection centers under Talecris’ center development agreement with IBR, completing a significant milestone in Talecris’ plasma platform development, which began in 2006. | |
• | In October 2009, Talecris received U.S. FDA approval for its next generation A1PI product, Prolastin-C A1PI. A post-approval clinical trial was required as a condition for approval. Talecris also submitted a supplemental New Drug Submission (sNDS) to Health Canada for the approval of Prolastin-C A1PI in March 2009 and Prolastin-C A1PI was approved for use in Canada in February 2010. Presently, additional clinical trials are being required by European authorities as a precursor to Prolastin-C A1PI approval in Europe. Prolastin-C A1PI is a new concentrated version of Talecris’ Prolastin A1PI product, which has improved yields and higher concentration. As a result, the infusion time for patients will be significantly reduced. The manufacturing process for Prolastin-C A1PI incorporates technological advances such as nanofiltration, a virus exclusion technology, and cation exchange chromatography, an additional purification step. The manufacturing technological advances contributed to a yield improvement of approximately 40%. In March 2010, Talecris launched Prolastin-C A1PI in the United States, which has essentially been completed and Talecris will launch Prolastin-C A1PI in Canada in the 2010 third quarter. | |
• | In June 2009, Talecris and CSL agreed to terminate the definitive merger agreement entered into on August 12, 2008, under which CSL agreed to acquire Talecris for cash consideration of $3.1 billion, less net debt, as defined. The closing of the transaction was subject to the receipt of certain regulatory approvals as well as other customary conditions. The U.S. Federal Trade Commission filed an administrative complaint before the Commission challenging the CSL merger and a complaint in Federal district court seeking to enjoin the CSL merger during the administrative process. CSL paid Talecris a merger termination fee of $75.0 million (after tax amount of $48.8 million), which is included as other non-operating income in |
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Talecris’ consolidated income statement for the year ended December 31, 2009. The U.S. Federal Trade Commission’s complaints were subsequently dismissed. |
• | In June 2009, the Paul-Ehrlich Institute approved the inclusion of chronic inflammatory demyelinating polyneuropathy (CIDP) as a new indication for Talecris’ Gamunex IVIG product. According to European Union regulations, this approval has been agreed upon by all of the Concerned Member States through a Mutual Recognition Procedure (MRP), resulting in approval of the CIDP indication in 16 European countries. Talecris began CIDP marketing activities in two European countries in 2009 and Talecris expects to launch marketing activities in an additional three European countries in 2010. |
• | In March 2009, Talecris was granted orphan drug designation by the U.S. FDA for the development of Plasmin (Human) to treat acute peripheral arterial occlusion (aPAO), a condition in which arterial blood flow to the extremities, usually the legs, is blocked by a clot. During the first quarter of 2010, Talecris completed its Phase I clinical trial related to its investigation of Direct Acting Thrombolytic (DAT) Plasmin to assess its ability to treat aPAO. Talecris is currently finalizing the design of its Phase II clinical trial, which it plans to initiate in the second half of 2010 in several countries outside of the United States. In October 2009, Talecris received approval from the Paul-Ehrlich Institute to proceed with a proof of concept trial for Plasmin to treat ischemic stroke in Germany, adding to its approval in Australia, Canada, France, Spain and the United Kingdom. |
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Six Months Ended June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Life Cycle Management | ||||||||||||||||||||
Gamunex IVIG CIDP | $ | — | $ | 100 | $ | 200 | $ | 600 | $ | 1,100 | ||||||||||
Prolastin-C A1PI | $ | 750 | $ | 1,500 | $ | 2,200 | $ | 3,900 | $ | 6,500 | ||||||||||
Prolastin Alpha-1 Aerosol | $ | 1,800 | $ | 4,900 | $ | 8,900 | $ | 6,100 | $ | 5,700 | ||||||||||
Gamunex subcutaneous administration | $ | 200 | $ | 500 | $ | 1,400 | $ | 3,300 | $ | 5,700 | ||||||||||
New Product Candidates | ||||||||||||||||||||
Plasmin and recombinant Plasmin | $ | 12,000 | $ | 10,400 | $ | 25,500 | $ | 18,500 | $ | 13,200 | ||||||||||
Other recombinant product candidates | $ | 4,400 | $ | 2,000 | $ | 4,700 | $ | 4,000 | $ | — |
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Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Gross product revenue | $ | 815,995 | $ | 776,004 | $ | 1,593,995 | $ | 1,389,542 | $ | 1,251,879 | ||||||||||
Chargebacks | (14,314 | ) | (10,679 | ) | (24,380 | ) | (13,927 | ) | (13,268 | ) | ||||||||||
Cash discounts | (9,968 | ) | (9,100 | ) | (18,710 | ) | (15,147 | ) | (12,918 | ) | ||||||||||
Rebates and other | (19,626 | ) | (21,089 | ) | (42,397 | ) | (24,008 | ) | (26,719 | ) | ||||||||||
SG&A reimbursements | (370 | ) | (157 | ) | (754 | ) | (1,910 | ) | (2,288 | ) | ||||||||||
Product net revenue | $ | 771,717 | $ | 734,979 | $ | 1,507,754 | $ | 1,334,550 | $ | 1,196,686 | ||||||||||
Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Gross product revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
Chargebacks | (1.8 | )% | (1.4 | )% | (1.5 | )% | (1.0 | )% | (1.1 | )% | ||||||||||
Cash discounts | (1.2 | )% | (1.2 | )% | (1.2 | )% | (1.1 | )% | (1.0 | )% | ||||||||||
Rebates and other | (2.4 | )% | (2.7 | )% | (2.7 | )% | (1.7 | )% | (2.1 | )% | ||||||||||
SG&A reimbursements | — | — | — | (0.1 | ) | (0.2 | )% | |||||||||||||
Product net revenue | 94.6 | % | 94.7 | % | 94.6 | % | 96.1 | % | 95.6 | % | ||||||||||
Cash | Rebates and | |||||||||||||||
Chargebacks | Discounts | Other | Total | |||||||||||||
Balance at December 31, 2006 | $ | 1,871 | $ | 970 | $ | 6,931 | $ | 9,772 | ||||||||
Provisions | 13,268 | 12,918 | 26,719 | 52,905 | ||||||||||||
Credits issued | (12,451 | ) | (12,814 | ) | (22,218 | ) | (47,483 | ) | ||||||||
Balance at December 31, 2007 | 2,688 | 1,074 | 11,432 | 15,194 | ||||||||||||
Provisions | 13,927 | 15,147 | 24,008 | 53,082 | ||||||||||||
Credits issued | (12,752 | ) | (14,727 | ) | (23,029 | ) | (50,508 | ) | ||||||||
Balance at December 31, 2008 | 3,863 | 1,494 | 12,411 | 17,768 | ||||||||||||
Provisions | 24,380 | 18,710 | 42,397 | 85,487 | ||||||||||||
Credits issued | (23,981 | ) | (18,930 | ) | (28,381 | ) | (71,292 | ) | ||||||||
Balance at December 31, 2009 | 4,262 | 1,274 | 26,427 | 31,963 | ||||||||||||
Provisions | 14,314 | 9,968 | 19,626 | 43,908 | ||||||||||||
Credits issued | (14,114 | ) | (9,441 | ) | (17,334 | ) | (40,889 | ) | ||||||||
Balance at June 30, 2010 | $ | 4,462 | $ | 1,801 | $ | 28,719 | $ | 34,982 | ||||||||
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• | At June 30, 2010: ASD Specialty Care — 13.1%; FFF Enterprise, Inc. — 12.9% | |
• | At December 31, 2009: FFF Enterprise, Inc. — 14.6% | |
• | At December 31, 2008: FFF Enterprise, Inc. — 15.0%; ASD Specialty Care — 14.0% |
Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
FFF Enterprise Inc. | 14.9 | % | 14.2 | % | 14.4 | % | 12.8 | % | 18.2 | % | ||||||||||
AmeriSource Bergen | 13.0 | % | 13.1 | % | 12.3 | % | 12.0 | % | 14.9 | % | ||||||||||
Canadian Blood Services | NA | NA | NA | 10.6 | % | 10.5 | % |
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December 31, | 2009 Net | October 6, 2009 | October 21, 2009 | December 31, | ||||||||||||||||||||
2008 | Repayments | IPO | Refinancing | Accretion | 2009 | |||||||||||||||||||
Revolving Credit Facility | $ | 179,941 | $ | (124,348 | ) | $ | — | $ | (55,593 | ) | $ | — | $ | — | ||||||||||
First Lien Term Loan | 686,000 | (5,250 | ) | (389,812 | ) | (290,938 | ) | — | — | |||||||||||||||
Second Lien Term Loan | 330,000 | — | (129,937 | ) | (200,063 | ) | — | — | ||||||||||||||||
7.75% Notes | — | — | — | 600,000 | — | 600,000 | ||||||||||||||||||
Discount on 7.75% Notes | — | — | — | (4,074 | ) | 120 | (3,954 | ) | ||||||||||||||||
Total indebtedness | $ | 1,195,941 | $ | (129,598 | ) | $ | (519,749 | ) | $ | 49,332 | $ | 120 | $ | 596,046 | ||||||||||
Newly | ||||||||||||||||||||
Capitalized | ||||||||||||||||||||
December 31, | Debt Issuance | December 31, | ||||||||||||||||||
2008 | Charges | Costs | Amortization | 2009 | ||||||||||||||||
Revolving Credit Facility | $ | 3,014 | $ | — | $ | 1,545 | $ | (1,041 | ) | $ | 3,518 | |||||||||
First Lien Term Loan | 9,629 | (8,054 | ) | — | (1,575 | ) | — | |||||||||||||
Second Lien Term Loan | 4,744 | (4,087 | ) | — | (657 | ) | — | |||||||||||||
7.75% Notes | — | — | 13,334 | (392 | ) | 12,942 | ||||||||||||||
Total deferred debt issuance costs | $ | 17,387 | $ | (12,141 | ) | $ | 14,879 | $ | (3,665 | ) | $ | 16,460 | ||||||||
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Six Months Ended June 30, | Year Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
Actual | Actual | Pro Forma | Actual | Pro Forma | ||||||||||||||||
Net income | $ | 92,962 | $ | 116,707 | $ | 116,707 | $ | 153,889 | $ | 153,889 | ||||||||||
Interest expense reduction due to debt repayment | — | — | 3,867 | — | 5,555 | |||||||||||||||
Numerator | $ | 92,962 | $ | 116,707 | $ | 120,574 | $ | 153,889 | $ | 159,444 | ||||||||||
Weighted average common shares outstanding | 122,162,276 | 1,428,408 | 1,428,408 | 31,166,613 | 31,166,613 | |||||||||||||||
Adjustments: | ||||||||||||||||||||
Stock options and restricted shares | 5,666,813 | 6,588,232 | 6,588,232 | 7,374,601 | 7,374,601 | |||||||||||||||
Series A preferred stock | — | 72,000,000 | 72,000,000 | 53,654,795 | 53,654,795 | |||||||||||||||
Series B preferred stock | — | 13,846,320 | 13,846,320 | 10,318,354 | 10,318,354 | |||||||||||||||
Shares issued for preferred stock dividend | — | — | 2,381,548 | — | 1,774,743 | |||||||||||||||
Newly issued shares for IPO | — | — | 28,947,368 | — | 22,047,585 | |||||||||||||||
Dilutive potential common shares | 127,829,089 | 93,862,960 | 125,191,876 | 102,514,363 | 126,336,691 | |||||||||||||||
Diluted net income per common share | $ | 0.73 | $ | 1.24 | $ | 0.96 | $ | 1.50 | $ | 1.26 | ||||||||||
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Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
SG&A | $ | 7,950 | $ | 16,450 | $ | 40,968 | $ | 33,780 | $ | 18,612 | ||||||||||
R&D | 715 | 1,179 | 2,303 | 2,361 | 1,396 | |||||||||||||||
Total operating expenses | 8,665 | 17,629 | 43,271 | 36,141 | 20,008 | |||||||||||||||
Cost of goods sold | 1,919 | 2,542 | 4,275 | 2,566 | 1,233 | |||||||||||||||
Total expense | $ | 10,584 | $ | 20,171 | $ | 47,546 | $ | 38,707 | $ | 21,241 | ||||||||||
• | The decrease in share-based compensation expense during 2010 was primarily driven by the final vesting of awards under the 2005 Stock Option and Incentive Plan on April 1, 2010 and the majority of the awards under Talecris’ 2006 Restricted Stock Plan on March 31, 2010. In addition, a combination of an adjustment during the 2010 first quarter as a result of actual award forfeitures being higher than initially estimated as well as the acceleration of certain option awards to Talecris’ Chairman and Chief Executive Officer during the 2009 third quarter (discussed further below) further impacted the comparability of share-based compensation expense between the periods presented. | |
• | During the third quarter of 2009, Talecris entered into an amended and restated employment agreement with its Chairman and Chief Executive Officer which included accelerating the vesting of options to purchase 1,008,000 shares of Talecris common stock at an exercise price of $21.25 per common share to August 19, 2009. The acceleration of these options resulted in the recognition of a non-cash charge of $11.8 million of compensation expense during 2009. Options to purchase these shares were previously scheduled to vest in April of 2010 (504,000 options) and April 2011 (504,000 options). | |
• | During the second quarter of 2008, the compensation committee of the Talecris Board of Directors amended the exercise price of 570,400 stock options outstanding to certain employees from $21.25 per share to $11.00 per share and also amended the exercise price of 17,152 stock options outstanding to certain members of the Talecris Board of Directors from $21.25 per share to $11.00 per share. The stock options that were re-priced were granted during 2007. | |
• | During the first quarter of 2008, the Talecris Board of Directors revised the 2008 corporate objectives related to the performance-based component of stock options scheduled to vest on April 1, 2009. In addition, during the second quarter of 2008, Talecris began recognizing compensation cost related to the performance-based component of stock options scheduled to vest on April 1, 2010 based on its probability assessment of achieving the related performance objectives. | |
• | During the third quarter of 2007, the compensation committee of the Talecris Board of Directors approved an amendment to Talecris’ then existing 2005 Stock Option and Incentive Plan in which the percentage of options vesting based on performance targets was changed from 65% to 35% and the percentage of options vesting based on service was changed from 35% to 65% for options scheduled to vest on April 1, 2009 and 2010. | |
• | During the third quarter of 2007, the compensation committee of the Talecris Board of Directors approved the 2008 and 2009 corporate objectives related to the performance-based component of stock options scheduled to vest on April 1, 2009 and 2010. The objectives related to the performance-based component of |
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the stock options scheduled to vest on April 1, 2009 were subsequently modified during the first quarter of 2008 as indicated above. |
• | During the first quarter of 2007, the compensation committee of the Talecris Board of Directors approved the 2007 corporate objectives related to the performance-based component of the stock options scheduled to vest on April 1, 2008. |
Weighted- | ||||||||
Unrecognized | Average | |||||||
Compensation | Period | |||||||
Cost | (Years) | |||||||
Stock options | $ | 4,819 | 2.60 | |||||
Restricted share awards | 3,244 | 0.75 | ||||||
RSUs | 7,302 | 2.66 | ||||||
Performance share awards | 4,248 | 2.76 | ||||||
Total | $ | 19,613 | ||||||
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Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Net revenue: | ||||||||||||||||||||
Product | $ | 771,717 | $ | 734,979 | $ | 1,507,754 | $ | 1,334,550 | $ | 1,196,686 | ||||||||||
Other | 12,070 | 12,386 | 25,455 | 39,742 | 21,823 | |||||||||||||||
Total | 783,787 | 747,365 | 1,533,209 | 1,374,292 | 1,218,509 | |||||||||||||||
Cost of goods sold | 440,568 | 433,209 | 901,077 | 882,157 | 788,152 | |||||||||||||||
Gross profit | 343,219 | 314,156 | 632,132 | 492,135 | 430,357 | |||||||||||||||
Operating expenses: | ||||||||||||||||||||
SG&A | 143,624 | 134,425 | 289,929 | 227,524 | 189,387 | |||||||||||||||
R&D | 32,159 | 35,561 | 71,223 | 66,006 | 61,336 | |||||||||||||||
Total | 175,783 | 169,986 | 361,152 | 293,530 | 250,723 | |||||||||||||||
Income from operations | 167,436 | 144,170 | 270,980 | 198,605 | 179,634 | |||||||||||||||
Other non-operating (expense) income: | ||||||||||||||||||||
Interest expense, net | (23,386 | ) | (41,858 | ) | (74,491 | ) | (96,640 | ) | (110,236 | ) | ||||||||||
Merger termination fee | — | 75,000 | 75,000 | — | — | |||||||||||||||
Loss on extinguishment of debt | (43,033 | ) | — | — | ||||||||||||||||
Equity in earnings of affiliate | 326 | 184 | 441 | 426 | 436 | |||||||||||||||
Litigation settlement | — | — | 12,937 | |||||||||||||||||
Total | (23,060 | ) | 33,326 | (42,083 | ) | (96,214 | ) | (96,863 | ) | |||||||||||
Income before income taxes | 144,376 | 177,496 | 228,897 | 102,391 | 82,771 | |||||||||||||||
(Provision) benefit for income taxes | (51,414 | ) | (60,789 | ) | (75,008 | ) | (36,594 | ) | 40,794 | |||||||||||
Net income | $ | 92,962 | $ | 116,707 | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 0.76 | $ | 76.29 | $ | 4.56 | $ | 39.01 | $ | 65.58 | ||||||||||
Diluted | $ | 0.73 | $ | 1.24 | $ | 1.50 | $ | 0.71 | $ | 1.36 | ||||||||||
Financial measures: | ||||||||||||||||||||
Gross margin | 43.8 | % | 42.0 | % | 41.2 | % | 35.8 | % | 35.3 | % | ||||||||||
Operating margin | 21.4 | % | 19.3 | % | 17.7 | % | 14.5 | % | 14.7 | % | ||||||||||
Effective income tax rate | 35.6 | % | 34.2 | % | 32.8 | % | 35.7 | % | (49.3 | )% |
• | Product net revenue — Talecris’ product net revenue is presented net of allowances for estimated discounts, rebates, administrative fees, chargebacks and sales allowances. Talecris’ product net revenue is also presented net of SG&A reimbursements to certain international distributors. | |
• | Other net revenue — Talecris’ other net revenue primarily consists of royalties under its collaborative agreements, fees related to its settlement with Baxter, milestone revenues and revenue associated with other third-party contract services agreements at its Melville, New York facility. | |
• | Cost of goods sold — Talecris’ cost of goods sold includes material costs for the products it sells, which primarily consists of plasma and other costs associated with the manufacturing process, such as personnel costs, utilities, consumables and overhead. In addition, Talecris’ cost of goods sold includes packaging and |
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distribution costs. The most significant component of Talecris’ cost of goods sold is plasma, which is the common raw material for Talecris’ primary products. Due to Talecris’ long manufacturing cycle times, which range from 100 days to in excess of 400 days for some specialty plasma in addition to a required 60 day pre-production holding period for plasma, the cost of plasma is not expensed through cost of goods sold until a significant period of time subsequent to its acquisition. |
• | Gross profit — Talecris’ gross profit is impacted by the volume and pricing of its finished products, its raw material costs, production mix, yield, and cycle times, as well as its production capacities and normal production shut-downs, and the timing and amount of release of finished product. Talecris’ profitability is significantly impacted by the efficiency of Talecris’ utilization of plasma including, but not limited to, the production yields Talecris obtains, the product reject rates that Talecris experiences and the product through-put that Talecris achieves. | |
• | SG&A — Talecris’ SG&A consists primarily of salaries and related employee benefit costs for personnel in executive, sales and marketing, finance, legal, information technology, human resources and other administrative functions, as well as fees for professional services, facilities costs and other general and administrative costs. | |
• | R&D — Talecris’ R&D includes the costs directly attributable to the conduct of research and development programs for new products and life cycle management. Such costs include salaries and related employee benefit costs; materials (including the material required for clinical trials); supplies; depreciation on and maintenance of R&D equipment; various services provided by outside contractors related to clinical development, trials and regulatory services; and the allocable portion of facility costs such as rent, depreciation, utilities, insurance and general support services. R&D expenses are influenced by the number and timing of in-process projects and the nature of expenses associated with these projects. | |
• | Interest expense, net — Talecris’ interest expense, net, consists of interest expense incurred on outstanding debt and derivative financial instruments and amortization of debt issuance costs and debt discount, offset by interest income and capitalized interest associated with the construction of plant and equipment. | |
• | Income tax (provision) benefit — Talecris’ income tax (provision) benefit includes United States Federal, state, local, and foreign income taxes, and is based on reported pre-tax income. |
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Six Months Ended | ||||||||||||||||
June 30, | Change | |||||||||||||||
2010 | 2009 | $ | % | |||||||||||||
Net revenue: | ||||||||||||||||
Product | $ | 771,717 | $ | 734,979 | $ | 36,738 | 5.0 | % | ||||||||
Other | 12,070 | 12,386 | (316 | ) | (2.6 | )% | ||||||||||
Total | 783,787 | 747,365 | 36,422 | 4.9 | % | |||||||||||
Cost of goods sold | 440,568 | 433,209 | (7,359 | ) | (1.7 | )% | ||||||||||
Gross profit | 343,219 | 314,156 | 29,063 | 9.3 | % | |||||||||||
Operating expenses: | ||||||||||||||||
SG&A | 143,624 | 134,425 | (9,199 | ) | (6.8 | )% | ||||||||||
R&D | 32,159 | 35,561 | 3,402 | 9.6 | % | |||||||||||
Total | 175,783 | 169,986 | (5,797 | ) | (3.4 | )% | ||||||||||
Income from operations | 167,436 | 144,170 | 23,266 | 16.1 | % | |||||||||||
Other non-operating (expense) income: | ||||||||||||||||
Interest expense, net | (23,386 | ) | (41,858 | ) | 18,472 | 44.1 | % | |||||||||
Merger termination fee | — | 75,000 | (75,000 | ) | 100.0 | % | ||||||||||
Equity in earnings of affiliate | 326 | 184 | 142 | 77.2 | % | |||||||||||
Total | (23,060 | ) | 33,326 | (56,386 | ) | 169.2 | % | |||||||||
Income before income taxes | 144,376 | 177,496 | (33,120 | ) | (18.7 | )% | ||||||||||
Provision for income taxes | (51,414 | ) | (60,789 | ) | 9,375 | 15.4 | % | |||||||||
Net income | $ | 92,962 | $ | 116,707 | $ | (23,745 | ) | (20.3 | )% | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.76 | $ | 76.29 | $ | (75.53 | ) | (99.0 | )% | |||||||
Diluted | $ | 0.73 | $ | 1.24 | $ | (0.51 | ) | (41.1 | )% | |||||||
Financial measures: | ||||||||||||||||
Gross profit margin | 43.8 | % | 42.0 | % | ||||||||||||
Operating margin | 21.4 | % | 19.3 | % | ||||||||||||
Effective income tax rate | 35.6 | % | 34.2 | % |
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Six Months Ended | ||||||||||||||||
June 30, | Change | |||||||||||||||
2010 | 2009 | $ | % | |||||||||||||
Product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 426,719 | $ | 411,458 | $ | 15,261 | 3.7 | % | ||||||||
Prolastin-C A1PI/Prolastin A1PI | 168,169 | 149,380 | 18,789 | 12.6 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 44,353 | 38,429 | 5,924 | 15.4 | % | |||||||||||
Factor VIII (Koate DVI) | 23,816 | 20,177 | 3,639 | 18.0 | % | |||||||||||
Hyperimmunes | 33,799 | 37,602 | (3,803 | ) | (10.1 | )% | ||||||||||
Other | 74,861 | 77,933 | (3,072 | ) | (3.9 | )% | ||||||||||
Total product net revenue | 771,717 | 734,979 | 36,738 | 5.0 | % | |||||||||||
Other net revenue | 12,070 | 12,386 | (316 | ) | (2.6 | )% | ||||||||||
Total net revenue | $ | 783,787 | $ | 747,365 | $ | 36,422 | 4.9 | % | ||||||||
Six Months Ended | ||||||||||||||||
June 30, | Change | |||||||||||||||
2010 | 2009 | $ | % | |||||||||||||
U.S. product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 324,832 | $ | 299,720 | $ | 25,112 | 8.4 | % | ||||||||
Prolastin-C A1PI/Prolastin A1PI | 108,269 | 98,927 | 9,342 | 9.4 | % | |||||||||||
Factor V (Albumin and Plasmanate) | 27,055 | 21,316 | 5,739 | 26.9 | % | |||||||||||
Factor VIII (Koate DVI) | 8,211 | 5,658 | 2,553 | 45.1 | % | |||||||||||
Hyperimmunes | 24,027 | 28,700 | (4,673 | ) | (16.3 | )% | ||||||||||
Other product net revenue | 33,405 | 31,530 | 1,875 | 5.9 | % | |||||||||||
Total U.S. product net revenue | $ | 525,799 | $ | 485,851 | $ | 39,948 | 8.2 | % | ||||||||
International product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 101,887 | $ | 111,738 | $ | (9,851 | ) | (8.8 | )% | |||||||
Prolastin-C A1PI/Prolastin A1PI | 59,900 | 50,453 | 9,447 | 18.7 | % | |||||||||||
Factor V (Albumin and Plasmanate) | 17,298 | 17,113 | 185 | 1.1 | % | |||||||||||
Factor VIII (Koate DVI) | 15,605 | 14,519 | 1,086 | 7.5 | % | |||||||||||
Hyperimmunes | 9,772 | 8,902 | 870 | 9.8 | % | |||||||||||
Other product net revenue | 41,456 | 46,403 | (4,947 | ) | (10.7 | )% | ||||||||||
Total international product net revenue | $ | 245,918 | $ | 249,128 | $ | (3,210 | ) | (1.3 | )% | |||||||
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Years Ended December 31, | Change | |||||||||||||||
2009 | 2008 | $ | % | |||||||||||||
Net revenue: | ||||||||||||||||
Product | $ | 1,507,754 | $ | 1,334,550 | $ | 173,204 | 13.0 | % | ||||||||
Other | 25,455 | 39,742 | (14,287 | ) | (35.9 | )% | ||||||||||
Total | 1,533,209 | 1,374,292 | 158,917 | 11.6 | % | |||||||||||
Cost of goods sold | 901,077 | 882,157 | (18,920 | ) | (2.1 | )% | ||||||||||
Gross profit | 632,132 | 492,135 | 139,997 | 28.4 | % | |||||||||||
Operating expenses: | ||||||||||||||||
SG&A | 289,929 | 227,524 | (62,405 | ) | (27.4 | )% | ||||||||||
R&D | 71,223 | 66,006 | (5,217 | ) | (7.9 | )% | ||||||||||
Total | 361,152 | 293,530 | (67,622 | ) | (23.0 | )% | ||||||||||
Income from operations | 270,980 | 198,605 | 72,375 | 36.4 | % | |||||||||||
Other non-operating (expense) income: | ||||||||||||||||
Interest expense, net | (74,491 | ) | (96,640 | ) | 22,149 | 22.9 | % | |||||||||
CSL merger termination fee | 75,000 | — | 75,000 | nm | ||||||||||||
Loss on extinguishment of debt | (43,033 | ) | — | (43,033 | ) | nm | ||||||||||
Equity in earnings of affiliate | 441 | 426 | 15 | 3.5 | % | |||||||||||
Total | (42,083 | ) | (96,214 | ) | 54,131 | 56.3 | % | |||||||||
Income before income taxes | 228,897 | 102,391 | 126,506 | 123.6 | % | |||||||||||
Provision for income taxes | (75,008 | ) | (36,594 | ) | (38,414 | ) | (105.0 | )% | ||||||||
Net income | $ | 153,889 | $ | 65,797 | $ | 88,092 | 133.9 | % | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 4.56 | $ | 39.01 | $ | (34.45 | ) | (88.3 | )% | |||||||
Diluted | $ | 1.50 | $ | 0.71 | $ | 0.79 | 111.3 | % | ||||||||
Financial measures: | ||||||||||||||||
Gross profit margin | 41.2 | % | 35.8 | % | ||||||||||||
Operating margin | 17.7 | % | 14.5 | % | ||||||||||||
Effective income tax rate | 32.8 | % | 35.7 | % |
nm | - not meaningful |
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Years Ended December 31, | Change | |||||||||||||||
2009 | 2008 | $ | % | |||||||||||||
Product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 826,376 | $ | 677,737 | $ | 148,639 | 21.9 | % | ||||||||
Prolastin A1PI | 319,080 | 316,495 | 2,585 | 0.8 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 84,770 | 61,075 | 23,695 | 38.8 | % | |||||||||||
Fraction VIII (Koate DVI) | 46,453 | 40,247 | 6,206 | 15.4 | % | |||||||||||
Hyperimmunes | 74,203 | 78,178 | (3,975 | ) | (5.1 | )% | ||||||||||
Other | 156,872 | 160,818 | (3,946 | ) | (2.5 | )% | ||||||||||
Total product net revenue | 1,507,754 | 1,334,550 | 173,204 | 13.0 | % | |||||||||||
Other net revenue | 25,455 | 39,742 | (14,287 | ) | (35.9 | )% | ||||||||||
Total net revenue | $ | 1,533,209 | $ | 1,374,292 | $ | 158,917 | 11.6 | % | ||||||||
Years Ended December 31, | Change | |||||||||||||||
2009 | 2008 | $ | % | |||||||||||||
U.S. product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 599,758 | $ | 479,895 | $ | 119,863 | 25.0 | % | ||||||||
Prolastin A1PI | 206,099 | 202,678 | 3,421 | 1.7 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 44,768 | 38,701 | 6,067 | 15.7 | % | |||||||||||
Fraction VIII (Koate DVI) | 13,601 | 8,574 | 5,027 | 58.6 | % | |||||||||||
Hyperimmunes | 59,500 | 60,707 | (1,207 | ) | (2.0 | )% | ||||||||||
Other | 64,404 | 77,378 | (12,974 | ) | (16.8 | )% | ||||||||||
Total U.S. product net revenue | $ | 988,130 | $ | 867,933 | $ | 120,197 | 13.8 | % | ||||||||
International product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 226,618 | $ | 197,842 | $ | 28,776 | 14.5 | % | ||||||||
Prolastin A1PI | 112,981 | 113,817 | (836 | ) | (0.7 | )% | ||||||||||
Fraction V (Albumin and Plasmanate) | 40,002 | 22,374 | 17,628 | 78.8 | % | |||||||||||
Fraction VIII (Koate DVI) | 32,852 | 31,673 | 1,179 | 3.7 | % | |||||||||||
Hyperimmunes | 14,703 | 17,471 | (2,768 | ) | (15.8 | )% | ||||||||||
Other | 92,468 | 83,440 | 9,028 | 10.8 | % | |||||||||||
Total international product net revenue | $ | 519,624 | $ | 466,617 | $ | 53,007 | 11.4 | % | ||||||||
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Years Ended December 31, | Change | |||||||||||||||
2008 | 2007 | $ | % | |||||||||||||
Net revenue: | ||||||||||||||||
Product | $ | 1,334,550 | $ | 1,196,686 | $ | 137,864 | 11.5 | % | ||||||||
Other | 39,742 | 21,823 | 17,919 | 82.1 | % | |||||||||||
Total | 1,374,292 | 1,218,509 | 155,783 | 12.8 | % | |||||||||||
Cost of goods sold | 882,157 | 788,152 | (94,005 | ) | (11.9 | )% | ||||||||||
Gross profit | 492,135 | 430,357 | 61,778 | 14.4 | % | |||||||||||
Operating expenses: | ||||||||||||||||
SG&A | 227,524 | 189,387 | (38,137 | ) | (20.1 | )% | ||||||||||
R&D | 66,006 | 61,336 | (4,670 | ) | (7.6 | )% | ||||||||||
Total | 293,530 | 250,723 | (42,807 | ) | (17.1 | )% | ||||||||||
Income from operations | 198,605 | 179,634 | 18,971 | 10.6 | % | |||||||||||
Other non-operating (expense) income: | ||||||||||||||||
Interest expense, net | (96,640 | ) | (110,236 | ) | 13,596 | (12.3 | )% | |||||||||
Equity in earnings of affiliate | 426 | 436 | (10 | ) | (2.3 | )% | ||||||||||
Litigation settlement | — | 12,937 | (12,937 | ) | (100.0 | )% | ||||||||||
Total | (96,214 | ) | (96,863 | ) | 649 | (0.7 | )% | |||||||||
Income before income taxes | 102,391 | 82,771 | 19,620 | 23.7 | % | |||||||||||
(Provision) benefit for income taxes | (36,594 | ) | 40,794 | (77,388 | ) | (189.7 | )% | |||||||||
Net income | $ | 65,797 | $ | 123,565 | $ | (57,768 | ) | (46.8 | )% | |||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 39.01 | $ | 65.58 | $ | (26.57 | ) | (40.5 | )% | |||||||
Diluted | $ | 0.71 | $ | 1.36 | $ | (0.65 | ) | (47.8 | )% | |||||||
Financial measures: | ||||||||||||||||
Gross margin | 35.8 | % | 35.3 | % | ||||||||||||
Operating margin | 14.5 | % | 14.7 | % | ||||||||||||
Effective tax rate | 35.7 | % | (49.3 | )% |
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Years Ended December 31, | Change | |||||||||||||||
2008 | 2007 | $ | % | |||||||||||||
Product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 677,737 | $ | 646,779 | $ | 30,958 | 4.8 | % | ||||||||
Prolastin A1PI | 316,495 | 276,538 | 39,957 | 14.4 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 61,075 | 68,780 | (7,705 | ) | (11.2 | )% | ||||||||||
Fraction VIII (Koate DVI) | 40,247 | 33,698 | 6,549 | 19.4 | % | |||||||||||
Hyperimmunes | 78,178 | 68,799 | 9,379 | 13.6 | % | |||||||||||
Other | 160,818 | 102,092 | 58,726 | 57.5 | % | |||||||||||
Total product net revenue | 1,334,550 | 1,196,686 | 137,864 | 11.5 | % | |||||||||||
Other net revenue | 39,742 | 21,823 | 17,919 | 82.1 | % | |||||||||||
Total net revenue | $ | 1,374,292 | $ | 1,218,509 | $ | 155,783 | 12.8 | % | ||||||||
Years Ended December 31, | Change | |||||||||||||||
2008 | 2007 | $ | % | |||||||||||||
U.S. product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 479,895 | $ | 476,009 | $ | 3,886 | 0.8 | % | ||||||||
Prolastin A1PI | 202,678 | 181,994 | 20,684 | 11.4 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 38,701 | 36,709 | 1,992 | 5.4 | % | |||||||||||
Fraction VIII (Koate DVI) | 8,574 | 7,016 | 1,558 | 22.2 | % | |||||||||||
Hyperimmunes | 60,707 | 49,777 | 10,930 | 22.0 | % | |||||||||||
Other | 77,378 | 44,104 | 33,274 | 75.4 | % | |||||||||||
Total U.S. product net revenue | $ | 867,933 | $ | 795,609 | $ | 72,324 | 9.1 | % | ||||||||
International product net revenue: | ||||||||||||||||
Gamunex IVIG | $ | 197,842 | $ | 170,770 | $ | 27,072 | 15.9 | % | ||||||||
Prolastin A1PI | 113,817 | 94,544 | 19,273 | 20.4 | % | |||||||||||
Fraction V (Albumin and Plasmanate) | 22,374 | 32,071 | (9,697 | ) | (30.2 | )% | ||||||||||
Fraction VIII (Koate DVI) | 31,673 | 26,682 | 4,991 | 18.7 | % | |||||||||||
Hyperimmunes | 17,471 | 19,022 | (1,551 | ) | (8.2 | )% | ||||||||||
Other | 83,440 | 57,988 | 25,452 | 43.9 | % | |||||||||||
Total international product net revenue | $ | 466,617 | $ | 401,077 | $ | 65,540 | 16.3 | % | ||||||||
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Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Operating activities: | ||||||||||||||||||||
Net income | $ | 92,962 | $ | 116,707 | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||||||
Non-cash items | 37,954 | 44,732 | 92,375 | 67,272 | (34,413 | ) | ||||||||||||||
Changes in operating assets and liabilities, excluding the effects of business acquisitions | (58,517 | ) | (30,533 | ) | (12,109 | ) | (100,055 | ) | 37,979 | |||||||||||
Net cash provided by operating activities | $ | 72,399 | $ | 130,906 | $ | 234,155 | $ | 33,014 | $ | 127,131 | ||||||||||
Investing activities: | ||||||||||||||||||||
Purchase of property, plant, and equipment | $ | (53,205 | ) | $ | (23,672 | ) | $ | (75,163 | ) | $ | (86,212 | ) | $ | (65,833 | ) | |||||
Financing arrangements with third party suppliers, net of repayments | 361 | (1,575 | ) | 744 | (16,335 | ) | (7,866 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | (18,234 | ) | (30,431 | ) | (10,272 | ) | (17,456 | ) | |||||||||||
Other | — | 232 | 232 | 880 | 510 | |||||||||||||||
Net cash used in investing activities | $ | (52,844 | ) | $ | (43,249 | ) | $ | (104,618 | ) | $ | (111,939 | ) | $ | (90,645 | ) | |||||
Financing activities: | ||||||||||||||||||||
(Repayments) borrowings under Revolving Credit Facility, net | $ | — | $ | (86,703 | ) | $ | (179,941 | ) | $ | 66,904 | $ | 33,117 | ||||||||
Repayments of borrowings under term loan | — | (3,500 | ) | (1,016,000 | ) | (7,000 | ) | (7,000 | ) | |||||||||||
Repayments of capital lease obligations | (356 | ) | (257 | ) | (574 | ) | (1,192 | ) | (23 | ) | ||||||||||
Proceeds from issuance of 7.75% Notes | — | — | 600,000 | — | — | |||||||||||||||
Discount on 7.75% Notes | — | — | (4,074 | ) | — | — | ||||||||||||||
Financing transaction costs | (417 | ) | — | (14,879 | ) | — | (217 | ) | ||||||||||||
Proceeds from initial public offering, net of issuance costs | — | — | 519,749 | — | — | |||||||||||||||
Costs related to initial public offering | — | — | (2,557 | ) | — | — | ||||||||||||||
Repurchases of common stock | (4,917 | ) | (3,902 | ) | (4,183 | ) | (36,118 | ) | — | |||||||||||
Proceeds from exercises of stock options | 6,057 | — | 7,581 | — | — | |||||||||||||||
Excess tax benefits from share-based payment arrangements | 5,708 | 1,437 | 13,406 | — | — | |||||||||||||||
Net cash provided by (used in) financing activities | $ | 6,075 | $ | (92,925 | ) | $ | (81,472 | ) | $ | 22,594 | $ | 25,877 | ||||||||
Cash and cash equivalents (at end of period) | $ | 89,502 | $ | 11,829 | $ | 65,239 | $ | 16,979 | $ | 73,467 | ||||||||||
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• | Talecris’ depreciation and amortization expense for the six months ended June 30, 2010 and 2009 was $16.9 million and $13.9 million, respectively, and for the years ended December 31, 2009, 2008, and 2007 was $28.9 million, $20.3 million, and $10.7 million, respectively. The increase in depreciation and amortization expense reflects Talecris’ cumulative capital investments primarily related to Talecris’ manufacturing facilities and TPR. | |
• | Talecris’ share-based compensation expense for the years ended December 31, 2009, 2008, and 2007 was $47.5 million, $38.7 million, and $21.2 million, respectively. The increase in the share-based compensation expense reflects incremental expense associated with share awards granted during the periods presented. In addition, during 2009, Talecris accelerated the vesting of certain of its Chairman and Chief Executive Officer’s stock options, which resulted in a non-cash compensation charge of $11.8 million. Talecris’ share-based compensation expense for the six months ended June 30, 2010 and 2009 was $10.6 million and $20.2 million, respectively. The decrease in share-based compensation expense during 2010 was primarily driven by the final vesting of awards under the 2005 Stock Option and Incentive Plan on April 1, 2010 and the majority of the awards under the 2006 Restricted Stock Plan on March 31, 2010. In addition, a combination of an adjustment during the 2010 first quarter as a result of actual award forfeitures being higher than initially estimated as well as the acceleration of certain option awards to Talecris’ Chairman and Chief Executive Officer during the 2009 third quarter further impacted the comparability of share-based compensation expense between the periods presented. | |
• | During the year ended December 31, 2009, Talecris recognized a non-cash charge of $12.1 million related to the write-off of unamortized debt issuance costs associated with its First and Second Lien Term Loans as discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris — Matters Affecting Comparability — Financial Impact of IPO and Refinancing Transactions.” | |
• | During the year ended December 31, 2008, Talecris recognized previously deferred revenue of $4.8 million as discussed in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris — Results of Operations.” No significant amounts were recognized during the other periods presented. | |
• | During the year ended December 31, 2009, Talecris’ deferred tax assets decreased $15.4 million, of which $1.2 million is included in operating activities and $14.2 million is included in non-cash financing activities related to the reclassification of the unrealized losses associated with Talecris’ interest rate swap contracts to earnings upon their settlement and termination. During the years ended December 31, 2008 and 2007, Talecris’ deferred tax assets increased $5.5 million and $79.7 million, respectively. The increase in Talecris’ deferred tax assets during the year ended December 31, 2007 resulted primarily from the non-cash tax benefit related to the release of its remaining valuation allowance as discussed previously. During the six |
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months ended 2010 and 2009, Talecris’ net deferred income tax assets decreased $11.5 million and $4.2 million, respectively. |
• | During the six months ended June 30, 2010 and 2009 and the year ended December 31, 2009, Talecris recognized excess tax benefits related to share-based compensation of $5.7 million, $1.4 million, and $13.4 million, respectively. | |
• | Amortization of deferred compensation related to special recognition bonus awards was $1.7 million and $3.1 million for the six months ended June 30, 2010 and 2009, respectively, and $5.7 million, $5.9 million and $6.8 million for the years ended December 31, 2009, 2008 and 2007, respectively. Talecris made the final special recognition bonus award payments during March 2010. |
• | Talecris’ accounts receivable, net, (increased) decreased $(33.1) million and $(7.5) million for the six months ended June 30, 2010 and 2009, respectively, and $8.6 million, $(26.9) million, and $(9.2) million for the years ended December 31, 2009, 2008, and 2007, respectively. Accounts receivable, net, balances are influenced by the timing of net revenue and customer collections. Talecris’ days sales outstanding (DSO) were 38 days and 37 days at June 30, 2010 and 2009, respectively, and 32 days, 34 days, and 35 days at December 31, 2009, 2008, and 2007, respectively. Talecris’ international sales terms generally range from 30 to 150 days due to industry and national practices outside of the United States, which can impact Talecris’ DSO results. Talecris calculates DSO as its period end accounts receivable, net, divided by its prior three months’ net sales, multiplied by 90 days. Talecris’ calculation of DSO may not be consistent with similar calculations performed by other companies. | |
• | Talecris’ inventories (increased) decreased $(10.0) million and $(22.0) million during the six months ended June 30, 2010 and 2009, respectively, and $(57.5) million, $(92.9) million, and $26.8 million for the years ended December 31, 2009, 2008, and 2007, respectively. Talecris’ inventories fluctuate based upon its plasma collections, production mix and cycle times, production capacities, normal production shut-downs, finished product releases, targeted safety stock levels, and demand for its products. Talecris’ biological manufacturing processes result in relatively long inventory cycle times ranging from 100 days to in excess of 400 days for some specialty plasma in addition to a required 60 day pre-production holding period for plasma. Consequently, Talecris has significant investment in raw material andwork-in-process inventories for extended periods. The increase in Talecris’ inventories during 2009 was primarily driven by Thrombate III inventory build in preparation of manufacturing transfer from Bayer, increased plasma collections as compared to the prior year, and higher hyperimmune inventory levels. During 2008 and 2007, Talecris repurchased inventories with a value of approximately $28.6 million and $81.9 million, respectively, from a Bayer affiliate in Germany, where Talecris terminated its distribution agreement. During November 2007, Talecris experienced unplanned plant maintenance as discussed previously, which resulted in lower inventory at December 31, 2007, thus impacting the 2008 comparability. | |
• | Talecris’ prepaid expenses and other assets (increased) decreased $(6.4) million and $14.3 million for the six months ended June 30, 2010 and 2009, respectively, and $8.0 million, $(15.8) million, and $0.2 million for the years ended December 31, 2009, 2008, and 2007, respectively. The increase for the six months ended June 30, 2010 was primarily driven by an increase in prepaid income taxes of $8.3 million, partially offset by lower corporate prepaid amounts. The decrease for the six months ended June 30, 2009 was primarily driven by a decrease in prepaid income taxes of $8.2 million and prepaid plasma of $7.3 million. The decrease for the year ended December 31, 2009 was primarily driven by a reclassification of $10.1 million of prepaid plasma to raw material inventories as a result of plasma deliveries from IBR upon center licensures, for which Talecris subsequently acquired the centers. This was partially offset by higher corporate prepaid amounts, including insurance and various service contracts. The increase during 2008 was primarily driven by a $9.7 million increase in prepaid plasma and a $7.8 million increase in prepaid income taxes, partially offset by lower corporate prepaid amounts. Under the terms of Talecris’ 2007 Supply Agreement with IBR, Talecris was required to prepay 90% for unlicensed plasma. Upon center licensure, Talecris remits the remaining 10% to IBR and reclassifies the prepaid amounts to raw material inventories. The change in Talecris’ prepaid expenses and other assets during 2007 was not material. |
• | Talecris’ operating liabilities (decreased) increased $(9.0) million and $(15.3) million during the six months ended June 30, 2010 and 2009, respectively, and $28.8 million, $35.5 million, and $20.2 million |
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for the years ended December 31, 2009, 2008, and 2007, respectively. The decrease for the six months ended June 30, 2010 was primarily driven by lower accrued payroll, bonuses, and employee benefits of $21.7 million primarily due to the payment of accrued 2009 corporate performance bonuses and the final special recognition bonus payment in March 2010, as well as a decrease in interest payable obligations of $3.1 million associated with Talecris’ 7.75% Notes due to the timing of contractual payments. These items were partially offset by an increase in accrued goods and services of $8.6 million primarily as a result of transaction costs related to the merger agreement with Grifols and higher Medicaid, commercial rebates, and chargebacks of $2.5 million primarily as a result of the recently enacted healthcare reform legislation which increased the rate of AMP used to compute Medicaid rebates charged to drug manufacturers and higher Medicaid utilization. The decrease for the six months ended June 30, 2009 was primarily driven by lower accounts payable obligations of $4.2 million due to Talecris’ cash management strategies and a reduction of $12.3 million in accrued payroll, bonuses, and profit sharing primarily due to the payment of accrued 2008 corporate performance bonuses. These items were partially offset by higher taxes payable of $4.1 million and higher Medicaid, commercial rebates, and chargebacks of $6.7 million. The increase for the year ended December 31, 2009 was primarily driven by higher accounts payable of $16.1 million and higher Medicaid, commercial rebates, and chargebacks of $14.2 million, partially offset by lower interest payable and accrued goods and services. The increase in 2008 was primarily driven by higher accounts payable of $16.6 million, higher accrued payroll, bonuses, and benefits of $13.7 million, higher Medicaid, commercial rebates, and chargebacks of $2.2 million, and generally higher liabilities for accrued goods, services, and other items, partially offset by lower taxes payable of $10.6 million. The increase in 2007 was primarily driven by higher accounts payable of $12.1 million, higher accrued payroll, bonuses, and benefits of $12.5 million, higher Medicaid, commercial rebates, and chargebacks of $5.5 million, higher interest payable of $11.8 million, higher taxes payable of $9.8 million, partially offset by lower payables to related parties of $27.3 million as a result of the termination of many of Talecris’ then existing transition services and distribution agreements with Bayer, and generally lower accrued goods, services, and other items. |
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Reductions in | ||||||||||||||||
Available Credit | ||||||||||||||||
Facility for | ||||||||||||||||
Maximum | Other | June 30, 2010 | ||||||||||||||
Available | Financial | Amounts | Amounts | |||||||||||||
Debt Instrument | Amounts | Instruments(1) | Outstanding | Available | ||||||||||||
7.75% Notes | $ | 600,000 | $ | — | $ | 600,000 | $ | — | ||||||||
Revolving Credit Facility | 325,000 | 2,431 | — | 322,569 | ||||||||||||
Total sources of credit | $ | 925,000 | $ | 2,431 | $ | 600,000 | $ | 322,569 | ||||||||
(1) | Amounts represent letters of credit used as security for utilities, insurance, and third-party warehousing. |
1) | 7.75% Unsecured Senior Notes, due November 15, 2016 |
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Fiscal Year | Percentage | |||
2012 | 103.875 | % | ||
2013 | 102.583 | % | ||
2014 | 101.292 | % | ||
2015 and thereafter | 100.000 | % |
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2) | Revolving Credit Facility |
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3) | First and Second Lien Term Loans |
4) | Interest Rate Swaps and Caps |
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Standard & | ||||
Moody’s | Poor’s | |||
7.75% Notes | B1 | BB | ||
Corporate Family Rating | Ba3 | BB |
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�� | ||||||||||||||||||||||||
Payments Due by Period | ||||||||||||||||||||||||
Less than | More than | |||||||||||||||||||||||
Total | 1 Year(4) | 1-3 Years | 4-5 Years | 5 Years | ||||||||||||||||||||
Long-term debt(1) | $ | 600,000 | $ | — | $ | — | $ | — | $ | 600,000 | ||||||||||||||
Interest payments(2) | 328,600 | 49,600 | 139,500 | 93,000 | 46,500 | |||||||||||||||||||
Capital lease obligations | 15,157 | 1,740 | 5,356 | 3,455 | 4,606 | |||||||||||||||||||
Operating lease obligations | 50,486 | 16,727 | 24,759 | 5,351 | 3,649 | |||||||||||||||||||
Purchase commitments(3) | 719,530 | 202,307 | 350,307 | 108,542 | 58,374 | |||||||||||||||||||
Total | $ | 1,713,773 | $ | 270,374 | $ | 519,922 | $ | 210,348 | $ | 713,129 | ||||||||||||||
(1) | Long-term debt in the table above consists of outstanding amounts under Talecris’ 7.75% Notes. Talecris also has a $325.0 million revolving credit facility, maturing on December 6, 2011, for which no amounts were outstanding at June 30, 2010. The 7.75% Notes are redeemable or puttable prior to their scheduled maturity of November 15, 2016 under certain circumstances as described further in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Talecris — Liquidity and Capital Resources.” | |
(2) | Interest payments related to long-term debt in the table above consists of interest amounts under Talecris’ 7.75% Notes. Talecris also has a $325.0 million variable rate revolving credit facility, for which no amounts were outstanding at June 30, 2010. | |
(3) | Includes material agreements to purchase goods and services that are enforceable and legally binding. | |
(4) | Amounts in this column represent Talecris’ estimated contractual obligations for the 2010 full year, as of December 31, 2009. At June 30, 2010, Talecris’ contractual obligations related to interest payments and minimum purchase commitments for the remainder of 2010 were approximately $23.3 million and $113.7 million, respectively. At June 30, 2010, Talecris’ contractual obligations related to capital lease obligations and operating lease obligations for the remainder of 2010 were $0.9 million and $9.5 million, respectively. |
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• | Talecris’ management uses adjusted EBITDA as one of its primary financial performance measures in theday-to-day oversight of Talecris’ business to, among other things, allocate financial and human resources across Talecris’ organization, determine appropriate levels of capital investment and research and development spending, determine staffing needs and develop hiring plans, manage Talecris’ plants’ production plans, and assess appropriate levels of sales and marketing initiatives. Talecris’ management uses adjusted EBITDA in its decision making because this supplemental operating performance measure facilitates internal comparisons to historical operating results and external comparisons to competitors’ historical operating results by eliminating various income and expense items which are either not part of operating income or may vary significantly when comparing Talecris’ results among the periods presented to Talecris’ competitors or other companies. |
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• | The compensation committee uses adjusted EBITDA as a financial performance objective because it is one of Talecris’ primary financial performance measures used in theday-to-day oversight of its business to, among other things, allocate financial and human resources across Talecris’ organization, determine appropriate levels of capital investment and research and development spending, determine staffing needs and develop hiring plans, manage Talecris’ plants’ production plans, and assess appropriate levels of sales and marketing initiatives. In 2009 and prior years, the compensation committee used unlevered free cash flow because it measures management’s effectiveness in managing cash and the related impact on interest expense. In order to motivate top performance by Talecris’ executives, Talecris establishes a target level for each of the various performance criteria that is high enough that there is no certainty it is achievable. The target level for any performance criterion changes from year to year. These target performance levels reflect challenges with respect to various factors such as sales volume and pricing, cost control, working capital management, plasma platform objectives, R&D objectives and sales and marketing objectives, among others. Talecris’ compensation committee has discretion to adjust the actual results related to the performance targets positively or negatively for items which, in the opinion of the compensation committee, were not reasonably within management’s control. Talecris’ compensation committee also evaluates the manner in which actual results were achieved to determine if unusual actions or risks were taken that would impact or manipulate the results. | |
• | Talecris’ lenders use adjusted EBITDA to determine compliance with the Leverage Ratio financial covenant under Talecris’ revolving credit facility, which is calculated as debt less cash divided by the last twelve months’ adjusted EBITDA. The October 15, 2009 amendment to Talecris’ revolving credit facility removed restrictions on Talecris’ annual capital expenditures if Talecris’ Leverage Ratio is greater than 2.00 to 1.00. Talecris’ 7.75% Notes use a similar measure referred to as Consolidated Cash Flow to determine compliance with the Fixed Charge Coverage Ratio, which allows for the incurrence of indebtedness and issuance of qualified and preferred stock if at least 2.00 to 1.00. |
• | Interest expense is a necessary element of Talecris’ costs and is largely a function of its capital structure and reflects its debt levels; | |
• | Depreciation and amortization primarily result from the allocation of resources relative to investment decisions by Talecris’ management and Board of Directors; | |
• | Income tax expense results from Talecris’ performance and applying statutory tax rates in the jurisdictions in which Talecris operates coupled with the application of income tax accounting guidance and tax planning strategies; | |
• | Non-cash compensation expense is expected to be a recurring component of Talecris’ costs, although Talecris expects that it will not grant share-based compensation in the same magnitude in the future; | |
• | Expenses related to Talecris’ special recognition bonuses are significant, and although Talecris does not expect to grant bonuses in this magnitude in the future, bonuses will continue to be a key component of compensation to retain and attract employees; and | |
• | Expenses related to debt extinguishment represent a necessary element of Talecris’ costs to the extent that Talecris restructures its debt. |
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Six Months Ended | ||||||||||||||||||||
June 30, | Years Ended December 31, | |||||||||||||||||||
2010 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||
Net income | $ | 92,962 | $ | 116,707 | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||||||
Interest expense, net(a) | 23,386 | 41,858 | 74,491 | 97,040 | 110,236 | |||||||||||||||
Income tax provision (benefit)(b) | 51,414 | 60,789 | 75,008 | 36,594 | (40,794 | ) | ||||||||||||||
Depreciation and amortization(c) | 16,851 | 13,921 | 28,936 | 20,269 | 10,749 | |||||||||||||||
EBITDA | 184,613 | 233,275 | 332,324 | 219,700 | 203,756 | |||||||||||||||
Transition and other non-recurring expenses(d) | — | — | — | — | 15,251 | |||||||||||||||
Management fees(e) | — | 3,757 | 5,715 | 6,871 | 6,097 | |||||||||||||||
Non-cash share-based compensation expense(f) | 10,584 | 20,171 | 47,546 | 38,707 | 21,241 | |||||||||||||||
Special recognition bonus expense(g) | 1,816 | 3,363 | 6,310 | 6,622 | 8,167 | |||||||||||||||
Loss on extinguishment of debt(h) | — | — | 43,033 | — | — | |||||||||||||||
Equity in earnings of affiliate(i) | (326 | ) | (184 | ) | (441 | ) | (426 | ) | (436 | ) | ||||||||||
Merger-related expenses(j) | 8,423 | 6,737 | 9,136 | 5,593 | — | |||||||||||||||
Other(k) | 223 | 777 | 3,660 | 10,749 | 2,695 | |||||||||||||||
Adjusted EBITDA | $ | 205,333 | $ | 267,896 | $ | 447,283 | $ | 287,816 | $ | 256,771 | ||||||||||
Merger termination fee(l) | — | — | (75,000 | ) | ||||||||||||||||
Consolidated Cash Flow(m) | $ | 205,333 | $ | 267,896 | $ | 372,283 | ||||||||||||||
(a) | Represents interest expense associated with Talecris’ debt structure. Through the third quarter of 2009, Talecris’ debt structure consisted of facilities totaling $1.355 billion, including Talecris’ $700 million First Lien Term Loan, $330 million Second Lien Term Loan, and $325 million Revolving Credit Facility, as well as Talecris’ interest rate cap and swap contracts. As a result of Talecris’ IPO and refinancing transactions during October 2009, Talecris reduced its credit facilities to $925 million, consisting of its $600 million 7.75% Notes and $325 million Revolving Credit Facility. Talecris also settled and terminated its interest rate swap contracts. | |
(b) | Represents Talecris’ income tax provision (benefit) as presented in its consolidated income statements. | |
(c) | Represents depreciation and amortization expense associated with Talecris’ property, plant, and equipment, and all other intangible assets. | |
(d) | Represents the expense associated with the development of Talecris’ internal capabilities to operate as a standalone company apart from Bayer, consisting primarily of consulting services associated with developing its corporate infrastructure. | |
(e) | Represents the advisory fees paid to Talecris Holdings, under the Management Agreement, as amended. This agreement was terminated in connection with Talecris’ IPO. | |
(f) | Represents Talecris’ non-cash share-based compensation expense associated with stock options, restricted stock, RSUs, and performance share units. | |
(g) | Represents compensation expense associated with special recognition bonus awards granted to certain of Talecris’ employees and senior executives to reward past performance. Talecris made the final payments under the special recognition bonus awards during March 2010. Talecris does not anticipate granting similar awards in the future. | |
(h) | Represents charges to write-off previously capitalized financing charges associated with Talecris’ First and Second Lien Term Loans as a result of their repayment and termination as well as costs associated with the settlement and termination of Talecris’ interest rate swap contracts. | |
(i) | Represents non-operating income associated with Talecris’ investment in Centric, which Talecris believes are not part of its core operations. | |
(j) | Represents merger-related expenses associated with Talecris’ terminated merger agreement with CSL and Talecris’ merger agreement with Grifols, including investment bankers, legal, accounting and other costs, as well as retention expenses. | |
(k) | For the year ended December 31, 2009, the amount represents $3.1 million of charges related primarily to capital lease assets and leasehold improvements, offset by recoveries of $1.9 million related to Talecris’ 2008 plasma center cGMP issue. For the year ended December 31, 2009, the amount also includes $1.3 million of costs related to Talecris’ October 6, 2009 IPO. For the year ended December 31, 2008, the amount represents an inventory impairment charge, net of recoveries of $5.8 million due to Talecris’ plasma center cGMP issue, an impairment charge of $3.6 million related primarily to capital lease assets and leasehold improvements, and other long-lived asset |
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impairment charges of $0.7 million. For the year ended December 31, 2008, the amount also includes $0.9 million of costs related to the initial public offering that was discontinued during 2008, partially offset by insurance recoveries of $0.3 million. During the year ended December 31, 2007, the amount represents asset impairment charges of $2.8 million associated with the discontinuation of a capital project. For the six months ended June 30, 2010, the amount includes long-lived asset impairment charges of $0.2 million and losses on disposals of equipment of $0.1 million, partially offset by inventory recoveries of $0.1 million. For the six months ended June 30, 2009, the amount includes losses on disposals of equipment of $0.9 million, long-lived asset impairment charges of $0.3 million, and $0.2 million of non-capitalizable IPO costs, partially offset by inventory recoveries of $0.7 million. | ||
(l) | For the year ended December 31, 2009, the amount includes a $75.0 million merger termination fee that Talecris received from CSL in connection with the termination of its definitive merger agreement. | |
(m) | The computation of Consolidated Cash Flow is not applicable prior to the issuance of Talecris’ 7.75% Notes on October 21, 2009. Talecris’ adjusted EBITDA for the six months ended June 30, 2009 includes a $75.0 million termination fee received from CSL as a result of the termination of the definitive merger agreement. In addition, Talecris incurred legal and other costs associated with the regulatory review process of Talecris’ terminated merger agreement with CSL of $6.0 million for the six months ended June 30, 2009. The merger termination fee and these expenses were not permitted as adjustments to Talecris’ adjusted EBITDA as defined in Talecris’ then existing revolving credit facility or First and Second Lien Term Loans. |
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Six Months | Year Ended | |||||||
Ended June 30, | December 31, | |||||||
2010 | 2009 | |||||||
(in thousands) | ||||||||
Equity in earnings of affiliate | $ | 326 | $ | 441 | ||||
Dividends declared and paid | $ | — | $ | 225 | ||||
Fees for services | $ | 11,076 | $ | 20,306 |
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MANAGEMENT OF TALECRIS
Shares Beneficially Owned | ||||||||
Name and Address of Beneficial Owner | Number | Percentage | ||||||
5% Stockholders | ||||||||
Talecris Holdings, LLC(1)(2) | 61,175,236 | 49.7 | ||||||
Capital Research Global Investors(3) | 6,145,000 | 5.0 | ||||||
Named Executive Officers and Directors | ||||||||
John F. Gaither(4) | 682,758 | * | ||||||
John M. Hanson(5) | 621,488 | * | ||||||
Mary J. Kuhn(6) | 612,171 | * | ||||||
John Perkins(7) | 307,271 | * | ||||||
Lawrence D. Stern(8) | 5,281,536 | 4.3 | ||||||
Stuart A. Auerbach(9) | — | * | ||||||
Richard A. Charpie(10) | — | * | ||||||
Paul N. Clark(11) | 38,736 | * | ||||||
W. Brett Ingersoll(12) | — | * | ||||||
James T. Lenehan(13) | 684,536 | * | ||||||
Kenneth J. Martin(14) | 38,736 | * | ||||||
Steven F. Mayer(15) | — | * | ||||||
Dean J. Mitchell(16) | 9,367 | * | ||||||
Ruedi E. Waeger(17) | 291,912 | * | ||||||
All executive officers and directors as a group | 10,099,762 | 8.2 |
* | Less than one percent. | |
(1) | Cerberus Plasma Holdings LLC owns a 74.3% equity interest in Talecris Holdings, LLC. Cerberus Plasma Holdings LLC, as the managing member of Talecris Holdings, LLC, exercises voting and investment authority over Talecris’ securities held by Talecris Holdings, LLC. The managing member of Cerberus Plasma Holdings LLC is Cerberus Partners, L.P., whose general partner is Cerberus Associates, L.L.C. Stephen Feinberg is the managing member of Cerberus Associates, L.L.C. and, as such, exercises sole voting and investment authority over Talecris’ securities held by Talecris Holdings, LLC. The address of Cerberus Plasma Holdings LLC isc/o Cerberus Capital Management, L.P., 299 Park Avenue, 28th floor, New York, NY10171-0002. | |
(2) | Ampersand, through its affiliated entities: (i) Ampersand 1999 Limited Partnership (“Fund 1”), (ii) Ampersand 1999 Companion Fund Limited Partnership (“Fund 2”), (iii) Ampersand 2001 Limited Partnership (“Fund 3”), (iv) Ampersand 2001 Companion Fund Limited Partnership (“Fund 4”) and (v) Ampersand Plasma Holdings, L.L.C. (“Fund 5”) (foregoing items (i) through (v) collectively referred to as the “Funds”) owns a 25.7% equity interest in Talecris Holdings, LLC. AMP 99 Management Company Limited Liability Company (“AMP 99 MC LLC”) is the General Partner of Fund 1 and Fund 2, AMP 01 Management Company Limited Liability Company (“AMP 01 MC LLC”) is the General Partner of |
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Fund 3 and Fund 4, and Fund 3 is the Managing Member of Fund 5 (AMP 99 MC LLC, AMP 01 MC LLC and the Funds collectively referred to as the “Ampersand Entities”). Dr. Charpie and Mr. Auerbach, members of the Talecris Board of Directors, are a Principal Managing Member and a Managing Member, respectively, of both AMP 99 MC LLC and AMP 01 MC LLC. They participate in voting and investment decisions on behalf of the Ampersand Entities with respect to Talecris’ securities that such entity may be deemed to beneficially own. Each of Dr. Charpie and Mr. Auerbach disclaims beneficial ownership of the shares of common stock held by Talecris Holdings, LLC or indirectly held by the Ampersand Entities. | ||
(3) | Based on information of beneficial ownership as of December 31, 2009, included in a Schedule 13G filed with the SEC on February 10, 2010. The address of Capital Research Global Investors is 333 South Hope Street, Los Angeles, CA 90071. |
(4) | Includes 676,000 options to purchase shares of Talecris common stock at $11.00 per share and 6,758 shares of Talecris common stock. |
(5) | Includes 421,760 options to purchase shares of Talecris common stock at $1.39 per share, 131,800 options to purchase shares of Talecris common stock at $11.00 per share and 67,928 shares of Talecris common stock. |
(6) | Includes 527,200 options to purchase shares of Talecris common stock at $1.39 per share and 84,971 shares of Talecris common stock. |
(7) | Includes 263,600 options to purchase shares of Talecris common stock at $11.00 per share and 43,671 shares of Talecris common stock. |
(8) | Includes 2,108,800 options to purchase shares of Talecris common stock at $1.39 per share, 2,016,000 options to purchase shares of Talecris common stock at $21.25 per share and, 970,136 shares of Talecris common stock and 186,600 shares of restricted stock entitled to vote. |
(9) | Does not include the shares held indirectly by the Ampersand Entities. Mr. Auerbach serves as a Managing Member of AMP 99 MC LLC and AMP 01 MC LLC. Mr. Auerbach disclaims beneficial ownership of such shares. | |
(10) | Does not include the shares held indirectly by the Ampersand Entities. Dr. Charpie serves as a Principal Managing Member of AMP 99 MC LLC and AMP 01 MC LLC. Dr. Charpie disclaims beneficial ownership of such shares. |
(11) | Includes 8,576 options to purchase shares of Talecris common stock at $11.00 per share, 12,616 options to purchase shares of Talecris common stock at $9.88 per share, 7,848 options to purchase shares of Talecris common stock at $16.63 per share and 9,696 shares of Talecris common stock. |
(12) | Does not include the shares held indirectly by Cerberus Partners, L.P. Mr. Ingersoll serves as Senior Managing director of an affiliate of Cerberus Partners, L.P. Mr. Ingersoll disclaims beneficial ownership of such shares. |
(13) | Includes 527,200 options to purchase shares of Talecris common stock at $1.39 per share, 12,616 options to purchase shares of Talecris common stock at $9.88 per share, 7,848 options to purchase shares of Talecris common stock at $16.63 per share and 136,872 shares of Talecris common stock. |
(14) | Includes 8,576 options to purchase shares of Talecris common stock at $11.00 per share, 12,616 options to purchase shares of Talecris common stock at $9.88 per share, 7,848 options to purchase shares of Talecris common stock at $16.63 per share and 9,696 shares of Talecris common stock. |
(15) | Does not include the shares held indirectly by Cerberus Partners, L.P. Mr. Mayer serves as managing director of an affiliate of Cerberus Partners, L.P. Mr. Mayer disclaims beneficial ownership of such shares. The address for Mr. Mayer isc/o Cerberus California, Inc., 11812 San Vincente Boulevard, Los Angeles, CA 90049. | |
(16) | Includes 9,367 options to purchase shares of Talecris common stock at $20.99 per share. |
(17) | Includes 210,880 options to purchase shares of Talecris common stock at $1.39 per share, 12,616 options to purchase shares of common stock of $9.88 per share, 7,848 options to purchase shares of common stock of $16.63 per share and 60,568 shares of Talecris common stock. |
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YOUR RIGHTS AS A POTENTIAL HOLDER OF GRIFOLS NON-VOTING SHARES AND
GRIFOLS NEW ADSs
Talecris Common Shares | Grifols Non-Voting Shares | |
CORPORATE GOVERNANCE | ||
Governing Documents. Talecris’ Amended and Restated Certificate of Incorporation, its Amended and Restated Bylaws and the DGCL govern the rights of holders of Talecris common stock. | Grifols’ ByLaws, and the Spanish Companies Law (Ley de Sociedades de Capital), as amended from time to time, govern the rights of holders of the Grifols non-voting shares. | |
AUTHORIZED CAPITAL STOCK | ||
Authorized Shares. At August 31, 2010 the total number of authorized shares of Talecris capital stock was 440,000,010 shares, consisting of 400,000,000 shares of Talecris common stock, having a par value of $0.01 per share, and 40,000,010 shares of Talecris preferred stock, having a par value of $0.01 per share. As of August 31, 2010, Talecris had issued and outstanding 123,247,492 shares of Talecris common stock. | Shares. Under the merger agreement, Grifols will amend its ByLaws to provide for the non-voting shares to be issued and delivered as part of the merger consideration. Upon approval of the issuance and such amendment by the Grifols shareholders at the general meeting, Grifols’ share capital will be increased by up to € and will be represented by two separate classes, fully subscribed and paid-up, belonging to two separate classes. The ordinary (Class A) shares will comprise the 213,064,899 ordinary shares, having a nominal value of €0.50 each, all of which belong to the same class and series. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Under the terms of Talecris’ certificate of incorporation, the Talecris Board of Directors is authorized to issue shares of preferred stock in one or more series without stockholder approval. The Talecris Board of Directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. | The non-voting (Class B) shares will comprise up to 86,500,000 non-voting shares, having a nominal value of € each, all of which will pertain to the same class and series. | |
VOTING RIGHTS; ACTION BY WRITTEN CONSENT | ||
Voting Rights. Holders of Talecris common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. An election of directors by the Talecris stockholders is determined by a majority of the stock having voting power present in person or represented by proxy. Action by Written Consent. For as long as Talecris Holdings, its affiliates or any person who is an express assignee or designee of Talecris Holdings owns at least 30% of the outstanding shares of Talecris common stock, Talecris’ certificate of incorporation permits stockholder action by partial written consent signed by the holders of outstanding Talecris stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares of stock of Talecris entitled to vote thereon were present and voted. Once Talecris Holdings, its affiliates or any per son who is an express assignee or designee of Talecris Holdings ceases to own at least 30% of the outstanding shares of Talecris common stock, Talecris’ certificate of incorporation does not permit stockholder action by unanimous or partial written consent. | Voting Rights. Holders of the Grifols non-voting shares will not have voting rights. Notwithstanding the lack of voting rights of the Grifols non-voting shares, resolutions of Grifols on the following matters will require the approval of a majority of outstanding Grifols non-voting shares: • Any resolution (i) authorizing Grifols or any subsidiary of Grifols to repurchase or acquire any Grifols ordinary shares, except for pro rata repurchases available equally to holders of the Grifols non-voting shares on the same terms and at the same price as offered to holders of Grifols ordinary shares; or (ii) approving the redemption of any shares of Grifols and any share capital reductions (through repurchases, cancellation of shares or otherwise) other than (a) those redemptions required by law and (b) those redemptions which affect equally Grifols ordinary shares and the Grifols non-voting shares and in which each Grifols non-voting share is treated the same as each Grifols ordinary share in such transaction; | |
• Any resolution approving the issuance, granting or sale (or authorizing the Grifols Board of Directors to issue, grant or sell) (i) any shares in Grifols, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares of Grifols or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities of Grifols, except if (a) each Grifols non-voting share is treated the same as one Grifols ordinary share in the relevant issuance, grant or sale and, therefore, has preferential subscription or allotment rights in the relevant issuance, grant or sale to the same extent, if any, as a Grifols ordinary share or (b) the issuance is made in accordance with the subscription rights described in the section entitled “Description of Grifols’ Share Capital — Grifols Non-Voting (Class B) Shares — Subscription Rights”; |
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Talecris Common Shares | Grifols Non-Voting Shares | |
• Any resolution approving unconditionally or not (i) a transaction subject to Law 3/2009 (including, without limitation, a merger, split-off, cross-border redomiciliation or global assignment of assets and liabilities), except if in such transaction each Grifols non-voting share is treated the same as one Grifols ordinary share; or (ii) the dissolution or winding-up of Grifols, except where such resolution is required by law; | ||
• Any resolution for the delisting of any Grifols shares from any stock exchange; and | ||
• Generally, any resolution and any amendment of Grifols’ ByLaws which directly or indirectly adversely affects the rights, preferences or privileges of the Grifols non-voting shares (including any resolution that adversely affects the Grifols non-voting shares relative to the Grifols ordinary shares or that positively affects the Grifols ordinary shares relative to the Grifols non-voting shares, or that affects the provisions in Grifols’ ByLaws relating to the Grifols non-voting shares). | ||
Action by Written Consent. The Spanish Companies Law does not permit actions reserved for the shareholders meeting to be taken without a meeting. | ||
Approval of Extraordinary Actions. Under the DGCL, fundamental corporate transactions (such as mergers, sales of all or substantially all of the corporation’s assets, dissolutions, and amendments to Talecris’ certificate of incorporation) as well as certain other actions, require the approval of the holders of not less than a majority of the outstanding shares entitled to vote thereon. | ||
Talecris’ certificate of incorporation further provides that a business combination not fulfilling specified pre-conditions as described under the caption “— Business Combinations” requires the approval of holders of not less than 662/3% of the shares entitled to vote. | ||
AMENDMENT TO THE ARTICLES OF INCORPORATION | ||
Under Delaware law, amendments to a corporation’s certificate of incorporation must be approved by a resolution of the Board of Directors and by the affirmative vote of a majority of the shares entitled to vote thereon. Delaware law also permits a corporation to require in its certificate of incorporation a greater proportion of voting power to approve a specified amendment. | Not applicable. Under the Spanish Companies Law, the articles of incorporation (escritura de constitucion) cannot be amended. Any changes to a company’s charter documents are made by amending the relevant company’s ByLaws. (See the caption “— Amendments to the ByLaws) |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Talecris’ certificate of incorporation contains various provisions that require a super-majority vote of shareholders to amend or repeal particular sections of such certificate. Under Talecris’ certificate of incorporation, the amendment or repeal of the provisions of Talecris’ certificate of incorporation relating to: (i) the number of directors serving on the Board of Directors; (ii) removal of a director from the Talecris Board of Directors; and (iii) stockholder approval required for a business combination not fulfilling specified pre-conditions and related matters will require either (a) the affirmative vote of not less than 662/3% of the shares entitled to vote generally in the election of directors, or (b) the affirmative vote of the majority of the members of the Talecris Board of Directors and the affirmative vote of shareholders entitled to cast at least a majority of shares entitled to vote generally in the election of directors. | ||
AMENDMENT TO THE BYLAWS | ||
The authority to amend or repeal Talecris’ bylaws is vested in Talecris’ Board of Directors by a majority vote of Talecris’ Board of Directors. Talecris’ bylaws provide that the bylaws may be amended or repealed by the affirmative vote of Talecris stockholders holding at least a majority of the shares entitled to vote (except that any amendment to the removal of directors provision set forth in the Talecris’ bylaws shall require the affirmative vote of not less than 662/3% of the shares entitled to vote). Any amendment, repeal, or modification of any indemnification provision set forth in the Talecris’ bylaws shall be prospective only. | Holders of the Grifols non-voting shares will not have a right to vote on resolutions relating to the amendment of the Grifols ByLaws. Notwithstanding such lack of voting rights and as set forth under the caption “— Voting Rights” above, amendments of the Grifols ByLaws will require the approval of a majority of the outstanding Grifols non-voting shares in limited circumstances, namely when the amendment directly or indirectly adversely affects the rights, preferences or privileges of the Grifols non-voting shares. | |
RIGHT TO DIVIDENDS | ||
Holders of Talecris common stock are entitled to receive dividends ratably when, as and if declared by the Talecris Board of Directors from funds legally available for the payment of dividends, after payment of all dividends on preferred stock, if any, is outstanding. subject to any preferential dividend rights of outstanding preferred stock. | Preferred Dividends Calculation. Each Grifols non-voting share entitles its holder to receive a minimum annual preferred dividend out of the distributable profits at the end of each fiscal year the share is outstanding equal to €0.01 per Grifols non-voting share. | |
Preference. In any given fiscal year, Grifols will pay a preferred dividend to the holders of the Grifols non-voting shares before any dividend out of the distributable profits for such fiscal year is paid to the holders of Grifols ordinary shares. | ||
No Accrual of Payments. The preferred dividend on all the Grifols non-voting shares outstanding at the end of a fiscal year shall be paid only if the aggregate preferred dividend does not exceed the distributable profits of that fiscal year. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
If, during a fiscal year, Grifols has not obtained sufficient distributable profits to pay in full, out of those profits, the preferred dividend on all the Grifols non-voting shares outstanding, the preferred dividend amount exceeding the distributable profits obtained by Grifols will not be paid and will not be accumulated as dividend payable in the future. | ||
Lack of payment, total or partial, of the preferred dividend during a fiscal year due to insufficient distributable profits to pay in full the preferred dividend for that fiscal year, will not cause the Grifols non-voting shares to recover any voting rights. | ||
Other Dividends | ||
Each Grifols non-voting share is entitled to receive, in addition to the preferred dividend referred to above, the same dividends and other distributions (in each case, whether in cash, securities of Grifols or any of its subsidiaries, or any other securities, assets or rights) as one Grifols ordinary share. Each Grifols non-voting share will be treated as one Grifols ordinary share for the purpose of any dividends and other distributions made on Grifols ordinary shares, including as to the timing of the declaration and payment of any such dividend or distribution. | ||
APPRAISAL RIGHTS | ||
Under Delaware law, a stockholder of a Delaware corporation is generally entitled to demand appraisal of the fair value of his or her shares in the event the corporation is a party to a merger or consolidation, subject to specified exceptions. Delaware law does not confer appraisal rights to stockholders if the corporation’s shares are: • listed on a national securities exchange; • held of record by more than 2,000 holders; or • shares of the corporation surviving or resulting from the merger or consolidation if the merger did not require the vote of the stockholders of the surviving or resulting corporation for the approval of the merger under Delaware law. | Rights of Separation. Under the Spanish Companies Law, holders of non-voting shares generally do not have the right to require a company to purchase his or her shares. However, in very limited circumstances (such as the substitution of the corporate purpose), holders of Grifols non-voting shares have the right to request Grifols to purchase his or her shares. | |
Even if these exceptions to appraisal rights apply, the holders of such shares will have appraisal rights if they are required to accept in the merger any consideration in exchange for such shares other than: | ||
• shares of stock of the corporation surviving or resulting from the merger or consolidation; | ||
• shares of stock of any other corporation that will be either listed on a national securities exchange or held of record by more than 2,000 holders; | ||
• cash in lieu of fractional shares; or | ||
• any combination of the foregoing. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
The certificate of incorporation of a Delaware corporation may provide appraisal rights for stockholders upon an amendment to a corporation’s certificate of incorporation, any merger in which the corporation is a constituent or a sale of all or substantially all of the assets of the corporation. Talecris’ certificate of incorporation does not so provide. | ||
PREEMPTIVE RIGHTS | ||
The holders of Talecris common stock do not have preemptive rights to subscribe for a proportionate share of any additional securities issued by Talecris before such securities are offered to others. | Subject to the exceptions outlined in “Description of Grifols’ Share Capital — Grifols Non-Voting Shares (Class B shares) — Subscription rights”, each Grifols non-voting share entitles its holder to the same rights (including preferential subscription right (derecho de suscripción preferente), and the free allotment right (derecho de asignación gratuita)) as one Grifols ordinary share in connection with any issuance, granting or sale of (i) any shares in Grifols, (ii) any rights or other securities exercisable for, exchangeable or convertible into shares in Grifols or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in Grifols. | |
ATTENDANCE AND VOTING AT MEETINGS OF SHAREHOLDERS | ||
Every common stockholder of record as of the applicable record date has the right to notice of and to vote, in person or by proxy, at any stockholders’ meeting. | Meetings of shareholders. Each holder of the Grifols non-voting shares is entitled to attend all general shareholders meetings of Grifols. | |
Holders of the Grifols non-voting shares generally do not have the right to vote at those meetings although the approval by a majority of outstanding Grifols non-voting shares is required for certain matters as indicated above under the caption “— Voting Rights.” | ||
Separate vote. In the event that approval by the majority of outstanding Grifols non-voting shares is required for an extraordinary matter as set forth under the caption “— Voting Rights,” the matter may be put to a vote of holders of Grifols non-voting shares: (i) at the same shareholders’ meeting at which the matter is submitted for approval to the ordinary shareholders, but in a separate vote, or (ii) at a meeting of holders of Grifols non-voting shares convened and held in accordance with the procedures applicable to Grifols general shareholders meetings. | ||
Registration. Under both the Spanish Companies Law and the Grifols’ ByLaws, only holders of Grifols non-voting shares who have their Grifols non-voting shares duly registered in the book-entry records maintained by Iberclear and its member entities at least five days prior to the day on which a meeting is scheduled to be held may attend at such meeting and, where applicable, vote at such meeting. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
SPECIAL MEETINGS OF SHAREHOLDERS | ||
For as long as Talecris Holdings, its affiliates or any person who is an express assignee or designee of Talecris Holdings owns at least 30% of the outstanding shares of Talecris common stock, special meetings of the stockholders may be called at any time by: (i) the Chairman of the Talecris Board of Directors; (ii) the Talecris Board of Directors pursuant to a resolution approved by a majority of the whole Talecris Board of Directors; or (iii) any controlling stockholder who, together with its affiliates, owns more than 30% of the outstanding shares, or any director who is employed by such a controlling stockholder. After Talecris Holdings, its affiliates or any person who is an express assignee or designee of Talecris Holdings ceases to own at least 30% of the outstanding shares of Talecris common stock, special meetings of stockholders may be called by (i) the Chairman of the Talecris Board of Directors; or (ii) the Talecris Board of Directors pursuant to a resolution approved by a majority of the whole Talecris Board of Directors. | Each holder of the Grifols non-voting shares is entitled to attend all extraordinary general shareholders meetings of Grifols. Holders of the Grifolsnon-voting shares generally do not have the right to vote at those meetings although the approval by a majority of the outstanding Grifols non-voting shares is required for the extraordinary matters set forth under the caption “—Voting Rights”. Extraordinary general shareholders meetings may be called from time to time: (i) by Grifols’ Board of Directors whenever the Board of Directors considers it advisable for the Grifols’ interests, or (ii) if so requested by shareholders representing at least 5% of the outstanding share capital of Grifols. | |
SHAREHOLDER PROPOSALS AND NOMINATIONS | ||
Talecris’ bylaws establish procedures that stockholders must follow to nominate persons for election to the Talecris Board of Directors. In the case of an election of directors at an annual meeting of stockholders, the stockholder making the nomination, other than Talecris Holdings, must provide written notice to the Secretary of Talecris not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting in any year is changed by more than 30 days from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be received not earlier than 120 days prior to such annual meeting and not later than the close of business on the later of (a) 90 days prior to such annual meeting and (b) ten days following the day on which notice of the date of such annual meeting was mailed or public disclosure of the d ate of such annual meeting was made, whichever first occurs. In the case of an election of directors at a special meeting of stockholders, the stockholder making the nomination, other than Talecris Holdings, must provide written notice shall to the Secretary of Talecris not earlier than 120 days prior to such special meeting and not later than the close of business on the later of (x) 90 days prior to such special meeting and (y) ten days following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. | Grifols shareholders representing at least 5% of Grifols’ share capital may request the publication of a supplement to the notice of a general shareholders meeting, including a request for one or more additional items to be put on the agenda. This right must be exercised by means of a verifiable notice which must be received at the registered office of Grifols within five days of the publication of the original notice of the meeting. The supplement to the notice shall be published at least 15 days in advance of the date set for the general shareholders meeting. In addition, under the Spanish Companies Law, Grifols shareholders holding Grifols voting shares, in aggregate, equal to or greater than the result of dividing the total voting share capital (i.e. excluding that part attributable to Grifols non-voting shares) by the number of directors, have the right to appoint a corresponding proportion of the members of the Board of Directors. Holders of the Grifols non-voting shares do no t have the right to vote on any resolution regarding the appointment of directors. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Other matters proposed by stockholders to be placed on the agenda for consideration at an annual meeting of stockholders must be made by notice in writing, delivered to the Secretary of Talecris not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting in any year is changed by more than 30 days from the first anniversary of the preceding year’s annual meeting, a shareholder’s notice must be so received not earlier than 120 days prior to such annual meeting and not later than the close of business on the later of (a) 90 days prior to such annual meeting and (b) ten days following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. | ||
SHAREHOLDER SUITS | ||
Under the DGCL a stockholder may bring a derivative action in Delaware on behalf of, and for the benefit of, the corporation provided that, the stockholder must state in his or her complaint that he or she was a stockholder of the corporation at the time of the transaction that is the subject of the complaint, and the stockholder must first make demand on the corporation that it bring an action and the demand be refused, unless it is shown that the demand would have been futile. | Under the Spanish Companies Law, a company is entitled to bring a corporate action for liability (acción social de responsabilidad) against its directors following a resolution passed by the company’s general shareholders meeting for such purposes. Such a resolution may be presented and voted on at any general shareholder meeting even if it is not on the agenda for the meeting. Under the Spanish Companies Law, however, shareholders representing at least 5% of the share capital of the company may also jointly initiate such action in any of the following circumstances: | |
• the directors of Grifols have not called a general shareholders meeting to vote on such action following a request of shareholders representing at least 5% of the share capital of Grifols; | ||
• Grifols has not initiated the action within one month of the passing by the general shareholders meeting of the resolution approving such action; or | ||
• the general shareholders meeting has passed a resolution against bringing the corporate action for liability. | ||
Moreover, each holder of the Grifols non-voting shares whose interests have been directly harmed by the acts or resolutions passed by the directors may initiate individual proceedings against the directors seeking remedy or compensation for such direct individual damages(acción individual de responsabilidad). |
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Talecris Common Shares | Grifols Non-Voting Shares | |
RIGHTS OF INSPECTION | ||
Under Delaware law, stockholders have the right, for any proper purpose, to examine during usual business hours the share register, books and records of account and records of the proceedings of the stockholders and directors, and to make copies or extracts of such documents. Any stockholders desiring to make such an inspection must provide a written demand to do so under oath and must state the reason for the inspection. | Under the Spanish Companies Law, a shareholder has the right to: • obtain a certificate of the resolutions adopted by the general shareholders meetings of Grifols, which must be duly recorded in Grifols’ minute books; | |
• request any information regarding the issues included in the agenda of a general shareholders meetings both: (i) in writing, up to and including the day of the general shareholders meeting; and (ii) verbally during the meeting. Grifols directors must provide the requested information unless it is inappropriate to do so in accordance with law and, in particular, if in the opinion of the Chairman of the Board of Directors disclosure of the requested information may damage the interests of Grifols. However, Grifols directors cannot rely on this exception if the request is supported by shareholders representing at least 25% of Grifols’ share capital. As Grifols is a listed company, shareholders may also request, up to and including the day of the meeting, further details on any information available to the public that Grifols has submitted to the CNMV since the last general shareholders meeting; | ||
• inspect the annual accounts that are to be approved at an annual general shareholders meeting; and | ||
• inspect the compulsory reports and information that the Grifols Board of Directors must provide prior to certain actions (such as any amendment of the ByLaws). | ||
Apart from the general information rights described above, holders of non-voting shares may not inspect Grifols’ documents, contracts, books or information. | ||
DISCLOSURE OF INTERESTS | ||
Under U.S. federal securities laws, stockholders of Talecris reaching certain stock ownership levels must disclose that fact and provide extensive background information in filings with the SEC. Under U.S. federal securities laws, every officer or director of Talecris, as well as every person owning more than 10% of any class of Talecris’ securities registered under the Exchange Act, must file with the SEC and NASDAQ, an initial report of its holdings of all of such securities, and a further report after there has been any change in such holdings. | Grifols non-voting shares are not subject to the Spanish securities rules on disclosure of significant voting shareholdings and interests. A summary of those rules applicable to Grifols ordinary shares is set forth in the section entitled “Description of Grifols’ Share Capital — Grifols Ordinary Shares (Class A shares) — Reporting Requirements.” |
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In addition, Talecris must furnish the following information with respect to any person, including any group, who is known to Talecris to be the beneficial owner of more than five percent of any class of its voting securities: (1) title of class; (2) the name and address of the beneficial owner; (3) amount and nature of beneficial ownership; and (4) percent of class owned. | ||
Under federal securities laws, Talecris has a duty to describe any arrangements known to it, including any pledge by any person of its securities, the operation of which may at a subsequent date result in a change in control of Talecris. | ||
BOARD OF DIRECTORS Size and Classification of Board of Directors | ||
Talecris’ certificate of incorporation provide that the Talecris Board of Directors shall consist of not less than three nor more than 15 members, such number of directors fixed by resolution of the board. Currently, the Talecris Board of Directors has nine directors. Talecris’ certificate of incorporation provides for a staggered Board of Directors, dividing the Talecris Board of Directors into three classes, with one class elected each year and with each director elected for a term of three years. Currently, two directors serve as Class I directors, three directors serve as Class II directors, and four directors serve as Class III directors. | Article 20 of Grifols’ ByLaws provides that the minimum number of directors is three and that the maximum is fifteen. The Grifols’ Board of Directors currently consists of eight directors, plus one vacancy. Pursuant to the merger agreement, Grifols will increase the number of directors to create an additional vacancy and will appoint two individuals designated by Talecris (see “The Merger Agreement — Board of Directors of Grifols After the Transaction”). Grifols’ ByLaws provide that the term of office of a director is five years, and directors may be reappointed. Grifols’ Board of Directors’ Regulations provide for a classified Board of Directors, dividing the members of the Board of Directors into three classes: (i) executive directors (consejeros ejecutivos), (ii) proprietary directors (consejeros externos dominicales), (iii) independent directors (consejeros externos independientes), and other directors (otros consejero s externos). | |
The number of directors as fixed in such resolutions of the board may be changed only by receiving the affirmative vote of the holders of at least 662/3% of all of the shares of Talecris then entitled to vote on such change. When the number of directors is changed, any increase or decrease in the number of directorships shall be apportioned among the classes so as to make all classes nearly as equal in number as possible. | Grifols’ Board of Directors’ Regulations provide that the Board of Directors, in exercising its duties of proposing directors for nomination to the general meeting of the shareholders and nominating directors to cover vacancies, must use best efforts to ensure that there are a majority of independent or non-executive directors on the Board of Directors, and that, in order to establish a reasonable balance between the proprietary members and the independent members, the Board of Directors, in exercising its duties of proposal and nomination, must consider the shareholding and ownership structure of Grifols, in such a way that the ratio of independent to executive members reflects the ratio of shares held by insiders and publicly held shares. |
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For further information on the composition of Grifols’ Board of Directors see the sections entitled “Directors and Executive Officers of Grifols” and “Compensation of Grifols’ Directors and Executive Officers.” | ||
Election | ||
An election of directors by the Talecris stockholders is determined by a majority of the stock having voting power present in person or represented by proxy. | Directors are generally appointed at the general shareholders meeting. As set forth under the caption ‘‘-Shareholders proposals and nominations,” holders of voting shares have the right to appoint directors in certain circumstances provided they hold a minimum percentage of shares relative to the total voting share capital. | |
Holders of Grifols non-voting shares do not have the right to vote on the appointment or dismissal of Grifols’ directors. | ||
Removal | ||
Under Talecris’ certificate of incorporation, directors may be removed from office at any time, with cause, but only by the affirmative vote of the holders of at least 662/3% of all outstanding shares of capital stock of Talecris entitled to vote for that purpose; except that if the Talecris Board of Directors recommends removal of a Talecris director to the Talecris stockholders, such removal may be effected by a majority of the outstanding shares of capital stock of Talecris entitled to vote on the election of directors at a meeting of stockholders called for that purpose. | Directors may be removed without cause at any time by the passage of the relevant resolution at a general shareholders meeting. Holders of the Grifols non-voting shares do not have the right to vote on the appointment or dismissal of Grifols’ directors. | |
Vacancies | ||
Talecris’ bylaws provide that any vacancy and newly created directorship resulting from any increase in the total number of authorized directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. Any director elected to fill a vacancy not resulting from an increase in the total number of authorized directors shall have the same remaining term as that of his or her predecessor. Any director elected to fill a vacancy resulting from an increase in the total number of authorized directors shall hold office for a term expiring at the next annual meeting of shareholders at which the term of office of the class to which such director has been elected expires, and until such director’s respective successor is elected, except in the case of death, resignation, or removal of such director. | If a director ceases to hold office prior to the expiration of the term, the Board of Directors may fill the vacancy by appointing from among Grifols shareholders, a new director to replace the outgoing director. The director so appointed will hold office until the next general shareholders’ meeting when the appointment may be (i) confirmed or (ii) revoked. This appointment will be only for the remainder of the term of the outgoing director, without prejudice to such director’s eventual election. If the Board of Directors fails to appoint a shareholder to provisionally fill a vacancy as described above, or if the shareholders resolve to revoke the appointment of a director provisionally appointed by the Board of Directors, the shareholders may appoint another person as a director to fill such vacancy. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Director Liability and Indemnification | ||
Talecris’ certificate of incorporation and bylaws provide for mandatory indemnification of directors and officers and permissive indemnification of agents and employees for certain litigation related liabilities and expenses. Directors and officers of Talecris are, and agents and employees of Talecris may be, entitled to indemnification in both third party actions and derivative actions to the fullest extent permitted by Delaware law. The DGCL prohibits indemnification where there is a court finding that the act or failure to act giving rise to the claim for indemnification constitutes willful misconduct or recklessness. | Under the Spanish Companies Law, Grifols’ directors are liable to Grifols, its shareholders and its creditors for any damage that they may cause by acts or omissions contrary to applicable law, to Grifols’ ByLaws or by any acts or omissions contrary to the duties inherent to the exercise of their office. | |
ANTI-TAKEOVER PROVISIONS Business Combinations | ||
Delaware Law. Talecris subject to Section 203 of the DGCL. Subject to certain exceptions, Section 203 prevents a publicly held Delaware corporation from engaging in a “business combination” with any “interested stockholder” for three years following the date that the person became an interested stockholder, unless the interested stockholder attained such status with the approval of the Talecris Board of Directors or unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger or consolidation involving Talecris and the “interested stockholder” and the sale of more than 10% of Talecris’ assets. In general, an “interested stockholder” is any entity or person beneficially owning 15% or more of Talecris’ outstanding voting stock and any entity or person affiliated or associated with or controlling or controlled by such entity or person. | No equivalent provision |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Fair Price Provision. Talecris’ certificate of incorporation contains what is known as a “fair price” provision. Such a measure provides that, unless a supermajority of the Talecris stockholders approve a merger or stock acquisition transaction, an acquirer who beneficially holds 20% or more of the voting power of the outstanding stock or is an affiliate of such acquirer in such a transaction is required to pay a certain set price for all shares that are acquired in the second stage of a two-stage transaction. Such second stage price is tied to the price in which shares are acquired by the acquiror in the first stage of the transaction. The fair price provision prevents discriminatory pricing in the second stage of a hostile takeover bid that could otherwise be used to pressure the Talecris stockholders to tender their shares in the first stage of such bid. The fair price provision could likely force a potential acquiror to negotiate with the Talecris Board of Directors and to offer more favorable terms to the Talecris stockholders in exchange for the removal of this provision from Talecris’ certificate of incorporation. | ||
Mandatory Tender Offer | ||
Talecris’ certificate of incorporation does not contain any provisions relating to mandatory tender offers. | Under Spanish law, mandatory public tender offers at a regulated price set forth by Spanish law must be launched for all of the voting shares of the target company or other securities that might directly or indirectly give the right to subscription thereto or acquisition thereof (including convertible and exchangeable bonds) when any person acquires control of a Spanish company listed on the Spanish Stock Exchanges. Therefore, such mandatory tender offers do not need to be extended to Grifols non-voting shares. | |
For these purposes, control of a target company is deemed to have been obtained primarily in the following circumstances: (i) any person or group of people directly or indirectly acquire 30% or more of the voting rights in the company; or (ii) any person or group of people directly or indirectly acquires less than 30% of the voting rights in the company and, within 24 months of the acquisition, that person or group of people has been responsible for the appointment of more than one-half of the target company’s board of directors. | ||
However, if the tender offer is not extended to the Grifols non-voting shares and such offer closes and is settled, holders of the Grifols non-voting shares will have the right to have their shares redeemed subject to the terms and conditions set forth under the caption ‘‘—Redemption Rights” below. |
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Redemption Rights | ||
Holders of Talecris common stock have no redemption rights. | Subject to the cut-backs described below, each holder of the Grifols non-voting shares will have the right, at the holder’s option, to require Grifols to redeem such holder’s Grifols non-voting shares if a tender offer for all or part of the outstanding Grifols shares is made and settled (in whole or in part) and the holders of the Grifols non-voting shares are not entitled to participate in such tender offer on the same terms as holders of Grifols ordinary shares, following the process set forth in the section entitled “Description of Grifols’ Share Capital — Grifols Non-Voting Shares — Redemption Rights”. | |
The number of Grifols non-voting shares redeemed shall not represent a percentage over the total Grifols non-voting shares outstanding at the time the tender offer is made in excess of the percentage that the sum of Grifols ordinary shares (i) to which the tender offer is addressed, (ii) held by the offerors in that offer; and (iii) held by persons acting in concert with the offerors or by persons having reached an agreement relating to the offer with the offerors represent over the total Grifols ordinary shares outstanding at the time the tender offer causing the redemption of the Grifols non-voting shares is made. | ||
Payment of the redemption price will be subject to Grifols’ having sufficient distributable reserves, but after a tender offer occurs and until the redemption price for the Grifols non-voting shares is paid in full, Grifols will not be able to declare or pay any dividends nor any other distributions to its shareholders (in each case, whether in cash, securities of Grifols or any of its subsidiaries, or any other securities, assets or rights). | ||
Liquidation Rights | ||
Each holder of Talecris common stock is entitled to receive, upon thewinding-up and liquidation of Talecris, proportionately all assets available for distribution to the Talecris stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. | Each holder of the Grifols non-voting shares is entitled to receive, upon the winding-up and liquidation of Grifols, an amount equal to the sum of (i) the nominal value of each Grifols non-voting share, and (ii) the share premium paid-up for such Grifols non-voting share when it was subscribed for. | |
Grifols will pay the liquidation amount to the holders of the Grifols non-voting shares before any liquidation amount is paid to the holders of Grifols ordinary shares. | ||
Each Grifols non-voting share entitles its holder to receive, in addition to the liquidation amount, the same liquidation amount that is paid to each Grifols ordinary share. |
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DUTIES OF DIRECTORS | ||
Under Delaware law, a corporation’s directors have a duty to act in good faith in a manner which they reasonably believe to be in the best interests of the corporation. In discharging that responsibility, directors owe a duty of care and a duty of loyalty to the corporation. | In accordance with Grifols’ Board of Directors’ Regulations, directors must exercise their duties with a unified purpose and apply their independent judgment, must treat all the shareholders equally and must act in the best interest of Grifols, which is to achieve the maximum economic value of the business. | |
Under Delaware law, in considering the best interests of the corporation, directors may consider to the extent they deem appropriate, the effects of any action on all groups affected, including without limitation, shareholders, employees, suppliers, customers, and communities served by the corporation, and the short-term and long-term interests of the corporation and its stock. Under Delaware law, directors are required to act with such care, including reasonable inquiry, skill and diligence, as a person of ordinary prudence would use under such circumstances. Directors are required to exercise an informed business judgment in the performance of their duties. To do so, directors must have informed themselves of all material information reasonably available to them. | Each member of the Grifols Board of Directors must comply with the duties set out in the Articles 225 to 232 of the Spanish Companies Law, in Grifols’ ByLaws and in its regulations for the general shareholders meeting and the Board of Directors. These duties are described in the section entitled “Certain Relationships and Related Party Transactions of Grifols — Director Independence,” and include the following: • Duty of diligent management, • Duty of loyalty, • Duty of confidentiality, and • Duty of inactivity. | |
GRIFOLS NEW ADS PRE-RELEASE; VOTING OF GRIFOLS NEW ADSs; AMENDMENT OF DEPOSIT AGREEMENT | ||
Not applicable. | Grifols new ADS Pre-Release. | |
The deposit agreement permits the depositary to deliver ADSs before deposit of the underlying Grifols non-voting shares. This is called a pre-release of the ADSs. The depositary may also deliver Grifols non-voting shares upon cancellation of pre-released ADSs (even if the ADSs are cancelled before the pre-release transaction has been closed out). A pre-release is closed out as soon as the underlying Grifols non-voting shares are delivered to the depositary. The depositary may receive ADSs instead of Grifols non-voting shares to close out a pre-release. The depositary may pre-release ADSs only under certain conditions. Each pre-release is subject to further indemnities and credit regulations as the depositary considers appropriate. The depositary will limit the number of ADSs that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time to time, if it thinks it is appropriate to do so. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
Voting of Grifols new ADSs. | ||
Holders of the Grifols non-voting shares generally will not have voting rights, except with respect to certain extraordinary matters. See the caption entitled “Voting Rights; Action by Written Consent” above. If Grifols asks for the holder of the ADSs to give instructions and upon timely notice from Grifols, the depositary will notify the holder of the ADS of the upcoming vote and arrange to deliver the voting materials to you. The depositary will only vote or attempt to vote as the holder of the ADS instructs. Grifols cannot assure you that you will receive the voting materials in time to ensure that you can instruct the depositary to vote the Grifols non-voting shares underlying your ADSs. In addition, the depositary and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions. | ||
Amendment of Deposit Agreement. | ||
Grifols may agree with the depositary to amend the deposit agreement and the form of ADR without the ADS holders’ consent for any reason. If an amendment adds or increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees, facsimile costs, delivery charges or similar items, including expenses incurred in connection with foreign exchange control regulations and other charges specifically payable by ADS holders under the deposit agreement, or materially prejudices a substantial existing right of ADS holders, it will not become effective for outstanding ADSs until 30 days after the depositary notifies ADS holders of the amendment. At the time an amendment becomes effective, the holders of the ADSs are considered, by continuing to hold the ADSs, to agree to the amendment and to be bound by the ADRs and the deposit agreement as amended. |
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Talecris Common Shares | Grifols Non-Voting Shares | |
TRANSACTIONS WITH INTERESTED PARTIES | ||
The DGCL generally permits transactions involving a Delaware corporation and an interested director or officer of that corporation if: • the material facts as to the director’s or officer’s relationship or interest are disclosed and a majority of disinterested directors consent to the transaction; • the material facts are disclosed as to the director’s or officer’s relationship or interest and the holders of a majority of shares entitled to vote thereon consent; or • the transaction is fair to the corporation at the time that it is authorized by the Board of Directors, a committee of the Board of Directors or the stockholders. As a U.S. public company, however, Talecris is prohibited from directly or indirectly extending or maintaining credit, or arranging for the extension of credit or renewing any extension of credit, in the form of a personal loan to or for any directors or executive officers under U.S. federal securities laws. | In accordance with Grifols’ Board of Directors’ Regulations, the Grifols Board of Directors formally reserves the right to be notified of and authorize any transactions with a significant shareholder. No related person transactions may be authorized unless a report by the Audit Committee has been issued in advance. A general authorization setting forth the terms of the transaction is allowed for ordinary transactions. Directors may not directly or indirectly enter into professional or commercial transactions with Grifols unless he or she first reports the conflict of interest, and then the Board of Directors, subject to a prior report from the Appointments and Remuneration Committee, approves the transaction. Grifols’ Board of Directors’ Regulations (i) deems it a violation of a director’s duty of loyalty when, with prior knowledge he or she allows, or does not reveal the existence of, a related party transaction, and such related party transaction has not be en subject to the aforementioned conditions and board of director approval and (ii) states that a director cannot either directly or indirectly take advantage of a company business opportunity for himself or herself or for a third party, unless the Grifols Board of Directors, after being presented with the business opportunity, with a prior report from the Appointments and Remuneration Committee and being uninfluenced by the interested director, decides not to pursue it and authorizes the interested director to pursue such opportunity. See the section entitled “Certain Relationships and Related Party Transactions of Grifols” for further information. | |
REPORTING REQUIREMENTS | ||
As a U.S. reporting company, Talecris must file with the SEC, among other reports and notices: | As a foreign private issuer, Grifols must file with the SEC: | |
• an annual report onForm 10-K within 60 days after the end of each fiscal year; • quarterly reports onForm 10-Q within 40 days after the end of each of the first three quarters of the fiscal year; and • current reports onForm 8-K upon the occurrence of specified corporate events. In addition to the foregoing, U.S. federal securities laws require Talecris to mail the following documents to its stockholders in advance of each annual meeting: • an annual report containing audited financial statements; and | • annual reports on Form 20-F and • and interim reports on Form 6-K. Reports on Form 6-K must contain any information not included in the issuer’s latest Form 20-F that the issuer: (1) makes or is required to make public in its home country, (2) files or is required to file with a non-U.S. securities exchange on which its securities are traded and which was made public by that securities exchange or (3) distributed or is required to distribute to its security holders, where, in the case of (1), (2) or (3), such information is material to the foreign issuer and its subsidiaries, taken as a whole. | |
• a proxy statement that complies with the requirements of the Exchange Act. |
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• | the issuance of bonds; | |
• | an increase or reduction of the share capital, | |
• | the transformation of Grifols (change in corporate nature); | |
• | a merger, de-merger, split, spin-off and other structural changes subject to Spanish Law 3/2009; | |
• | any other amendment of Grifols’ ByLaws; and | |
• | a dissolution. |
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• | Any resolution (i) authorizing Grifols or any subsidiary of Grifols to repurchase or acquire any Grifols ordinary shares, except for pro rata repurchases available equally to holders of the Grifols non-voting shares on the same terms and at the same price as offered to holders of Grifols ordinary shares; or (ii) approving the redemption of any shares of Grifols and any share capital reductions (through repurchases, cancellation of shares or otherwise) other than (a) those redemptions required by law and (b) those redemptions which affect equally Grifols ordinary shares and the Grifols non-voting shares and in which each Grifols non-voting share is treated the same as each Grifols ordinary share in such transaction; | |
• | Any resolution approving the issuance, granting or sale (or authorizing the Grifols Board of Directors to issue, grant or sell) (i) any shares in Grifols, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares of Grifols or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities of Grifols, except if (a) each Grifols non-voting share is treated the same as one Grifols ordinary share in the relevant issuance, grant or sale and, therefore, has preferential subscription or allotment rights in the relevant issuance, grant or sale to the same extent, if any, as a Grifols ordinary share or (b) if the issuance is made in accordance with the subscription rights described in the section entitled “— Subscription Rights” below; | |
• | Any resolution approving unconditionally or not (i) a transaction subject to Law 3/2009 (including, without limitation, a merger, split-off, cross-border redomiciliation or global assignment of assets and liabilities), |
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except if in such transaction each Grifols non-voting share is treated the same as one Grifols ordinary share; or (ii) the dissolution orwinding-up of Grifols, except where such resolution is required by law; |
• | Any resolution for the delisting of any Grifols shares from any stock exchange; and | |
• | Generally, any resolution and any amendment of Grifols’ ByLaws which directly or indirectly adversely affects the rights, preferences or privileges of the Grifols non-voting shares (including any resolution that adversely affects the Grifols non-voting shares relative to the Grifols ordinary shares or that positively affects the Grifols ordinary shares relative to the Grifols non-voting shares, or that affects the provisions in Grifols’ ByLaws relating to the Grifols non-voting shares). |
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• | Grifols will, within ten days of the date on which the redemption event occurred (i.e. the date on which the triggering tender offer settled), publish in the Commercial Registry Gazette, the Spanish Stock Exchanges Gazettes and in at least two of the newspapers with widest circulation in Barcelona an announcement informing the holders of Grifols non-voting shares of the redemption event and the process for the exercise of redemption rights in connection with such redemption event; | |
• | Each holder of Grifols non-voting shares will be entitled to exercise its redemption right for two months from the first date of settlement of the tender offer triggering the redemption right by notifying their decision to Grifols. Grifols will ensure that mechanisms are in place so that the notification of the exercise of the redemption right may be made through Iberclear; | |
• | The redemption price to be paid by Grifols for each Grifols non-voting share for which the redemption right has been exercised will be the sum of (i) the amount in euros of the highest consideration paid in the tender offer triggering the redemption right plus (ii) interest on the amount referred to in (i), from the date such tender offer is first settled until the date of full payment of the redemption price, at a rate equal to1-year Euribor plus 300 basis points. For the purposes of this calculation, the amount in euros corresponding to any non-cash consideration paid in the tender offer will be the market value of such non-cash consideration as of the date the tender offer is first settled. The calculation of such market value shall be supported by at least two independent experts designated by Grifols from auditing firms of international repute; | |
• | Grifols will, within 40 days of the date on which the period for notification of the exercise of redemption rights following a tender offer lapses, take all the necessary actions to (i) effectively pay the redemption price for the Grifols non-voting shares for which the redemption right has been exercised and complete the capital reduction required for the redemption; and (ii) reflect the amendment to Article 6 of the Grifols ByLaws (related to share capital) deriving from the redemption. |
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• | directly, (1) by having a certificated ADR evidencing a specific number of Grifols ADSs registered in your name, or (2) by having an uncertificated (book-entry) ADR through an account established by the depositary in your name reflecting the registration of Grifols ADSs directly on the books of the depositary (commonly referred to as the direct registration system or DRS), or | |
• | indirectly, through your broker or other financial institution. |
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Persons Depositing or Withdrawing Shares Must Pay: | For: | |
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Issuance of Grifols ADSs, including issuances resulting from a distribution of shares or rights or other property. | |
Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates. | ||
$2.00 (or less) per 100 ADSs (or portion of 100 ADSs) | Distribution of cash proceeds, including cash dividends or sale of rights and other entitlements. | |
$2.00 (or less) per 100 ADSs (or portion of 100 ADSs) per calendar year, provided that this fee, when combined with the fee for distribution of cash proceeds, including cash dividends or sell of rights and other entitlements, shall not exceed $2.00 (or less) per 100 ADSs (or portion of 100 ADSs) in any calendar year | Depositary operation and maintenance costs. | |
Annual fee of $1.00 per 100 ADSs | Inspections of the relevant share register | |
Registration or transfer fees | • Transfer and registration of Grifols non-voting shares on its share register to or from the name of the depositary or its agent when you deposit or withdraw Grifols non-voting shares. | |
Expenses of the depositary | • Cable, telex and facsimile transmissions (when expressly provided in the deposit agreement). | |
• Converting foreign currency to U.S. dollars. |
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Persons Depositing or Withdrawing Shares Must Pay: | For: | |
Taxes and other governmental charges the depositary or the custodian has to pay on any ADS or share underlying an ADS, including any applicable interest and penalties thereon and any share transfer or other taxes or governmental charges, for example, stock transfer taxes, stamp duty or withholding taxes | • As necessary. | |
Any fees and expenses incurred by the depositary in connection with the conversion of a foreign currency in compliance with the applicable exchange control and other regulations, and the delivery of deposited securities, including any fees of a central depository, and any additional fees, charges, costs, or expenses, that may be incurred by the depositary from time to time | • As necessary. | |
Any additional fees, charges, costs or expenses that may be incurred by the depositary from time to time | • As necessary. |
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If Grifols: | Then: | |||
• | Change the nominal or par value of the Grifols non-voting shares | The cash, shares or other securities received by the depositary will become deposited securities. | ||
• | Reclassify, split up or consolidate any of the deposited securities | Each ADS will automatically represent its equal share of the new deposited securities. | ||
• | Distribute securities on the Grifols non-voting shares that are not distributed to you or | The depositary may distribute some or all of the cash, shares or other securities it received. It may also deliver new ADSs or ask you to surrender your outstanding ADRs in exchange for new ADRs identifying the new deposited securities. | ||
• | Recapitalize, reorganize, merge, liquidate, sell all or substantially all of its assets, or take any similar action |
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• | are only obligated to take the actions specifically set forth in the deposit agreement without gross negligence or willful misconduct; | |
• | are not liable if either of them is prevented or delayed by law or circumstances beyond their control from performing its obligations under the deposit agreement, including, without limitation, requirements of any present or future law, regulation, governmental or regulatory authority or stock exchange of any applicable jurisdiction, any present or future provisions of Grifols’ articles of association, on account of possible civil or criminal penalties or restraint, any provisions of or governing the deposited securities or any act of God, war or other circumstances beyond their control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure) as set forth in the deposit agreement; | |
• | are not liable if either Grifols or the depositary exercises, or fails to exercise, discretion permitted under the deposit agreement; | |
• | are not liable for the inability of any holder of ADSs to benefit from any distribution on deposited securities that is not made available to holders of ADSs under the terms of the deposit agreement; | |
• | may rely upon any documents they believe in good faith to be genuine and to have been signed or presented by the proper party; | |
• | disclaim any liability for inability of any holder to benefit from any distribution, offering, right or other benefit made available to holders of deposited securities but not made available to holders of Grifols ADSs; | |
• | disclaim any liability for any action/inaction in reliance on the advice or information of legal counsel, accountants, any person presenting Grifols non-voting shares for deposit, holders and beneficial owners (or authorized representatives) of ADSs, or any person believed in good faith to be competent to give such advice or information; and | |
• | disclaim any liability for any indirect, special, punitive or consequential damages. |
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• | payment of stock transfer or other taxes or other governmental charges and transfer or registration fees charged by third parties for the transfer of any Grifols non-voting shares or other deposited securities and payment of the applicable fees, charges and expenses of the depositary; | |
• | satisfactory proof of the identity and genuineness of any signature or other information it deems necessary; and | |
• | compliance with regulations it may establish, from time to time, consistent with the deposit agreement, including presentation of transfer documents. |
• | when temporary delays arise because: (1) the depositary has closed its transfer books or Grifols has closed its transfer books; (2) the transfer of Grifols non-voting shares is blocked to permit voting at a shareholders’ meeting; or (3) Grifols is paying a dividend on its Grifols non-voting shares; | |
• | when you owe money to pay fees, taxes and similar charges; or | |
• | when it is necessary to prohibit withdrawals in order to comply with any laws or governmental regulations that apply to ADSs or to the withdrawal of Grifols non-voting shares or other deposited securities. |
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• | a citizen or resident of the United States; | |
• | a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized under the laws of the United States or any of its political subdivisions; | |
• | a trust that (1) is subject to the supervision of a court within the United States and the control of one or more U.S. persons or (2) has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person; or | |
• | an estate that is subject to U.S. federal income tax on its income regardless of its source. |
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Avinguda de la Generalitat, 152-158
Parc de Negocis Can Sant Joan
08174 Sant Cugat del Vallès, 08174, Barcelona, Spain
P.O. Box 110526
4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Attn: Investor Relations
Telephone:(919) 316-6300
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Page | ||||
Unaudited Condensed Consolidated Interim Financial Statements: | ||||
F-2 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-8 | ||||
Audited Consolidated Financial Statements: | ||||
F-18 | ||||
F-19 | ||||
F-21 | ||||
F-22 | ||||
F-23 | ||||
F-24 | ||||
F-25 | ||||
F-100 | ||||
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F-108 |
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at 30 June 2010 and 31 December 2009
30/06/10 | 31/12/09 | |||||||
(Unaudited) | ||||||||
(Expressed in | ||||||||
thousands of euros) | ||||||||
ASSETS | ||||||||
Non-current assets | ||||||||
Intangible assets | ||||||||
Goodwill (note 6) | 201,317 | 174,000 | ||||||
Other intangible assets (note 7) | 77,611 | 69,385 | ||||||
Total intangible assets | 278,928 | 243,385 | ||||||
Property, plant and equipment (note 7) | 423,096 | 371,705 | ||||||
Investments in equity accounted investees (note 3) | 1,196 | 383 | ||||||
Non-current financial assets | 8,188 | 3,731 | ||||||
Deferred tax assets | 33,859 | 33,395 | ||||||
Total non-current assets | 745,267 | 652,599 | ||||||
Current assets | ||||||||
Inventories | 545,277 | 484,462 | ||||||
Trade and other receivables | ||||||||
Trade receivables (note 8) | 194,259 | 207,840 | ||||||
Other receivables | 41,574 | 39,540 | ||||||
Current income tax assets | 24,337 | 7,802 | ||||||
Trade and other receivables | 260,170 | 255,182 | ||||||
Other current financial assets | 8,547 | 8,217 | ||||||
Other current assets | 11,776 | 7,345 | ||||||
Cash and cash equivalents | 350,140 | 249,372 | ||||||
Total current assets | 1,175,910 | 1,004,578 | ||||||
Total assets | 1,921,177 | 1,657,177 | ||||||
F-2
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30/06/10 | 31/12/09 | |||||||
(Unaudited) | ||||||||
(Expressed in thousands | ||||||||
of euros) | ||||||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Share capital | 106,532 | 106,532 | ||||||
Share premium | 121,802 | 121,802 | ||||||
Reserves | ||||||||
Accumulated gains | 350,319 | 264,039 | ||||||
Other reserves | 53,368 | 50,864 | ||||||
Total reserves | 403,687 | 314,903 | ||||||
Own shares | (1,927 | ) | (677 | ) | ||||
Interim dividend | 0 | (31,960 | ) | |||||
Profit for the year attributable to the Parent | 66,408 | 147,972 | ||||||
Total equity | 696,502 | 658,572 | ||||||
Available-for-sale financial assets | — | — | ||||||
Cash flow hedges | (1,849 | ) | (1,948 | ) | ||||
Translation differences | (16,825 | ) | (90,253 | ) | ||||
Other comprehensive income | (18,674 | ) | (92,201 | ) | ||||
Equity attributable to the Parent (note 9)) | 677,828 | 566,371 | ||||||
Minority interest | 12,972 | 12,157 | ||||||
Total equity | 690,800 | 578,528 | ||||||
Liabilities | ||||||||
Non-current liabilities | ||||||||
Grants | 2,309 | 2,311 | ||||||
Provisions | 1,283 | 1,232 | ||||||
Non-current financial liabilities | ||||||||
Loans and borrowings, bonds and other marketable securities | 742,106 | 703,186 | ||||||
Other financial liabilities | 12,075 | 12,552 | ||||||
Total non-current financial liabilities (note 10) | 754,181 | 715,738 | ||||||
Deferred tax liabilities | 65,029 | 60,325 | ||||||
Total non-current liabilities | 822,802 | 779,606 | ||||||
Current liabilities | ||||||||
Provisions | 4,460 | 4,702 | ||||||
Current financial liabilities | ||||||||
Loans and borrowings, bonds and other marketable securities | 146,157 | 113,991 | ||||||
Other financial liabilities | 56,930 | 12,230 | ||||||
Total current financial liabilities (note 10) | 203,087 | 126,221 | ||||||
Trade and other payables | ||||||||
Suppliers | 127,720 | 120,909 | ||||||
Other payables | 16,296 | 17,832 | ||||||
Current income tax liabilities | 23,391 | 3,258 | ||||||
Total trade and other payables | 167,407 | 141,999 | ||||||
Other current liabilities | 32,621 | 26,121 | ||||||
Total current liabilities | 407,575 | 299,043 | ||||||
Total liabilities | 1,230,377 | 1,078,649 | ||||||
Total equity and liabilities | 1,921,177 | 1,657,177 | ||||||
F-3
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30/06/10 | 30/06/09 | |||||||
(Expressed in | ||||||||
thousands of euros) | ||||||||
(Unaudited) | ||||||||
Revenues (note 5) | 487,809 | 470,531 | ||||||
Changes in inventories of finished goods and work in progress | 41,209 | 60,615 | ||||||
Self-constructed non-current assets | 16,051 | 15,094 | ||||||
Supplies | (157,107 | ) | (162,090 | ) | ||||
Other operating income | 631 | 861 | ||||||
Personnel expenses | (141,972 | ) | (138,809 | ) | ||||
Other operating expenses | (100,298 | ) | (106,152 | ) | ||||
Amortisation and depreciation (note 7) | (21,434 | ) | (19,124 | ) | ||||
Non-financial and other capital grants | 550 | 1,034 | ||||||
Impairment and gains/(losses) on disposal of fixed assets | 681 | (328 | ) | |||||
Results from operating activities | 126,120 | 121,632 | ||||||
Finance income | 2,179 | 4,799 | ||||||
Finance expenses (notes 8 & 11) | (25,285 | ) | (10,447 | ) | ||||
Change in fair value of financial instruments (note 11) | (15,404 | ) | (1,197 | ) | ||||
Exchange losses | 1,970 | 211 | ||||||
Finance income and expense | (36,540 | ) | (6,634 | ) | ||||
Share of profit of equity accounted investees | (728 | ) | 10 | |||||
Profit before income tax from continuing operations | 88,852 | 115,008 | ||||||
Income tax expense (note 12) | (23,022 | ) | (32,860 | ) | ||||
Profit after income tax from continuing operations | 65,830 | 82,148 | ||||||
Profit attributable to equity holders of the Parent | 66,408 | 81,700 | ||||||
Profit attributable to minority interest | (578 | ) | 448 | |||||
Consolidated profit for the period | 65,830 | 82,148 | ||||||
Basic earnings per share (Euros) | 0.31 | 0.39 | ||||||
Diluted earnings per share (Euros) | 0.31 | 0.39 |
F-4
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30/06/10 | 30/06/09 | |||||||
(Expressed in | ||||||||
thousands of euros) | ||||||||
(Unaudited) | ||||||||
Consolidated comprehensive income for the period | 65,830 | 82,148 | ||||||
Income and expenses generated during the period | ||||||||
Measurement of financial instruments | 0 | (13 | ) | |||||
Available-for-sale financial assets | 0 | (13 | ) | |||||
Tax effect | 0 | 0 | ||||||
Translation differences | 74,874 | 271 | ||||||
Income and expenses generated during the period | 74,874 | 258 | ||||||
Income and expense recognised in the income statement: | ||||||||
Cash flow hedges | 99 | 0 | ||||||
Cash flow hedges | 159 | 0 | ||||||
Tax effect | (60 | ) | 0 | |||||
Income and expense recognised in the income statement: | 99 | 0 | ||||||
Total comprehensive income for the period | 140,803 | 82,406 | ||||||
Total comprehensive income attributable to the Parent | 139,935 | 81,926 | ||||||
Total comprehensive income attributable to minority interests | 868 | 480 | ||||||
Total comprehensive income for the period | 140,803 | 82,406 | ||||||
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30/06/10 | 30/06/09 | |||||||
(Expressed in thousands of euros) | ||||||||
(Unaudited) | ||||||||
Cash flows from operating activities | ||||||||
Profit before tax | 88,852 | 115,008 | ||||||
Adjustments for: | 53,782 | 26,657 | ||||||
Amortisation and depreciation | 21,434 | 19,124 | ||||||
Other adjustments: | 32,348 | 7,533 | ||||||
Losses / (Profit) on equity accounted investments | 728 | (10 | ) | |||||
Exchange differences | (1,970 | ) | (211 | ) | ||||
Net provision charges | 129 | 873 | ||||||
(Profit) / loss on disposal of fixed assets | (681 | ) | 328 | |||||
Government grants taken to income | (550 | ) | (1,034 | ) | ||||
Finance expense / income | 33,386 | 6,879 | ||||||
Other adjustments | 1,306 | 708 | ||||||
Changes in capital and assets | 13,700 | (62,940 | ) | |||||
Change in inventories | (11,982 | ) | (60,282 | ) | ||||
Change in trade and other receivables | 20,239 | (32,202 | ) | |||||
Change in current financial assets and other current assets | (3,875 | ) | (1,652 | ) | ||||
Change in current trade and other payables | 9,318 | 31,196 | ||||||
Other cash flows from operating activities | (34,465 | ) | (24,559 | ) | ||||
Interest paid | (19,801 | ) | (9,347 | ) | ||||
Interest recovered | 3,861 | 4,659 | ||||||
Income tax (paid) | (18,525 | ) | (19,871 | ) | ||||
Net cash from operating activities | 121,869 | 54,166 | ||||||
Cash flows from investing activities | ||||||||
Payments for investments | (56,997 | ) | (67,749 | ) | ||||
Group companies and business units (note 3) | (3,727 | ) | (15,826 | ) | ||||
Property, plant and equipment and intangible assets | (49,151 | ) | (51,774 | ) | ||||
Property, plant and equipment | (43,146 | ) | (44,705 | ) | ||||
Intangible assets | (6,005 | ) | (7,069 | ) | ||||
Other financial assets | (4,119 | ) | (149 | ) | ||||
Proceeds from the sale of investments | 2,863 | 809 | ||||||
Property, plant and equipment | 2,863 | 809 | ||||||
Net cash used in investing activities | (54,134 | ) | (66,940 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from and payments for equity instruments | (1,250 | ) | (22,801 | ) | ||||
Acquisition of treasury shares | (1,250 | ) | (22,860 | ) | ||||
Disposal of treasury shares | 0 | 59 | ||||||
Proceeds from and payments for financial liability instruments | (8,671 | ) | 95,818 | |||||
Issue | 51,067 | 106,320 | ||||||
Redemption and repayment | (59,738 | ) | (10,502 | ) | ||||
Dividends and interest on other equity instruments paid | (53 | ) | (48,746 | ) | ||||
Other cash flows from financing activities | 323 | 0 | ||||||
Other amounts received from financing activities | 323 | 0 | ||||||
Net cash (used in) / from financing activities | (9,651 | ) | 24,271 | |||||
Effect of exchange rate fluctuations on cash | 42,684 | (69 | ) | |||||
Net increase in cash and cash equivalents | 100,768 | 11,428 | ||||||
Cash and cash equivalents at beginning of the period | 249,372 | 6,368 | ||||||
Cash and cash equivalents at end of period | 350,140 | 17,796 |
F-6
Table of Contents
Attributable to Equity Holders of the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||
Available-for | ||||||||||||||||||||||||||||||||||||||||||||||||
Profit | Sale | Equity | ||||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Attributable | Interim | Treasury | Translation | Cash Flow | Financial | Attributable | Minority | |||||||||||||||||||||||||||||||||||||||
Capital | Premium | Reserves | to Parent | Dividend | Shares | Differences | Hedges | Assets | to Parent | Interests | Equity | |||||||||||||||||||||||||||||||||||||
(Expressed in thousands of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at 31 December 2008 | 106,532 | 121,802 | 247,669 | 121,728 | 0 | (33,087 | ) | (84,457 | ) | 0 | (158 | ) | 480,029 | 1,250 | 481,279 | |||||||||||||||||||||||||||||||||
Translation differences | — | — | — | — | — | — | 239 | — | — | 239 | 32 | 271 | ||||||||||||||||||||||||||||||||||||
Available-for-sale financial assets Gains/(losses) | — | — | — | — | — | — | — | (13 | ) | (13 | ) | — | (13 | ) | ||||||||||||||||||||||||||||||||||
Other comprehensive income for the period | 0 | 0 | 0 | 0 | 0 | 0 | 239 | 0 | (13 | ) | 226 | 32 | 258 | |||||||||||||||||||||||||||||||||||
Profit/(loss) for the year | — | — | — | 81,700 | — | — | — | — | — | 81,700 | 448 | 82,148 | ||||||||||||||||||||||||||||||||||||
Total comprehensive income for the period | 0 | 0 | 0 | 81,700 | 0 | 0 | 239 | 0 | (13 | ) | 81,926 | 480 | 82,406 | |||||||||||||||||||||||||||||||||||
Operations with own shares | — | — | — | — | — | (22,803 | ) | — | — | (22,803 | ) | — | (22,803 | ) | ||||||||||||||||||||||||||||||||||
Business Combinations | — | — | — | — | — | — | — | — | 0 | 13,129 | 13,129 | |||||||||||||||||||||||||||||||||||||
Distribution of 2008 profit | ||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | — | — | 73,037 | (73,037 | ) | — | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Dividends | — | — | — | (48,691 | ) | — | — | — | — | — | (48,691 | ) | (55 | ) | (48,636 | ) | ||||||||||||||||||||||||||||||||
Operations with equity holders or owners | 0 | 0 | 73,037 | (121,728 | ) | 0 | (22,803 | ) | 0 | 0 | 0 | (71,494 | ) | 13,074 | (58,420 | ) | ||||||||||||||||||||||||||||||||
Balances at 30 June 2009 | 106,532 | 121,802 | 320,706 | 81,700 | 0 | (55,890 | ) | (84,218 | ) | 0 | (171 | ) | 490,461 | 14,804 | 505,265 | |||||||||||||||||||||||||||||||||
Balances at 31 December 2009 | 106,532 | 121,802 | 314,903 | 147,972 | (31,960 | ) | (677 | ) | (90,253 | ) | (1,948 | ) | 0 | 566,371 | 12,157 | 578,528 | ||||||||||||||||||||||||||||||||
Translation differences | — | — | — | — | — | — | 73,428 | — | — | 73,428 | 1,446 | 74,874 | ||||||||||||||||||||||||||||||||||||
Cash flow hedges | — | — | — | — | — | — | — | 99 | — | 99 | — | 99 | ||||||||||||||||||||||||||||||||||||
Other comprehensive income for the period | 0 | 0 | 0 | 0 | 0 | 0 | 73,428 | 99 | 0 | 73,527 | 1,446 | 74,973 | ||||||||||||||||||||||||||||||||||||
Profit/(loss) for the year | — | — | — | 66,408 | 0 | — | — | — | — | 66,408 | (578 | ) | 65,830 | |||||||||||||||||||||||||||||||||||
Total comprehensive income for the period | 0 | 0 | 0 | 66,408 | 0 | 0 | 73,428 | 99 | 0 | 139,935 | 868 | 140,803 | ||||||||||||||||||||||||||||||||||||
Operations with own shares | — | — | — | — | — | (1,250 | ) | — | — | — | (1,250 | ) | — | (1,250 | ) | |||||||||||||||||||||||||||||||||
Other changes | — | — | 1 | — | — | — | — | — | — | 1 | — | 1 | ||||||||||||||||||||||||||||||||||||
Distribution of 2009 profit | ||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | — | — | 88,783 | (88,783 | ) | — | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Dividends | — | — | — | (27,229 | ) | — | — | — | — | — | (27,229 | ) | (53 | ) | (27,282 | ) | ||||||||||||||||||||||||||||||||
Interim dividend | — | — | — | (31,960 | ) | 31,960 | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Operations with equity holders or owners | 0 | 0 | 88,784 | (147,972 | ) | 31,960 | (1,250 | ) | 0 | 0 | 0 | (28,478 | ) | (53 | ) | (28,531 | ) | |||||||||||||||||||||||||||||||
Balance at 30 June 2010 | 106,532 | 121,802 | 403,687 | 66,408 | 0 | (1,927 | ) | (16,825 | ) | (1,849 | ) | 0 | 677,828 | 12,972 | 690,800 | |||||||||||||||||||||||||||||||||
F-7
Table of Contents
(1) | General Information |
(2) | Basis of Presentation and Accounting Principles Applied |
Mandatory | ||
Application in Years | ||
Starting after: | ||
IAS 27 (revised) Consolidated and Individual Financial Statements | 1 July 2009 | |
Amended IAS 39: Financial Instruments: Recognition and Measurement | 1 July 2009 | |
IFRS 3 (revised) Business combinations | 1 July 2009 | |
IFRIC 12 Service Concession Arrangements | 27 March 2009 | |
IFRIC 16 Hedges of a net investment in a foreign operation | 30 June 2009 | |
IFRIC 17 Distributions of non-cash assets to owners | 1 November 2009 | |
IFRIC 18 Transfer of assets from customers | 1 November 2009 |
F-8
Table of Contents
Mandatory | ||
Application in Years | ||
Starting after: | ||
Improvements to IFRS issued in May 2010 | several dates | |
IAS 24 Related Party Disclosures | 1 January 2011 | |
IFRS 9 Financial Instruments | 1 January 2013 | |
Amendment to IAS 32: Classification of emission rights | 1 February 2010 | |
IFRS 1 Limited exemption from comparative IFRS 7 disclosures | 1 July 2010 | |
Amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement | 1 January 2011 | |
IFRIC 19 Extinguishing Financial Liabilities with equity instruments | 1 July 2010 |
• | The corporate tax expense which, according to IAS 34, is recognised in interim periods based on the best estimate of the average tax rate that the Group expects for the annual period. | |
• | The assumptions used for calculation of the fair value of financial instruments. | |
• | The useful life of property, plant, and equipment and intangible assets. | |
• | The valuation of assets and goodwill to determine if there are any impairment losses. | |
• | Assessment of the capitalisation of development expenses. | |
• | Valuation of provisions and contingencies. | |
• | Valuation of the reasonable value of financial instruments. |
F-9
Table of Contents
(3) | Changes in the composition of the Group |
a) | Business combinations or other acquisitions or increased shareholdings in subsidiaries, joint ventures and/or investments in associates: |
(Net) Sum Paid in | ||||||||||||||||
Acquisition + Other | ||||||||||||||||
Effective | Expenses Directly | % of Total of Post- | ||||||||||||||
Transaction | Attributable to the | % of Acquired Voting | Acquisition Voting | |||||||||||||
Name of Entity | Category | Date | Combination | Rights | Rights in Entity | |||||||||||
(Thousands of Euros) | ||||||||||||||||
Nanotherapix, S.L. | Joint venture | 09/03/2010 | 1,472 | 51 | % | 51 | % | |||||||||
Xepol, AB | Subsidiary | 03/06/2010 | 2,255 | 100 | % | 100 | % | |||||||||
Grifols Colombia, Ltda. | Subsidiary | 03/06/2010 | 8 | 100 | % | 100 | % |
b) | Reduction in holdings in subsidiaries, joint-ventures, and/or investment in associates: |
F-10
Table of Contents
(4) | Financial Risk Management Policy |
(5) | Segment Reporting |
Net Revenues | ||||||||
Six Months Ended | Six Months Ended | |||||||
Segments | 30 June 2010 | 30 June 2009 | ||||||
(Thousand of Euros) | ||||||||
Bioscience | 380,081 | 350,957 | ||||||
Hospital | 45,146 | 45,057 | ||||||
Diagnostic | 54,413 | 50,828 | ||||||
Raw materials + Other | 8,169 | 23,689 | ||||||
TOTAL | 487,809 | 470,531 | ||||||
Consolidated Income/(Loss) | ||||||||
Six Months Ended | Six Months Ended | |||||||
Segments | 30 June 2010 | 30 June 2009 | ||||||
(Thousand of Euros) | ||||||||
Bioscience | 162,938 | 154,248 | ||||||
Hospital | 5,196 | 4,928 | ||||||
Diagnostic | 4,798 | 8,152 | ||||||
Raw materials + Other | 4,763 | 5,948 | ||||||
Total income of reported segments | 177,695 | 173,276 | ||||||
Unallocated expenses | (111,137 | ) | (91,138 | ) | ||||
Other (loss)/income | (728 | ) | 10 | |||||
Income Tax | 23,022 | 32,860 | ||||||
Profit before income tax from continuing operations | 88,852 | 115,008 | ||||||
F-11
Table of Contents
(6) | Goodwill |
Balance at | Translation | Balance at | ||||||||||||||
31/12/09 | Differences | Transfers | 30/06/10 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net value | ||||||||||||||||
Grifols UK,Ltd. | 7,736 | 668 | 0 | 8,404 | ||||||||||||
Grifols Italia,S.p.A. | 6,118 | 0 | 0 | 6,118 | ||||||||||||
Biomat USA, Inc. | 90,089 | 18,244 | 14,770 | 123,103 | ||||||||||||
Plasmacare, Inc. | 35,676 | 6,208 | 0 | 41,884 | ||||||||||||
Plasma Collection Centers, Inc. | 14,770 | 0 | (14,770 | ) | 0 | |||||||||||
Woolloomooloo Holdings Pty Ltd. | 19,611 | 2,197 | 0 | 21,808 | ||||||||||||
174,000 | 27,317 | 0 | 201,317 | |||||||||||||
F-12
Table of Contents
(7) | Other Intangible Assets and Property, Plant, and Equipment |
Other Intangible | Property, Plant and | |||||||
Assets | Equipment | |||||||
Thousands of Euros | ||||||||
Total Cost at 31/12/2009 | 130,783 | 557,411 | ||||||
Total dep. & amort. at 31/12/2009 | (61,383 | ) | (185,706 | ) | ||||
Impairment at 31/12/2009 | (15 | ) | 0 | |||||
Balance at 31/12/2009 | 69,385 | 371,705 | ||||||
Cost | ||||||||
Additions | 8,301 | 44,398 | ||||||
Disposals | (300 | ) | (3,944 | ) | ||||
Transfers | 1,011 | 1,244 | ||||||
Translation differences | 5,552 | 36,139 | ||||||
Total Cost at 30/06/2010 | 145,347 | 635,248 | ||||||
Depreciation & amortization | ||||||||
Additions | (4,106 | ) | (17,328 | ) | ||||
Disposals | 5 | 2,057 | ||||||
Transfers | (846 | ) | (1,409 | ) | ||||
Translation differences | (1,406 | ) | (9,766 | ) | ||||
Total dep. & amort. at 30/06/2010 | (67,736 | ) | (212,152 | ) | ||||
Disposals | 15 | 0 | ||||||
Impairment at 30/06/2010 | 0 | 0 | ||||||
Balance at 30/06/2010 | 77,611 | 423,096 | ||||||
(8) | Trade Receivables |
F-13
Table of Contents
(9) | Capital and Reserves |
(a) | Share Capital |
(b) | Own Shares |
Num. of Shares | Thousand of Euros | |||||||
Balance at 1 January 2009 | 2,411,622 | 33,087 | ||||||
Acquisitions | 1,977,438 | 22,860 | ||||||
Disposals | (4,442 | ) | (57 | ) | ||||
Balance at 30 June 2009 | 4,384,618 | 55,890 | ||||||
Balance at 1 January 2010 | 53,326 | 677 | ||||||
Acquisitions | 105,000 | 1,250 | ||||||
Balance at 30 June 2010 | 158,326 | 1,927 | ||||||
(c) | Dividends |
June 2010 | June 2009 | |||||||||||||||||||||||
% Over | Euros | Amount in | % Over | Euros | Amount in | |||||||||||||||||||
par | per | Thousands of | par | per | Thousands of | |||||||||||||||||||
Value | Share | Euros | Value | Share | Euros | |||||||||||||||||||
Ordinary shares | — | — | — | 46.00 | % | 0.23 | 48,691 | |||||||||||||||||
Total dividends paid | — | — | — | 46.00 | % | 0.23 | 48,691 | |||||||||||||||||
Dividends charged to income | — | — | — | 46.00 | % | 0.23 | 48,691 |
F-14
Table of Contents
(10) | Financial Liabilities |
Non-Current Financial Liabilities | 30/06/2010 | 31/12/2009 | ||||||
Thousands of Euros | ||||||||
Issue of Corporate bonds | 478,136 | 410,552 | ||||||
Bonds | 478,136 | 410,552 | ||||||
Club Deal | 132,457 | 195,471 | ||||||
Other loans | 126,143 | 90,961 | ||||||
Finance lease liabilities | 5,370 | 6,202 | ||||||
Loans and borrowings | 263,970 | 292,634 | ||||||
Loans and borrowings and bonds or other non-current marketable securities | 742,106 | 703,186 | ||||||
Other non-current financial liabilities | 12,075 | 12,552 | ||||||
754,181 | 715,738 | |||||||
Current Financial Liabilities | 30/06/2010 | 31/12/2009 | ||||||
Thousands of Euros | ||||||||
Short-term debt security in a EU member state | 7,997 | 6,407 | ||||||
Interest accrued on US corporate bonds | 7,870 | 6,716 | ||||||
Bonds | 15,867 | 13,123 | ||||||
Club Deal | 66,171 | 33,014 | ||||||
Other loans | 60,164 | 63,120 | ||||||
Finance lease liabilities | 3,955 | 4,734 | ||||||
Loans and borrowings | 130,290 | 100,868 | ||||||
Loans and borrowings and bonds or other current marketable securities | 146,157 | 113,991 | ||||||
Financial derivatives | 16,708 | 3,333 | ||||||
Other current financial liabilities | 40,222 | 8,897 | ||||||
Other current financial liabilities | 56,930 | 12,230 | ||||||
203,087 | 126,221 | |||||||
Opening | Adj. for Translation | Final | ||||||||||||||||||
Balance at | Repurchases or | Differences and | Balance at | |||||||||||||||||
01/01/09 | Issues | Reimbursements | Other | 30/06/09 | ||||||||||||||||
Debt securities issued in a EU member State which did not require registration of a prospectus (par value) | 5,679 | 6,561 | (5,679 | ) | 0 | 6,561 |
F-15
Table of Contents
Opening | Adj. for Translation | Final | ||||||||||||||||||
Balance at | Repurchases or | Differences and | Balance at | |||||||||||||||||
01/01/10 | Issues | Reimbursements | Other | 30/06/10 | ||||||||||||||||
Debt securities issued in a EU member State which did not require registration of a prospectus (par value) | 6,510 | 8,334 | (6,510 | ) | 0 | 8,334 | ||||||||||||||
Other debt securities issued outside a EU member State (par value) | 416,147 | 0 | 0 | 72,404 | 488,551 |
(11) | Financial Income and Expenses |
(12) | Income Tax |
(13) | Discontinued Operations |
(14) | Commitments and Contingencies. |
F-16
Table of Contents
(15) | Related Parties |
Key Management | Other Related | Major | Board of Directors | |||||||||||||
Personnel | Parties | Shareholders | of the Company | |||||||||||||
Thousands of Euros | ||||||||||||||||
Other service expenses | — | 5,912 | — | 90 | ||||||||||||
Personnel expenses | 2,931 | — | — | 1,033 | ||||||||||||
2,931 | 5,912 | 0 | 1,123 | |||||||||||||
Dividends and other profits distributed | — | — | 11,970 | 2,061 | ||||||||||||
— | — | 11,970 | 2,061 | |||||||||||||
Key Management | Other Related | Major | Board of Directors | |||||||||||||
Personnel | Parties | Shareholders | of the Company | |||||||||||||
Thousands of Euros | ||||||||||||||||
Other service expenses | — | 2,898 | — | 120 | ||||||||||||
Personnel expenses | 2,922 | — | — | 1,074 | ||||||||||||
2,922 | 2,898 | — | 1,194 | |||||||||||||
Dividends and other profits distributed | — | — | 16,488 | 3,686 | ||||||||||||
— | — | 16,488 | 3,686 | |||||||||||||
(16) | Subsequent events |
F-17
Table of Contents
F-18
Table of Contents
at 31 December 2009 and 2008
31/12/09 | 31/12/08 | |||||||
(Expressed in | ||||||||
thousands of euros) | ||||||||
ASSETS | ||||||||
Non-current assets | ||||||||
Intangible assets | ||||||||
Goodwill (note 7) | 174,000 | 158,567 | ||||||
Other intangible assets (note 8) | 69,385 | 57,756 | ||||||
Total intangible assets | 243,385 | 216,323 | ||||||
Property, plant and equipment (note 9) | 371,705 | 301,009 | ||||||
Investments in equity accounted investees (note 10) | 383 | 374 | ||||||
Non-current financial assets (note 11) | 3,731 | 1,636 | ||||||
Deferred tax assets (note 27) | 33,395 | 34,297 | ||||||
Total non-current assets | 652,599 | 553,639 | ||||||
Current assets | ||||||||
Inventories (note 12) | 484,462 | 373,098 | ||||||
Trade and other receivables | ||||||||
Trade receivables | 207,840 | 186,324 | ||||||
Other receivables | 39,540 | 43,443 | ||||||
Current income tax assets | 7,802 | 5,428 | ||||||
Trade and other receivables (note 13) | 255,182 | 235,195 | ||||||
Other current financial assets (note 14) | 8,217 | 6,680 | ||||||
Other current assets | 7,345 | 5,259 | ||||||
Cash and cash equivalents (note 20) | 249,372 | 6,368 | ||||||
Total current assets | 1,004,578 | 626,600 | ||||||
Total assets | 1,657,177 | 1,180,239 | ||||||
F-19
Table of Contents
31/12/09 | 31/12/08 | |||||||
(In thousands of euros) | ||||||||
EQUITY AND LIABILITIES | ||||||||
Equity | ||||||||
Share capital (note 15) | 106,532 | 106,532 | ||||||
Share premium (note 15) | 121,802 | 121,802 | ||||||
Reserves | 314,903 | 247,669 | ||||||
Own shares (note 15) | (677 | ) | (33,087 | ) | ||||
Interim dividend | (31,960 | ) | — | |||||
Profit for the year attributable to the Parent | 147,972 | 121,728 | ||||||
Total | 658,572 | 564,644 | ||||||
Available-for-sale financial assets | — | (158 | ) | |||||
Cash flow hedges | (1,948 | ) | — | |||||
Translation differences | (90,253 | ) | (84,457 | ) | ||||
Accumulated other comprehensive income | (92,201 | ) | (84,615 | ) | ||||
Equity attributable to the Parent (note 15) | 566,371 | 480,029 | ||||||
Minority interest(note 17) | 12,157 | 1,250 | ||||||
Total equity | 578,528 | 481,279 | ||||||
Liabilities | ||||||||
Non-current liabilities | ||||||||
Grants (note 18) | 2,311 | 2,353 | ||||||
Provisions (note 19) | 1,232 | 3,045 | ||||||
Non-current financial liabilities | ||||||||
Loans and borrowings, bonds and other marketable securities | 703,186 | 311,513 | ||||||
Other financial liabilities | 12,552 | 12,542 | ||||||
Total non-current financial liabilities (note 20) | 715,738 | 324,055 | ||||||
Deferred tax liabilities (note 27) | 60,325 | 51,969 | ||||||
Total non-current liabilities | 779,606 | 381,422 | ||||||
Current liabilities | ||||||||
Provisions (note 19) | 4,702 | 3,830 | ||||||
Current financial liabilities | ||||||||
Loans and borrowings, bonds and other marketable securities | 113,991 | 147,547 | ||||||
Other financial liabilities | 12,230 | 9,685 | ||||||
Total current financial liabilities (note 20) | 126,221 | 157,232 | ||||||
Trade and other payables | ||||||||
Suppliers | 120,909 | 107,613 | ||||||
Other payables | 17,832 | 9,068 | ||||||
Current income tax liabilities | 3,258 | 16,362 | ||||||
Total trade and other payables (note 21) | 141,999 | 133,043 | ||||||
Other current liabilities (note 22) | 26,121 | 23,433 | ||||||
Total current liabilities | 299,043 | 317,538 | ||||||
Total liabilities | 1,078,649 | 698,960 | ||||||
Total equity and liabilities | 1,657,177 | 1,180,239 | ||||||
F-20
Table of Contents
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
(Expressed in thousands of euros) | ||||||||||||
Revenues (note 23) | 913,186 | 814,311 | 703,291 | |||||||||
Changes in inventories of finished goods and work in progress (note 12) | 73,093 | 31,058 | 16,882 | |||||||||
Self-constructed non-current assets (notes 8 and 9) | 41,142 | 25,794 | 19,860 | |||||||||
Supplies (note 12) | (286,274 | ) | (206,738 | ) | (196,308 | ) | ||||||
Other operating income (note 25) | 1,443 | 1,289 | 2,322 | |||||||||
Personnel expenses (note 24) | (273,168 | ) | (238,159 | ) | (209,049 | ) | ||||||
Other operating expenses (note 25) | (203,381 | ) | (192,288 | ) | (158,273 | ) | ||||||
Amortisation and depreciation (notes 8 and 9) | (39,554 | ) | (33,256 | ) | (31,528 | ) | ||||||
Non-financial and other capital grants (note 18) | 1,188 | 2,941 | 282 | |||||||||
Impairment and net losses on disposal of fixed assets | (1,147 | ) | (1,991 | ) | (1,125 | ) | ||||||
Results from operating activities | 226,528 | 202,961 | 146,354 | |||||||||
Finance income | 7,067 | 2,682 | 4,526 | |||||||||
Finance expenses | (27,087 | ) | (29,305 | ) | (23,523 | ) | ||||||
Change in fair value of financial instruments | (587 | ) | (1,268 | ) | 829 | |||||||
Impairment and gains/(losses) on disposal of financial instruments | (245 | ) | — | — | ||||||||
Exchange losses | (1,733 | ) | (2,825 | ) | (4,618 | ) | ||||||
Net finance expense (note 26) | (22,585 | ) | (30,716 | ) | (22,786 | ) | ||||||
Share of profit of equity accounted investees (note 10) | 51 | 24 | 19 | |||||||||
Profit before income tax from continuing operations | 203,994 | 172,269 | 123,587 | |||||||||
Income tax expense (note 27) | (56,424 | ) | (50,153 | ) | (35,239 | ) | ||||||
Profit after income tax from continuing operations | 147,570 | 122,116 | 88,348 | |||||||||
Profit attributable to equity holders of the Parent | 147,972 | 121,728 | 87,774 | |||||||||
Profit attributable to minority interest | (402 | ) | 388 | 574 | ||||||||
Consolidated profit for the year | 147,570 | 122,116 | 88,348 | |||||||||
Basic earnings per share (euros) (note 16) | 0.706 | 0.578 | 0.414 | |||||||||
Diluted earnings per share (euros) (note 16) | 0.706 | 0.578 | 0.414 |
F-21
Table of Contents
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
(Expressed in thousands of euros) | ||||||||||||
Consolidated income for the year | 147,570 | 122,116 | 88,348 | |||||||||
Income and expenses generated during the year | ||||||||||||
Measurement of financial instruments (note 11) | (14 | ) | (6 | ) | (100 | ) | ||||||
Available-for-sale financial assets | (18 | ) | (9 | ) | (143 | ) | ||||||
Tax effect | 4 | 3 | 43 | |||||||||
Cash flow hedges (note 15 (f)) | (1,998 | ) | 0 | 0 | ||||||||
Cash flow hedges | (3,275 | ) | 0 | 0 | ||||||||
Tax effect | 1,277 | 0 | 0 | |||||||||
Translation differences | (4,145 | ) | 13,955 | (30,486 | ) | |||||||
Income and expenses generated during the year | (6,157 | ) | 13,949 | (30,586 | ) | |||||||
Income and expense recognised in the income statement: | ||||||||||||
Measurement of financial instruments (note 11) | 172 | 0 | 0 | |||||||||
Available-for-sale financial assets | 245 | 0 | 0 | |||||||||
Tax effect | (73 | ) | 0 | 0 | ||||||||
Cash flow hedges (note 15 (f)) | 50 | 0 | 0 | |||||||||
Cash flow hedges | 80 | |||||||||||
Tax effect | (30 | ) | 0 | 0 | ||||||||
Income and expense recognised in the income statement: | 222 | 0 | 0 | |||||||||
Total comprehensive income for the year | 141,635 | 136,065 | 57,762 | |||||||||
Total comprehensive income attributable to the Parent | 140,386 | 135,781 | 57,180 | |||||||||
Total comprehensive income attributable to minority interests | 1,249 | 284 | 582 | |||||||||
Total comprehensive income for the year | 141,635 | 136,065 | 57,762 | |||||||||
F-22
Table of Contents
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
(Expressed in thousands of euros) | ||||||||||||
Cash flows from operating activities | ||||||||||||
Profit before tax | 203,994 | 172,269 | 123,587 | |||||||||
Adjustments for: | 61,800 | 66,034 | 59,362 | |||||||||
Amortisation and depreciation | 39,554 | 33,256 | 31,528 | |||||||||
Other adjustments: | 22,246 | 32,778 | 27,834 | |||||||||
Profit on equity accounted investments | (51 | ) | (24 | ) | (19 | ) | ||||||
Exchange differences | 1,733 | 2,825 | 4,617 | |||||||||
Net provision charges | 53 | 1,994 | 156 | |||||||||
Loss on disposal of fixed assets | 1,147 | 2,001 | 1,073 | |||||||||
Government grants taken to income | (1,188 | ) | (2,943 | ) | (283 | ) | ||||||
Net finance expense | 17,551 | 27,891 | 18,168 | |||||||||
Other adjustments | 3,001 | 1,034 | 4,122 | |||||||||
Changes in capital and assets | (104,127 | ) | (86,550 | ) | (43,577 | ) | ||||||
Change in inventories | (113,104 | ) | (98,520 | ) | (45,516 | ) | ||||||
Change in trade and other receivables | (12,549 | ) | (7,951 | ) | (13,209 | ) | ||||||
Change in current financial assets and other current assets | (1,287 | ) | 405 | (880 | ) | |||||||
Change in current trade and other payables | 22,813 | 19,516 | 16,028 | |||||||||
Other cash flows from operating activities | (73,487 | ) | (77,310 | ) | (45,184 | ) | ||||||
Interest paid | (14,719 | ) | (25,972 | ) | (19,525 | ) | ||||||
Interest recovered | 2,509 | 2,213 | 2,876 | |||||||||
Net income tax paid | (61,277 | ) | (53,551 | ) | (28,535 | ) | ||||||
Net cash from operating activities | 88,180 | 74,443 | 94,188 | |||||||||
Cash flows from investing activities | ||||||||||||
Payments for investments | (136,626 | ) | (130,923 | ) | (72,573 | ) | ||||||
Group companies and business units (note 2) | (15,385 | ) | (632 | ) | (17,077 | ) | ||||||
Property, plant and equipment and intangible assets | (118,770 | ) | (129,568 | ) | (55,496 | ) | ||||||
Property, plant and equipment | (103,415 | ) | (119,824 | ) | (47,190 | ) | ||||||
Intangible assets | (15,355 | ) | (9,744 | ) | (8,306 | ) | ||||||
Other financial assets | (2,471 | ) | (723 | ) | 0 | |||||||
Proceeds from the sale of investments | 673 | 157 | 1,859 | |||||||||
Property, plant and equipment | 673 | 157 | 894 | |||||||||
Other financial assets | 0 | 0 | 965 | |||||||||
Net cash used in investing activities | (135,953 | ) | (130,766 | ) | (70,714 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Proceeds from and payments for equity instruments | 26,655 | (4,212 | ) | (28,893 | ) | |||||||
Issue | (76 | ) | 0 | 0 | ||||||||
Acquisition of treasury shares | (25,186 | ) | (4,880 | ) | (28,893 | ) | ||||||
Disposal of treasury shares | 51,917 | 668 | 0 | |||||||||
Net proceeds from and payments for financial liability instruments | 344,413 | 96,349 | (1,974 | ) | ||||||||
Issue | 525,078 | 394,109 | 123,839 | |||||||||
Redemption and repayment | (180,665 | ) | (297,760 | ) | (125,813 | ) | ||||||
Dividends and interest on other equity instruments paid | (80,913 | ) | (34,792 | ) | (12,805 | ) | ||||||
Other cash flows from financing activities | 741 | 0 | 0 | |||||||||
Other amounts received from financing activities | 741 | 0 | 0 | |||||||||
Net cash from / (used in) financing activities | 290,896 | 57,345 | (43,672 | ) | ||||||||
Effect of exchange rate fluctuations on cash | (119 | ) | (344 | ) | (995 | ) | ||||||
Net increase / (decrease) in cash and cash equivalents | 243,004 | 678 | (21,193 | ) | ||||||||
Cash and cash equivalents at beginning of the year | 6,368 | 5,690 | 26,883 | |||||||||
Cash and cash equivalents at end of year | 249,372 | 6,368 | 5,690 |
F-23
Table of Contents
Attributable to Equity Holders of the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income | ||||||||||||||||||||||||||||||||||||||||||||||||
Available-for | Equity | |||||||||||||||||||||||||||||||||||||||||||||||
Profit Attributable | Sale | Attributable | ||||||||||||||||||||||||||||||||||||||||||||||
Share | Share | to | Interim | Own | Translation | Cash Flow | Financial | to | Minority | |||||||||||||||||||||||||||||||||||||||
Capital | Premium | Reserves | Parent | Dividend | Shares | Differences | Hedges | Assets | Parent | Interests | Equity | |||||||||||||||||||||||||||||||||||||
(Expressed in thousands of euros) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balances at 31 December 2006 | 106,532 | 131,832 | 152,260 | 45,394 | — | — | (68,022 | ) | — | (52 | ) | 367,944 | 408 | 368,352 | ||||||||||||||||||||||||||||||||||
Other comprehensive income for the year | — | — | — | — | — | — | (30,494 | ) | — | (100 | ) | (30,594 | ) | 8 | (30,586 | ) | ||||||||||||||||||||||||||||||||
Profit/(loss) for the year | — | — | — | 87,774 | — | — | — | — | — | 87,774 | 574 | 88,348 | ||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 0 | 0 | 0 | 87,774 | 0 | 0 | (30,494 | ) | 0 | (100 | ) | 57,180 | 582 | 57,762 | ||||||||||||||||||||||||||||||||||
Distribution of 2006 profit | ||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | — | — | 32,589 | (32,589 | ) | — | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Dividends | — | — | — | (12,805 | ) | — | — | — | — | — | (12,805 | ) | — | (12,805 | ) | |||||||||||||||||||||||||||||||||
Other changes | (241 | ) | (241 | ) | (9 | ) | (250 | ) | ||||||||||||||||||||||||||||||||||||||||
Operations with own shares | — | — | — | — | — | (28,893 | ) | — | — | — | (28,893 | ) | — | (28,893 | ) | |||||||||||||||||||||||||||||||||
Operations with equity holders or owners | 0 | 0 | 32,348 | (45,394 | ) | 0 | (28,893 | ) | 0 | 0 | 0 | (41,939 | ) | (9 | ) | (41,948 | ) | |||||||||||||||||||||||||||||||
Balances at 31 December 2007 | 106,532 | 131,832 | 184,608 | 87,774 | 0 | (28,893 | ) | (98,516 | ) | 0 | (152 | ) | 383,185 | 981 | 384,166 | |||||||||||||||||||||||||||||||||
Other comprehensive income for the year | 0 | 0 | 0 | 0 | 0 | 0 | 14,059 | 0 | (6 | ) | 14,053 | (104 | ) | 13,949 | ||||||||||||||||||||||||||||||||||
Profit/(loss) for the year | — | — | — | 121,728 | — | — | — | — | — | 121,728 | 388 | 122,116 | ||||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 0 | 0 | 0 | 121,728 | 0 | 0 | 14,059 | 0 | (6 | ) | 135,781 | 284 | 136,065 | |||||||||||||||||||||||||||||||||||
Operations with own shares | — | — | 24 | — | — | (4,194 | ) | — | — | (4,170 | ) | — | (4,170 | ) | ||||||||||||||||||||||||||||||||||
Other changes | — | — | — | — | — | — | — | — | 0 | (15 | ) | (15 | ) | |||||||||||||||||||||||||||||||||||
Distribution of 2007 profit | ||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | — | — | 63,037 | (63,037 | ) | — | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Dividends | — | (10,030 | ) | — | (24,737 | ) | — | — | — | — | — | (34,767 | ) | — | (34,767 | ) | ||||||||||||||||||||||||||||||||
Operations with equity holders or owners | 0 | (10,030 | ) | 63,061 | (87,774 | ) | 0 | (4,194 | ) | 0 | 0 | 0 | (38,937 | ) | (15 | ) | (38,952 | ) | ||||||||||||||||||||||||||||||
Balances at 31 December 2008 | 106,532 | 121,802 | 247,669 | 121,728 | 0 | (33,087 | ) | (84,457 | ) | 0 | (158 | ) | 480,029 | 1,250 | 481,279 | |||||||||||||||||||||||||||||||||
Other comprehensive income for the year | 0 | 0 | 0 | 0 | 0 | 0 | (5,796 | ) | (1,948 | ) | 158 | (7,586 | ) | 1,651 | (5,935 | ) | ||||||||||||||||||||||||||||||||
Profit/(loss) for the year | — | — | — | 147,972 | 0 | — | — | — | — | 147,972 | (402 | ) | 147,570 | |||||||||||||||||||||||||||||||||||
Total comprehensive income for the year | 0 | 0 | 0 | 147,972 | 0 | 0 | (5,796 | ) | (1,948 | ) | 158 | 140,386 | 1,249 | 141,635 | ||||||||||||||||||||||||||||||||||
Operations with own shares | — | — | (5,679 | ) | — | 32,410 | — | — | — | 26,731 | — | 26,731 | ||||||||||||||||||||||||||||||||||||
Other changes | — | — | (124 | ) | — | — | — | — | — | (124 | ) | 44 | (80 | ) | ||||||||||||||||||||||||||||||||||
Business combinations | — | — | — | — | — | — | — | — | 0 | 9,876 | 9,876 | |||||||||||||||||||||||||||||||||||||
Distribution of 2008 profit | ||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | — | — | 73,037 | (73,037 | ) | — | — | — | — | — | 0 | — | 0 | |||||||||||||||||||||||||||||||||||
Dividends | — | — | — | (48,691 | ) | — | — | — | — | — | (48,691 | ) | (54 | ) | (48,745 | ) | ||||||||||||||||||||||||||||||||
Interim dividend | — | — | — | — | (31,960 | ) | — | — | — | — | (31,960 | ) | (208 | ) | (32,168 | ) | ||||||||||||||||||||||||||||||||
Operations with equity holders or owners | 0 | 0 | 67,234 | (121,728 | ) | (31,960 | ) | 32,410 | 0 | 0 | 0 | (54,044 | ) | 9,658 | (44,386 | ) | ||||||||||||||||||||||||||||||||
Balance at 31 December 2009 | 106,532 | 121,802 | 314,903 | 147,972 | (31,960 | ) | (677 | ) | (90,253 | ) | (1,948 | ) | 0 | 566,371 | 12,157 | 578,528 | ||||||||||||||||||||||||||||||||
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(1) | Nature, Principal Activities and Subsidiaries |
(a) | Grifols, S.A. |
(b) | Subsidiaries |
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(c) | Associates and other participations |
(2) | Basis of presentation of the Consolidated Financial Statements |
(a) | Changes to IFRS in 2007, 2008 and 2009 |
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• | IFRIC 11 IFRS 2: Group and Treasury Share Transactions. Effective date 1 March 2007. |
• | Amendment to IAS 39 Reclassification of Financial Assets: Effective Date and Transition (effective date 1 July 2008). | |
• | IFRIC 16 Hedges of a Net Investment in a Foreign Operation (effective date 1 October 2008). | |
• | IFRIC 12 Service Concession Arrangements (effective date 1 January 2008). | |
• | IFRIC 14 IAS 19 The Limit of a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective date 1 January 2008) | |
• | Amendments to IAS 39 and IFRS 7: Reclassification of Financial Instruments (effective date 1 July 2008). |
a) | Standards effective as of 1 January 2009 that have required changes to accounting policies and presentation |
• | IAS 1 Presentation of Financial Statements (revised 2007) (annual periods beginning on or after 1 January 2009). This standard modifies the requirements for presentation of the financial statements, introducing the statement of comprehensive income, which comprises income and other comprehensive income. Entities may also present two separate statements, an income statement showing profit or loss for the year and a statement of other comprehensive income presenting profit or loss for the year and other comprehensive income. When an entity changes an accounting policy retrospectively or makes a retrospective reclassification of items in its financial statements, it must also present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period. | |
• | IFRS 8 Operating Segments (annual periods beginning on or after 1 January 2009). The impact of this standard mainly relates to the disclosure of financial information by segment. See note 6. | |
• | IAS 23 Borrowing Costs (revised 2007) (annual periods beginning on or after 1 January 2009). This is a change in accounting policy. The Group applies this standard to borrowing costs related to qualifying assets capitalised on or subsequent to the date this standard became effective. The standard eliminates the possibility of recognising these borrowing costs as an expense, stipulating that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. Since 1 January 2009 the Group has capitalised interest amounting to euros 1,278 thousand (see note 26). | |
• | Amendments to IFRS 7: “Improving Disclosures about Financial Instruments” (applicable for years beginning on or after 1 January 2009). |
b) | Standards effective as of 1 January 2009 that have not affected the Group |
• | IFRIC 13 Customer Loyalty Programmes (annual periods beginning after 31 December 2008). | |
• | IFRS 2 Share-Based Payment: Modifications to vesting conditions and cancellations (applied retrospectively to annual periods beginning on or after 1 January 2009). |
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• | IAS 32 Financial Instruments: Presentation and IAS 1: Presentation of Financial Statements: Changes to puttable financial instruments and obligations arising on liquidation (effective as of 1 January 2009). | |
• | Improvements to IFRSs. This document modifies various standards and is effective for years beginning on or after 1 July 2009. The Group does not consider that it had any significant effects for its financial statements. | |
• | IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 27 Consolidated and Separate Financial Statements: These changes relate to the measurement of investments in separate financial statements. This standard is applied prospectively for years started on or after 1 January 2009. | |
• | Embedded derivatives: Amendments to IFRIC 9 and IAS 39 (applicable for years started after 31 December 2008). | |
• | IFRS 1 First-time Adoption of International Financial Reporting Standards (applicable to annual periods beginning after 31 December 2009). This change does not affect the Group. | |
• | IFRIC 15 Agreements for the Construction of Real Estate. | |
• | IFRIC 17 Distribution of Non-Cash Assets to Owners (effective date: 1 July 2009). | |
• | IFRIC 18 Transfers of Assets from Customers (effective date: 1 July 2009). | |
• | IAS 39 Financial Instruments: Recognition and Measurement. Changes to the items that can be classified as hedged. The amendment clarifies the types of risks that can be classified as hedged when applying hedge accounting (effective date: 1 July 2009). |
c) | Standards issued but not effective on 1 January 2009, which could have a future impact. |
• | IFRS 3 Business Combinations (reviewed 2008) and modifications to IAS 27 Consolidated and Separate Financial Statements, IAS 28 Investments in Associates, IAS 31 Interests in Joint Ventures and IAS 21 The Effects of Changes in Foreign Exchange Rates. This standard takes effect for business combinations acquired on or after 1 July 2009. These standards include the following changes that apply to the Group: |
• | The definition of business has been broadened, allowing more transactions to be classified as business combinations. | |
• | Any contingent considerations subject to future events are recognised at fair value, recognising any subsequent changes in consolidated profit or loss (consolidated statement of comprehensive income). | |
• | Acquisition-related costs, other than costs incurred to issue debt or equity securities, are recognised as an expense when incurred. | |
• | Any pre-existing interest in the business acquired is recognised at fair value at the acquisition date, taking any gain or loss to the consolidated income statement (consolidated statement of comprehensive income). | |
• | This pre-existing minority interest is measured, on atransaction-by-transaction basis, at fair value or at the minority’ interest’s share in the fair value of the net identifiable assets acquired. | |
• | The minority interest also has a share in any losses incurred by the business that exceed the value of the investment. | |
• | Once control is achieved, any subsequent acquisitions and partial sales (without loss of control) of interests in the business are recognised as transactions among equity holders. | |
• | Any retained interest in the business after control is lost is recognised at fair value, recognising the change in the consolidated income statement (consolidated statement of comprehensive income). |
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d) | Standards issued but not effective on 1 January 2009. |
• | Improvements to IFRSs issued in May 2010. These changes affect different standards with varying effective dates. | |
• | Amendment to IFRS 1 First-time Adoption of International Financial Reporting Standards: Additional exemptions for first-time adopters. Effective for years beginning on or after 1 January 2010. | |
• | IAS 24 Related Party Disclosures. Effective for annual periods beginning on or after 1 January 2011. | |
• | IFRS 9 Financial Instruments. Effective for annual periods beginning on or after 1 January 2013. | |
• | IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments. Effective for annual periods beginning on or after 1 July 2010. | |
• | IFRS 1 Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters. Effective for annual periods beginning on or after 1 July 2010. | |
• | Amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement. |
(b) | Relevant accounting estimates, assumptions and judgements used when applying accounting principles |
• | The assumptions used for calculation of the fair value of financial instruments (see note 4(i)). | |
• | Measurement of assets and goodwill to determine any related impairment losses (see note 4(g)). | |
• | Useful lives of property, plant and equipment and intangible assets (see Notes 4(e) and 4(f)). | |
• | Evaluation of the capitalisation of development costs (see note 4(f)). | |
• | Evaluation of provisions and contingencies (see note 4(p)). | |
• | Evaluation of the effectiveness of hedging instruments (see note 15 f). |
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(c) | Consolidation |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||||||||||||||
Percentage Ownership | Percentage Ownership | Percentage Ownership | ||||||||||||||||||||||
Direct | Indirect | Direct | Indirect | Direct | Indirect | |||||||||||||||||||
Parent | ||||||||||||||||||||||||
Grifols, S.A. | — | — | — | — | — | — | ||||||||||||||||||
Fully-consolidated companies | ||||||||||||||||||||||||
Laboratorios Grifols, S.A. | 99.998 | 0.002 | 99.998 | 0.002 | 99.998 | 0.002 | ||||||||||||||||||
Instituto Grifols, S.A. | 99.998 | 0.002 | 99.998 | 0.002 | 99.998 | 0.002 | ||||||||||||||||||
Movaco, S.A. | 99.999 | 0.001 | 99.999 | 0.001 | 99.999 | 0.001 | ||||||||||||||||||
Grifols Portugal Productos Farmacéuticos e Hospitalares, Lda. | 0.015 | 99.985 | 0.015 | 99.985 | 0.015 | 99.985 | ||||||||||||||||||
Diagnostic Grifols, S.A. | 99.998 | 0.002 | 99.998 | 0.002 | 99.998 | 0.002 | ||||||||||||||||||
Logister, S.A. | — | 100.000 | — | 100.000 | — | 100.000 | ||||||||||||||||||
Grifols Chile, S.A. | 99.000 | — | 99.000 | — | 99.000 | — | ||||||||||||||||||
Biomat, S.A. | 99.900 | 0.100 | 99.900 | 0.100 | 99.900 | 0.100 | ||||||||||||||||||
Grifols Argentina, S.A. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols, s.r.o. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Logistica Grifols S.A de C.V. | 100.000 | — | 100.000 | — | — | — | ||||||||||||||||||
Grifols México, S.A. de C.V. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Viajes, S.A. | 99.900 | 0.100 | 99.900 | 0.100 | 99.900 | 0.100 | ||||||||||||||||||
Grifols USA, LLC | — | 100.000 | — | 100.000 | — | 100.000 | ||||||||||||||||||
Grifols International, S.A. | 99.900 | 0.100 | 99.900 | 0.100 | 99.900 | 0.100 | ||||||||||||||||||
Grifols Italia, S.p.A. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols UK, Ltd. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Deutschland, GmbH | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Brasil, Ltda. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols France, S.A.R.L. | 99.000 | 1.000 | 99.000 | 1.000 | 99.000 | 1.000 | ||||||||||||||||||
Grifols Engineering, S.A. | 99.950 | 0.050 | 99.950 | 0.050 | 99.950 | 0.050 | ||||||||||||||||||
Biomat USA, Inc. | — | 100.000 | — | 100.000 | — | 100.000 | ||||||||||||||||||
Squadron Reinsurance Ltd. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Inc. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Biologicals Inc. | — | 100.000 | — | 100.000 | — | 100.000 | ||||||||||||||||||
Alpha Therapeutic Italia, S.p.A. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Asia Pacific Pte., Ltd. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Grifols Malaysia Sdn Bhd | — | 30.000 | — | 30.000 | — | 30.000 | ||||||||||||||||||
Grifols (Thailand) Ltd. | — | 48.000 | — | 48.000 | — | 48.000 | ||||||||||||||||||
Grifols Polska Sp.z.o.o. | 100.000 | — | 100.000 | — | 100.000 | — | ||||||||||||||||||
Plasmacare, Inc. | — | 100.000 | — | 100.000 | — | 100.000 | ||||||||||||||||||
Plasma Collection Centers, Inc. | — | 100.000 | — | 100.000 | — | 50.000 |
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31/12/09 | 31/12/08 | 31/12/07 | ||||||||||||||||||||||
Percentage Ownership | Percentage Ownership | Percentage Ownership | ||||||||||||||||||||||
Direct | Indirect | Direct | Indirect | Direct | Indirect | |||||||||||||||||||
Arrahona Optimus S.L. | 100.000 | — | 100.000 | — | — | — | ||||||||||||||||||
Woolloomooloo Holdings Pty Ltd. | 49.000 | — | — | — | — | |||||||||||||||||||
Diamed Australia Pty Ltd. | — | 49.000 | — | — | — | — | ||||||||||||||||||
Lateral Grifols Diagnostics Pty Ltd. | — | 49.000 | — | — | — | — | ||||||||||||||||||
Saturn Australia Pty Ltd. | — | 49.000 | — | — | — | — | ||||||||||||||||||
Saturn Investments AG | — | 49.000 | — | — | — | — | ||||||||||||||||||
Medion Grifols Diagnostic AG | — | 39.200 | — | — | — | — | ||||||||||||||||||
Medion GmbH | — | 39.200 | — | — | — | — | ||||||||||||||||||
Gri-Cel, S.A. | 0.001 | 99.999 | — | — | — | — | ||||||||||||||||||
Companies accounted for using the equity method | ||||||||||||||||||||||||
Quest International, Inc. | — | 35.000 | — | 35.000 | — | 35.000 |
(3) | Business combinations |
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Thousands of Euros | ||||
Cost of combination | ||||
Fair value of instruments issued | 17,077 | |||
Total cost of combination | 17,077 | |||
Fair value of net assets acquired | 971 | |||
Goodwill (excess of net assets acquired over cost of acquisition ) | 16,106 | |||
(see note 7 | ) |
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2009 | 2008 | |||||||
Thousands of Euros | ||||||||
Cost of the business combination | ||||||||
Cash paid | 632 | 632 | ||||||
Fair value of deferred payment | 1,968 | 1,743 | ||||||
2,600 | 2,375 | |||||||
Fair value of net assets acquired | 3 | 3 | ||||||
Goodwill | 2,597 | 2,372 | ||||||
(see note 7 | ) | (see note 7 | ) |
2009 | ||||
Thousands of Euros | ||||
Cost of the business combination | ||||
Cash paid | 25,000 | |||
Directly attributable costs | 497 | |||
Total cost of the business combination | 25,497 | |||
Fair value of net assets acquired | 9,307 | |||
Goodwill | 16,190 | |||
(see note 7 | ) |
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2009 | ||||||||
Fair Value | Book Value | |||||||
Thousands of Euros | ||||||||
Intangible assets (note 8, App. II) | 6,525 | 476 | ||||||
Property, plant and equipment (note 9, App. III) | 2,307 | 3,113 | ||||||
Deferred tax assets (note 27) | 500 | 258 | ||||||
Inventories (note 12) | 3,549 | 3,549 | ||||||
Trade and other receivables | 2,096 | 2,096 | ||||||
Other assets | 293 | 293 | ||||||
Cash and cash equivalents | 10,112 | 10,112 | ||||||
Total assets | 25,382 | 19,897 | ||||||
Trade and other payables | 3,165 | 3,165 | ||||||
Other liabilities | 1,273 | 1,272 | ||||||
Deferred tax liabilities (note 27) | 1,761 | 551 | ||||||
Total liabilities and contingent liabilities | 6,199 | 4,988 | ||||||
Total net assets | 19,183 | 14,909 | ||||||
Minority interests (note 17) | (9,876 | ) | ||||||
Total net assets acquired | 9,307 | |||||||
Goodwill | 16,190 | |||||||
Cash paid | 25,497 | |||||||
Cash and cash equivalents of the acquired company | (10,112 | ) | ||||||
Cash outflow for the acquisition | 15,385 | |||||||
(4) | Accounting and Valuation Principles Applied |
(a) | Business combinations |
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Table of Contents
(b) | Minority interests |
(c) | Foreign currency transactions |
(i) | Functional currency and presentation currency |
(ii) | Transactions, balances and cash flows in foreign currency |
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(iii) | Translation of foreign operations |
• | Assets and liabilities, including goodwill and net asset adjustments derived from the acquisition of the operations, including comparative amounts, are translated at the closing rate at each balance sheet date. | |
• | Income and expenses, including comparative amounts, are translated into thousands of euros using the previous month’s exchange rate for all transactions performed during the current month. This method does not differ significantly from using the exchange rate at the date of the transaction; | |
• | All resulting exchange differences are recognised as translation differences in equity. |
(d) | Borrowing costs |
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(e) | Property, plant and equipment |
(i) | Initial recognition |
(ii) | Depreciation |
Depreciation | ||||
Method | Rates | |||
Buildings | Straight line | 1% – 3% | ||
Plant and machinery | Straight line | 8% – 10% | ||
Other installations, equipment and furniture | Straight line | 10% – 30% | ||
Other property, plant and equipment | Straight line | 16% – 25% |
(iii) | Subsequent recognition |
(iv) | Impairment |
(f) | Intangible assets |
(i) | Goodwill |
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(ii) | Internally generated intangible assets |
• | The Group has technical studies justifying the feasibility of the production process. | |
• | The Group has undertaken a commitment to complete production of the asset whereby it is in condition for sale or internal use. | |
• | The asset will generate sufficient future economic benefits. | |
• | The Group has sufficient financial and technical resources to complete development of the asset and has developed budget and cost accounting control systems which allow budgeted costs, introduced changes and costs actually assigned to different projects to be monitored. |
(iii) | Other intangible assets |
(iv) | Emission rights |
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(v) | Useful life and amortisation rates |
Estimated | ||||
Amortisation | Years of | |||
Method | Useful Life | |||
Development expenses | Straight line | 3 – 5 | ||
Concessions, patents, licences, trademarks and similar | Straight line | 5 – 15 | ||
Software | Straight line | 3 – 6 |
(g) | Impairment of non-financial assets subject to depreciation or amortisation |
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(h) | Leases |
(i) | Lessee accounting records |
• | Finance leases |
• | Operating leases |
(ii) | Lease hold investments |
(i) | Financial Instruments |
(i) | Classification of financial instruments |
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a) | Financial assets at fair value through profit or loss |
• | it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term | |
• | it forms part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent pattern of short-term profit-taking, or | |
• | it is a derivative, except for a derivative which has been designated as a hedging instrument and complies with conditions for effectiveness or a derivative that is a financial guarantee contract. |
b) | Loans and receivables |
c) | Available-for-sale financial assets |
d) | Financial assets and liabilities carried at cost |
e) | Financial assets and liabilities at fair value through profit or loss |
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(ii) | Offsetting principles |
(iii) | Fair value |
• | Firstly, the Group applies the quoted prices of the most advantageous active market to which the entity has immediate access, adjusted where appropriate to reflect any differences in counterparty credit risk between instruments traded in that market and the one being valued. The quoted market price for an asset held or liability to be issued is the current bid price and, for an asset to be acquired or liability held, the asking price. If the Group has assets and liabilities with offsetting market risks, it uses mid-market prices as a basis for establishing fair values for the offsetting risk positions and applies the bid or asking price to the net open position as appropriate. | |
• | When current bid and asking prices are unavailable, the price of the most recent transactions is used, adjusted to reflect changes in economic circumstances. | |
• | Otherwise, the Group applies generally accepted measurement techniques using, insofar as is possible, market data and, to a lesser extent, specific Group data. |
(iv) | Amortized cost |
(v) | Impairment of financial assets carried at cost |
(vi) | Impairment ofavailable-for-sale financial assets |
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(vii) | Financial liabilities |
(viii) | Derecognition of financial assets |
• | Payment of the cash flows is conditional on their prior collection. | |
• | The Group is unable to sell or pledge the financial asset. | |
• | The cash flows collected on behalf of the eventual recipients are remitted without material delay and the Group is not entitled to reinvest the cash flows. This criterion is not applicable to investments in cash or cash equivalents made by the Group during the settlement period from the collection date to the date of required remittance to the eventual recipients, provided that interest earned on such investments is passed on to the eventual recipients. |
• | If the Group has not retained control, it derecognises the financial asset and recognises separately as assets or liabilities any rights and obligations created or retained in the transfer. | |
• | If the Group has retained control, it continues to recognise the financial asset to the extent of its continuing involvement in the financial asset and recognises an associated liability. The extent of the Group’s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained. The associated liability is measured in such a way that the carrying amount of the transferred asset and the associated liability is equal to the amortized cost of the rights and obligations retained by the Group, if the transferred asset is measured at amortized cost, or to the fair value of the rights and obligations retained by the Group, if the transferred asset is measured at fair value. The Group continues to recognise any income arising on the transferred asset to the extent of its continuing involvement and recognises any expense incurred on the associated liability. Recognised changes in the fair value of the transferred asset and the associated liability are accounted for consistently with each other in profit and loss or equity, following the general recognition criteria described previously, and are not offset. |
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(j) | Hedge accounting |
(i) | Cash flow hedges |
(k) | Company own shares |
(l) | Inventories |
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• | Raw materials and other supplies: replacement cost. Nevertheless, raw materials are not written down below cost if the finished goods into which they will be incorporated are expected to be sold at or above cost of production. | |
• | Goods for resale and finished goods: estimated selling price, less costs to sell. | |
• | Work in progress: the estimated selling price of related finished goods, less the estimated costs of completion and the estimated costs necessary to make the sale. |
(m) | Cash and cash equivalents |
(n) | Government grants |
(i) | Capital grants |
(ii) | Operating grants |
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(iii) | Interest rate grants |
(o) | Employee benefits |
(i) | Defined contribution plans |
(ii) | Termination benefits |
(iii) | Short-term employee benefits |
(p) | Provisions |
(q) | Revenue recognition |
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(i) | Sale of goods |
• | the Group has transferred to the buyer the significant risks and rewards of ownership of the goods. | |
• | the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold; | |
• | the amount of revenue can be measured reliably; | |
• | it is probable that the economic benefits associated with the transaction will flow to the Group; and | |
• | the costs incurred or to be incurred in respect of the transaction can be measured reliably. |
(ii) | Rendering of services |
(iii) | Revenue from dividends |
(iv) | Revenue from interest on delayed collections |
(r) | Income tax |
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(i) | Taxable temporary differences |
• | They arise from the initial recognition of goodwill or an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable income; | |
• | They are associated with investments in subsidiaries over which the Group is able to control the timing of the reversal of the temporary difference and it is not probable that the temporary difference will reverse in the foreseeable future. |
(ii) | Deductible temporary differences |
• | It is probable that taxable profit will be available against which the deductible temporary difference can be utilised, unless the differences arise from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. | |
• | The temporary differences are associated with investments in subsidiaries to the extent that the difference will reverse in the foreseeable future and sufficient taxable income is expected to be generated against which the temporary difference can be offset. |
(iii) | Measurement |
(iv) | Offset and recognition |
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(s) | Segment reporting |
(t) | Classification of assets and liabilities as current and non-current |
• | Assets are classified as current when they are expected to be realised, or are intended for sale or consumption in the Group’s normal operating cycle within twelve months after the balance sheet date and they are held primarily for the purpose of trading. Cash and cash equivalents are also classified as current, except where they may not be exchanged or used to settle a liability, at least within twelve months after the balance sheet date. | |
• | Liabilities are classified as current when they are expected to be settled in the Group’s normal operating cycle within 12 months after the balance sheet date and they are held primarily for the purpose of trading, or where the Group does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. | |
• | Financial liabilities are classified as current when they are due to be settled within twelve months after the reporting period, even if the original term was for a period longer than twelve months, and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue. |
(5) | Financial Risk Management Policy |
(a) | General |
• | Credit risk | |
• | Liquidity risk | |
• | Market risk |
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(i) | Currency risk |
(ii) | Interest-rate risk |
(iii) | Market price risk |
(b) | Capital management |
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(6) | Segment Reporting |
• | Balance sheet: cash and cash equivalents, receivables, public entities, deferred tax assets and liabilities, loans and borrowings and certain payables. | |
• | Income statement: general administration expenses, other operating income/expenses, finance income/expense and income tax. |
(a) | Operating segments |
• | Bioscience: including all activities related with products deriving from human plasma for therapeutic use. |
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• | Hospital: comprising all non-biological pharmaceutical products and medical supplies manufactured by Group companies earmarked for hospital pharmacy. Products related with this business which the Group does not manufacture but markets as supplementary to its own products are also included. | |
• | Diagnostic: including the marketing of diagnostic testing equipment, reagents and other equipment, manufactured by Group or other companies. | |
• | Materials: including sales of intermediate biological products and the rendering of manufacturing services to third party companies. |
% of Sales | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Hemoderivatives | 76.0 | % | 75.6 | % | 69.6 | % | ||||||
Other hemoderivatives | 0.2 | % | 0.3 | % | 0.5 | % | ||||||
Transfusional medicine | 8.2 | % | 7.3 | % | 7.8 | % | ||||||
In vitro diagnosis | 3.1 | % | 3.2 | % | 3.5 | % | ||||||
Fluid therapy and nutrition | 5.2 | % | 5.7 | % | 6.0 | % | ||||||
Hospital supplies | 4.2 | % | 4.4 | % | 4.6 | % | ||||||
Raw materials | 2.5 | % | 2.8 | % | 7.2 | % | ||||||
Other | 0.6 | % | 0.7 | % | 0.8 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
(b) | Geographical information |
• | European Union | |
• | United States of America | |
• | Rest of the world |
(c) | Major customer |
(7) | Goodwill |
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Balances at | Business | Translation | Balances at | |||||||||||||
31/12/06 | Combinations | Differences | 31/12/07 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net value | ||||||||||||||||
Grifols UK, Ltd. | 10,233 | — | (864 | ) | 9,369 | |||||||||||
Grifols Italia, S.p.A. | 6,118 | — | — | 6,118 | ||||||||||||
Biomat USA, Inc. | 95,446 | — | (10,056 | ) | 85,390 | |||||||||||
Plasmacare, Inc. | 39,023 | — | (4,111 | ) | 34,912 | |||||||||||
Plasma Collection Centers, Inc. | — | 16,106 | (1,652 | ) | 14,454 | |||||||||||
150,820 | 16,106 | (16,683 | ) | 150,243 | ||||||||||||
(note 3.1 | ) |
Balances at | Business | Translation | Balances at | |||||||||||||
31/12/07 | Combinations | Differences | 31/12/08 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net value | ||||||||||||||||
Grifols UK, Ltd. | 9,369 | — | (2,156 | ) | 7,213 | |||||||||||
Grifols Italia, S.p.A. | 6,118 | — | — | 6,118 | ||||||||||||
Biomat USA, Inc. | 85,390 | 2,372 | 5,256 | 93,018 | ||||||||||||
Plasmacare, Inc. | 34,912 | — | 2,017 | 36,929 | ||||||||||||
Plasma Collection Centers, Inc. | 14,454 | — | 835 | 15,289 | ||||||||||||
150,243 | 2,372 | 5,952 | 158,567 | |||||||||||||
(note 3.2 | ) |
Balances at | Business | Translation | Balances at | |||||||||||||
31/12/08 | Combinations | Differences | 31/12/09 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net value | ||||||||||||||||
Grifols UK, Ltd. | 7,213 | — | 523 | 7,736 | ||||||||||||
Grifols Italia, S.p.A. | 6,118 | — | — | 6,118 | ||||||||||||
Biomat USA, Inc. | 93,018 | 225 | (3,154 | ) | 90,089 | |||||||||||
Plasmacare, Inc. | 36,929 | — | (1,253 | ) | 35,676 | |||||||||||
Plasma Collection Centers, Inc. | 15,289 | — | (519 | ) | 14,770 | |||||||||||
Woolloomooloo Holdings Pty Ltd. | — | 16,190 | 3,421 | 19,611 | ||||||||||||
158,567 | 16,415 | (982 | ) | 174,000 | ||||||||||||
(notes 3.2 and 3.3) |
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Growth rate used to extrapolate projections: | 3 | % | ||
Discount rate after tax: | 8 | % |
Growth rate used to extrapolate projections: | 2 | % | ||
Discount rate after tax: | 8.7 | % |
(8) | Other Intangible Assets |
Growth rate used to extrapolate projections: | 3 | % | ||
Discount rate after tax: | 8 | % |
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(9) | Property, Plant and Equipment |
• | Purchase of land and buildings in Parets del Vallès, Barcelona with a value of euros 19.4 million, financed through a mortgage loan from Caixa Catalunya. | |
• | Purchase of land and buildings under construction in Sant Cugat del Vallès, Barcelona through the acquisition of the real estate company Arrahona Optimus, S.L. for euros 33 million at 31 December 2008, financed through a mortgage loan from BBVA. |
a) | Mortgaged property, plant and equipment |
b) | Official capital grants received |
c) | Insurance |
d) | Revalued assets |
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e) | Assets under finance lease |
Accumulated | ||||||||||||
Asset | Cost | Depreciation | Net Value | |||||||||
Thousands of Euros | ||||||||||||
Technical installations and other property, plant and equipment | 18,766 | (4,245 | ) | 14,521 | ||||||||
18,766 | (4,245 | ) | 14,521 | |||||||||
Accumulated | ||||||||||||
Asset | Cost | Depreciation | Net Value | |||||||||
Thousands of Euros | ||||||||||||
Technical installations and other property, plant and equipment | 19,641 | (5,507 | ) | 14,134 | ||||||||
19,641 | (5,507 | ) | 14,134 | |||||||||
f) | Fully-depreciated assets |
g) | Self-constructed property, plant and equipment |
(10) | Investments Accounted for Using the Equity Method |
Balances at | Translation | Balances at | ||||||||||||||
31/12/06 | Additions | Differences | 31/12/07 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Equity accounted investments | 253 | 19 | (29 | ) | 243 | |||||||||||
Balances at | Translation | Balances at | ||||||||||||||
31/12/07 | Additions | Differences | 31/12/08 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Equity accounted investments | 243 | 24 | 107 | 374 | ||||||||||||
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Balances at | Translation | Balances at | ||||||||||||||
31/12/08 | Additions | Differences | 31/12/09 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Equity accounted investments | 374 | 51 | (42 | ) | 383 | |||||||||||
Percentage | ||||||||||||||||||||||||
Country | Ownership | Assets | Liabilities | Equity | Result | |||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
31/12/2007 | ||||||||||||||||||||||||
Quest International, Inc | USA | 35 | % | 1,348 | 493 | 855 | 54 | |||||||||||||||||
31/12/2008 | ||||||||||||||||||||||||
Quest International, Inc | USA | 35 | % | 1,736 | 667 | 1,069 | 69 | |||||||||||||||||
31/12/2009 | ||||||||||||||||||||||||
Quest International, Inc | USA | 35 | % | 1,664 | 580 | 1,084 | 145 | |||||||||||||||||
(11) | Non-Current Financial Assets |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Non-current guarantee deposits | 1,142 | 1,113 | 868 | |||||||||
Assets available for sale | 501 | 523 | 23 | |||||||||
Loans to third parties | 2,088 | — | — | |||||||||
Non-current financial assets | 3,731 | 1,636 | 891 | |||||||||
• | The interest of less than 1% that the Group holds in Northfield Laboratories, Inc. (USA). At 31 December 2009 provision has been made for the full amount of this investment. In 2009, 2008 and 2007 this investment was measured at fair value. | |
• | The interest of less than 2% in the share capital of biotechnology company, Cardio 3 Bioscience (Belgium) acquired by Grifols, S.A. in December 2008 for an amount of Euros 500 thousand. The activity of this company involves research into and the development of biological therapies using stem cells for the treatment of cardiovascular diseases. The Group has measured this asset at cost in 2009 and 2008, as its fair value cannot be reliably determined. |
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(12) | Inventories |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Goods for resale | 65,718 | 54,509 | ||||||
Raw materials and other supplies | 170,987 | 142,209 | ||||||
Work in progress and semi-finished goods | 146,612 | 112,345 | ||||||
Finished goods | 101,145 | 64,594 | ||||||
484,462 | 373,657 | |||||||
Less, provision for obsolescence | — | (559 | ) | |||||
484,462 | 373,098 | |||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
* | * | * | ||||||||||
Thousands of Euros | ||||||||||||
Inventories of goods for resale | ||||||||||||
Net purchases | 50,886 | 79,902 | 34,542 | |||||||||
Changes in inventories | (9,201 | ) | (22,700 | ) | (4,098 | ) | ||||||
41,685 | 57,202 | 30,444 | ||||||||||
Raw materials and other supplies | ||||||||||||
Net purchases | 274,537 | 190,667 | 189,909 | |||||||||
Changes in inventories | (29,948 | ) | (41,131 | ) | (24,045 | ) | ||||||
244,589 | 149,536 | 165,864 | ||||||||||
Materials consumed | 286,274 | 206,738 | 196,308 | |||||||||
Changes in inventories of finished goods and work in progress | (73,093 | ) | (31,058 | ) | (16,882 | ) | ||||||
Changes in inventories of finished goods and work in progress and materials consumed | 213,181 | 175,680 | 179,426 | |||||||||
* | Expenses/(Income) |
2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Inventories of goods for resale at 1 January | 54,509 | 37,138 | 33,850 | |||||||||
Business combinations | 158 | — | — | |||||||||
Net cancellations for the year | (568 | ) | (515 | ) | (7 | ) | ||||||
Increase in inventories of goods for resale | 9,201 | 22,700 | 4,098 | |||||||||
Translation differences | 2,418 | (4,814 | ) | (803 | ) | |||||||
Goods for resale at 31 December | 65,718 | 54,509 | 37,138 | |||||||||
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2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Inventories of raw materials at 1 January | 142,209 | 96,044 | 77,214 | |||||||||
Business combinations | 824 | — | — | |||||||||
Increase in raw materials | 29,948 | 41,131 | 24,045 | |||||||||
Translation differences | (1,994 | ) | 5,034 | (5,215 | ) | |||||||
Inventories of raw materials at 31 December | 170,987 | 142,209 | 96,044 | |||||||||
2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Inventories of finished goods and work in progress | 176,939 | 138,226 | 127,340 | |||||||||
Business combinations | 2,567 | — | — | |||||||||
Increase in inventories of finished goods and work in progress | 73,093 | 31,058 | 16,882 | |||||||||
Translation differences | (4,842 | ) | 7.655 | (5,996 | ) | |||||||
Inventories of finished goods and work in progress at 31 December | 247,757 | 176,939 | 138,226 | |||||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Currency | ||||||||||||
US Dollar | 196,936 | 168,037 | 139,240 | |||||||||
Other currencies | 4,498 | 7,315 | 6,540 |
2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Balance at 1 January | 559 | 749 | 2,929 | |||||||||
Net charges for the year | — | 341 | (2,096 | ) | ||||||||
Net cancellations during the year | (568 | ) | (515 | ) | (7 | ) | ||||||
Translation differences | 9 | (16 | ) | (77 | ) | |||||||
Balance at 31 December | — | 559 | 749 | |||||||||
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(13) | Trade and Other Receivables |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Trade receivables | 207,840 | 186,324 | ||||||
Other trade receivables | 27,210 | 17,322 | ||||||
Associates | 812 | — | ||||||
Personnel | 395 | 298 | ||||||
Advances for fixed assets | 1,103 | 1,429 | ||||||
Other advances | 1,844 | 1,960 | ||||||
Public entities, other receivables | 8,176 | 22,434 | ||||||
Other receivables | 39,540 | 43,443 | ||||||
Current income tax assets | 7,802 | 5,428 | ||||||
255,182 | 235,195 | |||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Currency | ||||||||
US Dollar | 45,297 | 38,171 | ||||||
Chilean Peso | 12,778 | 6,968 | ||||||
Mexican Peso | 7,986 | 5,335 | ||||||
Argentinean Peso | 3,404 | 2,412 | ||||||
Brazilian Real | 3,225 | 1,596 | ||||||
Czech Crown | 3,217 | 3,214 | ||||||
Pound Sterling | 2,849 | 2,543 | ||||||
Thai Baht | 1,366 | 1,569 | ||||||
Polish Zloty | 1,292 | — | ||||||
Australian Dollar | 1,101 | — | ||||||
Other currencies | 1,644 | 1,050 |
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31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Taxation authorities, VAT | 7,451 | 21,062 | ||||||
Taxation authorities, grants | — | 173 | ||||||
Social Security | 107 | 118 | ||||||
Other public entities | 618 | 1,081 | ||||||
Public entities, other receivables | 8,176 | 22,434 | ||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Recoverable income tax: | ||||||||
Current year | 7,188 | 3,746 | ||||||
Prior years | 614 | 1,682 | ||||||
Current tax assets | 7,802 | 5,428 | ||||||
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(14) | Other Current Financial Assets |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Current investments | 5,943 | 6,657 | ||||||
Guarantee deposits | 209 | 23 | ||||||
Current loans to third parties | 395 | — | ||||||
Financial derivatives (note 30) | 1,670 | — | ||||||
Total other current financial assets | 8,217 | 6,680 | ||||||
(15) | Equity |
(a) | Share capital |
Percentage Ownership | ||||||||
31/12/09 | 31/12/08 | |||||||
Scranton Enterprises, B.V. | 10.65 | % | 10.65 | % | ||||
Other | 89.35 | % | 89.35 | % | ||||
100.00 | % | 100.00 | % | |||||
(b) | Share premium |
(c) | Reserves |
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(d) | Own shares |
Thousands of | ||||||||
No. of Shares | Euros | |||||||
Balance at 1 January 2008 | 2,100,463 | 28,893 | ||||||
Acquisitions | 361,159 | 4,880 | ||||||
Disposals | (50,000 | ) | (686 | ) | ||||
Balance at 31 December 2008 | 2,411,622 | 33,087 | ||||||
Thousands of | ||||||||
No. of Shares | Euros | |||||||
Balance at 1 January 2009 | 2,411,622 | 33,087 | ||||||
Acquisitions | 2,176,929 | 25,186 | ||||||
Disposals | (4,535,225 | ) | (57,596 | ) | ||||
Balance at 31 December 2009 | 53,326 | 677 | ||||||
(e) | Distribution of profits |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Legal reserves | 2,649 | 6,496 | ||||||
Other reserves | 11,561 | 9,776 | ||||||
Dividends | 27,229 | 48,691 | ||||||
Interim dividends | 31,960 | — | ||||||
73,399 | 64,963 | |||||||
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2008 | ||||||||||||
% of par | Euro per | |||||||||||
Value | Share | Amount | ||||||||||
Thousands of Euros | ||||||||||||
Ordinary shares | 34 | 0.17 | 34,767 | |||||||||
Total dividends paid in 2008 | 34 | 0.17 | 34,767 | |||||||||
Dividends with a charge to profits | 24 | 0.12 | 24,737 | |||||||||
Dividends with a charge to reserves or share premium | 10 | 0.05 | 10,030 | |||||||||
Total dividends paid in 2008 | 34 | 0.17 | 34,767 | |||||||||
30/06/2009 | ||||||||||||
% of par | Euro per | |||||||||||
Value | Share | Amount | ||||||||||
Thousands of Euros | ||||||||||||
Ordinary shares | 46 | 0.23 | 48,691 | |||||||||
Total dividends paid in June 2009 | 46 | 0.23 | 48,691 | |||||||||
Dividends with a charge to profits | 46 | 0.23 | 48,691 | |||||||||
Total dividends paid in June 2009 | 46 | 0.23 | 48,691 | |||||||||
31/12/2009 | ||||||||||||
% of par | Euro per | |||||||||||
Value | Share | Amount | ||||||||||
Thousands of Euros | ||||||||||||
Ordinary shares | 30 | 0.15 | 31,960 | |||||||||
Total dividends paid in December 2009 | 30 | 0.15 | 31,960 | |||||||||
Interim dividend | 30 | 0.15 | 31,960 | |||||||||
Total dividends paid in December 2009 | 30 | 0.15 | 31,960 | |||||||||
(f) | Cash flow hedges |
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(16) | Earnings per Share |
2009 | 2008 | 2007 | ||||||||||
Profit for the year attributable to equity holders of the Parent (thousands of euros) | 147,972 | 121,728 | 87,774 | |||||||||
Weighted average number of ordinary shares in circulation | 209,451,806 | 210,707,597 | 212,106,273 | |||||||||
Basic earnings per share (euros per share) | 0.706 | 0.578 | 0.414 | |||||||||
Number of Shares | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Issued ordinary shares at 1 January | 210,653,277 | 210,964,436 | 213,064,899 | |||||||||
Effect of own shares | (1,201,471 | ) | (256,839 | ) | (958,626 | ) | ||||||
209,451,806 | 210,707,597 | 212,106,273 | ||||||||||
(17) | Minority Interests |
Balances at | Translation | Balances at | ||||||||||||||||||
31/12/07 | Additions | Disposals | Differences | 31/12/08 | ||||||||||||||||
Thousands of Euros | ||||||||||||||||||||
Grifols (Thailand) Pte Ltd. | 764 | 334 | (15 | ) | (106 | ) | 977 | |||||||||||||
Grifols Malaysia Sdn Bhd. | 217 | 54 | — | 2 | 273 | |||||||||||||||
981 | 388 | (15 | ) | (104 | ) | 1,250 | ||||||||||||||
Balances at | Business | Translation | Balances at | |||||||||||||||||||||
31/12/08 | Additions | Combinations | Disposals | Differences | 31/12/09 | |||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
Grifols (Thailand) Pte Ltd. | 977 | 308 | — | (112 | ) | 30 | 1,203 | |||||||||||||||||
Grifols Malaysia Sdn Bhd. | 273 | 35 | — | — | (5 | ) | 303 | |||||||||||||||||
Woolloomooloo Holdings Pty Ltd. | — | (745 | ) | 9,876 | (106 | ) | 1,626 | 10,651 | ||||||||||||||||
1,250 | (402 | ) | 9,876 | (218 | ) | 1,651 | 12,157 | |||||||||||||||||
(note 3.3) |
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(18) | Grants |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Capital grants | 2,025 | 2,015 | ||||||
Interest-rate grants (preference loans) | 286 | 338 | ||||||
Grants | 2,311 | 2,353 | ||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Total amount of capital grant: | ||||||||
Prior to 1995 | 330 | 330 | ||||||
1995 | 627 | 627 | ||||||
1996 | 54 | 54 | ||||||
1997 | 426 | 426 | ||||||
1998 | 65 | 65 | ||||||
1999 | 42 | 42 | ||||||
2000 | 181 | 181 | ||||||
2001 | 214 | 214 | ||||||
2002 | 626 | 626 | ||||||
2004 | 1,940 | 1,940 | ||||||
2005 | 35 | 35 | ||||||
2006 | 35 | 35 | ||||||
2007 | 33 | 33 | ||||||
2008 | 124 | 124 | ||||||
Current period | 742 | — | ||||||
5,474 | 4,732 | |||||||
Less, revenues recognised: | ||||||||
Prior years | (2,444 | ) | (2,189 | ) | ||||
Current year | (696 | ) | (255 | ) | ||||
(3,140 | ) | (2,444 | ) | |||||
Translation differences | (309 | ) | (273 | ) | ||||
Net value of capital grants | 2,025 | 2,015 | ||||||
Balances at | Transfers to | Balances at | ||||||||||||||
31/12/06 | Additions | Profit or Loss | 31/12/07 | |||||||||||||
Interest-rate grants (preference loans) | 2,326 | 614 | (477 | ) | 2,463 | |||||||||||
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Balances at | Transfers to | Balances at | ||||||||||||||
31/12/07 | Additions | Profit or Loss | 31/12/08 | |||||||||||||
Interest-rate grants (preference loans) | 2,463 | 561 | (2,686 | ) | 338 | |||||||||||
Balances at | Transfers to | Balances at | ||||||||||||||
31/12/08 | Additions | Profit or Loss | 31/12/09 | |||||||||||||
Interest-rate grants (preference loans) | 338 | 440 | (492 | ) | 286 | |||||||||||
(19) | Provisions |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Non-current provisions(a) | ||||||||
Provisions for pensions and similar obligations | 595 | 951 | ||||||
Other provisions | 637 | 2.094 | ||||||
Non-current provisions | 1,232 | 3,045 | ||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Current provisions(b) | ||||||||
Trade provisions | 4,702 | 3,830 | ||||||
Current provisions | 4,702 | 3,830 | ||||||
(a) | Non-current provisions |
Balances at | Translation | Balances at | ||||||||||||||
31/12/07 | Charges | Differences | 31/12/08 | |||||||||||||
Thousands of Euros | ||||||||||||||||
Non-current provisions | 999 | 2,051 | (5 | ) | 3,045 | |||||||||||
Balances at | Business | Translation | Balances at | |||||||||||||||||||||
31/12/08 | Combination | Reversal | Cancellation | Differences | 31/12/09 | |||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
Non-current provisions | 3,045 | 102 | (1,411 | ) | (457 | ) | (47 | ) | 1,232 | |||||||||||||||
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(b) | Current provisions |
Balances at | Translation | Balances at | ||||||||||||||||||
31/12/07 | Reversal | Cancellation | Differences | 31/12/08 | ||||||||||||||||
Thousands of Euros | ||||||||||||||||||||
Trade provisions | 3,957 | (97 | ) | (30 | ) | — | 3,830 | |||||||||||||
Balances at | Business | Translation | Balances at | |||||||||||||||||
31/12/08 | combination | Charges | Differences | 31/12/09 | ||||||||||||||||
Thousands of Euros | ||||||||||||||||||||
Trade provisions | 3,830 | 198 | 636 | 38 | 4,702 | |||||||||||||||
(20) | Financial Liabilities |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Non-current financial liabilities | ||||||||||||
Corporate bonds (a.1) | 410,552 | — | — | |||||||||
Bonds | 410,552 | — | — | |||||||||
Club Deal / Syndicated loan (a.2) | 195,471 | 225,320 | 138,211 | |||||||||
Other loans (a.2) | 90,961 | 79,069 | 34,727 | |||||||||
Finance lease liabilities (a.3) | 6,202 | 7,124 | 5,487 | |||||||||
Loans and borrowings | 292,634 | 311,513 | 178,425 | |||||||||
Loans and borrowings and bonds or other non-current marketable securities(a) | 703,186 | 311,513 | 178,425 | |||||||||
Preference loans extended by the Spanish Ministry of Science and Technology(b) | 11,135 | 10,685 | 9,670 | |||||||||
Debt on the acquisition of the plasma centre(b) | 1,050 | 1,098 | — | |||||||||
Debt with Novartis(b) | — | 759 | 1,394 | |||||||||
Other | 367 | — | — | |||||||||
Other non-current financial liabilities(b) | 12,552 | 12,542 | 11,064 | |||||||||
715,738 | 324,055 | 189,489 | ||||||||||
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31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Club Deal / Syndicated loan | 1,195 | 1,237 | 172 | |||||||||
Other | 910 | 1,008 | 851 | |||||||||
2,105 | 2,245 | 1,023 | ||||||||||
(a) | Loans and borrowings and bonds or other non-current marketable securities |
F-73
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Thousands of | ||||
Euros | ||||
Opening balance | ||||
Issuance of corporate bonds in the USA | 409,411 | |||
Transaction costs | (5,967 | ) | ||
403,445 | ||||
Movements | ||||
Transferred to profit and loss | 150 | |||
Corporate bonds issued in the USA, exchange differences | 338 | |||
Translation differences | 6,620 | |||
Closing balance | ||||
Corporate bonds issued in the USA | 416,465 | |||
Transaction costs | (5,913 | ) | ||
410,552 | ||||
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31/12/09 | 31/12/08 | |||||||||||||||
Current | Non-Current | Current | Non-Current | |||||||||||||
Thousands of Euros | ||||||||||||||||
Minimum payments | 5,088 | 6,675 | 5,491 | 7,667 | ||||||||||||
Interest | (354 | ) | (473 | ) | (551 | ) | (543 | ) | ||||||||
Present value | 4,734 | 6,202 | 4,940 | 7,124 | ||||||||||||
31/12/09 | 31/12/08 | |||||||||||||||||||||||
Minimum | Minimum | Present | ||||||||||||||||||||||
Payments | Interest | Present Value | Payments | Interest | Value | |||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
Maturity at: | ||||||||||||||||||||||||
Less than one year | 5,088 | 354 | 4,734 | 5,491 | 551 | 4,940 | ||||||||||||||||||
Two years | 3,364 | 200 | 3,164 | 4,050 | 302 | 3,748 | ||||||||||||||||||
Three years | 1,382 | 114 | 1,268 | 2,099 | 129 | 1,970 | ||||||||||||||||||
Four years | 831 | 72 | 759 | 580 | 63 | 517 | ||||||||||||||||||
Five years | 577 | 41 | 536 | 536 | 34 | 502 | ||||||||||||||||||
More than five years | 521 | 46 | 475 | 402 | 15 | 387 | ||||||||||||||||||
Total | 11,763 | 827 | 10,936 | 13,158 | 1,094 | 12,064 | ||||||||||||||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Maturity at: | ||||||||
Two years | 81,388 | 46,231 | ||||||
Three years | 79,696 | 77,586 | ||||||
Four years | 75,905 | 76,261 | ||||||
Five years | 12,506 | 69,382 | ||||||
More than five years | 453,691 | 42,053 | ||||||
703,186 | 311,513 | |||||||
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(b) | Other non-current financial liabilities |
31/12/09 | 31/12/08 | |||||||||||||||||||||||
Company | Date Awarded | Amount Awarded | Non-Current | Current | Non-Current | Current | ||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
Instituto Grifols S.A. | 22/02/2002 | 749 | — | — | — | 106 | ||||||||||||||||||
Instituto Grifols S.A. | 31/01/2001 | 637 | — | 86 | 81 | 86 | ||||||||||||||||||
Instituto Grifols S.A. | 13/02/2002 | 691 | 89 | 94 | 173 | 94 | ||||||||||||||||||
Instituto Grifols S.A. | 17/01/2003 | 1,200 | 307 | 165 | 451 | 165 | ||||||||||||||||||
Instituto Grifols S.A. | 13/11/2003 | 2,000 | 762 | 279 | 993 | 279 | ||||||||||||||||||
Instituto Grifols S.A. | 17/01/2005 | 2,680 | 1,345 | 375 | 1,646 | 375 | ||||||||||||||||||
Instituto Grifols S.A. | 29/12/2005 | 2,100 | 1,253 | 288 | 1,471 | 287 | ||||||||||||||||||
Instituto Grifols S.A. | 29/12/2006 | 1,700 | 1,190 | 234 | 1,357 | — | ||||||||||||||||||
Instituto Grifols S.A. | 27/12/2007 | 1,700 | 1,324 | — | 1,256 | — | ||||||||||||||||||
Instituto Grifols S.A. | 31/12/2008 | 1,419 | 1,131 | — | 1,089 | — | ||||||||||||||||||
Instituto Grifols S.A. | 16/01/2009 | 1,540 | 1,249 | — | — | — | ||||||||||||||||||
Laboratorios Grifols, S.A. | 20/03/2001 | 219 | — | 30 | 28 | 30 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 29/01/2002 | 210 | 27 | 29 | 53 | 29 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 15/01/2003 | 220 | 56 | 30 | 83 | 30 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 26/09/2003 | 300 | 111 | 41 | 144 | 41 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 22/10/2004 | 200 | 100 | 28 | 123 | 28 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 20/12/2005 | 180 | 107 | 25 | 126 | 25 | ||||||||||||||||||
Laboratorios Grifols, S.A. | 29/12/2006 | 400 | 273 | 54 | 312 | — | ||||||||||||||||||
Laboratorios Grifols, S.A. | 27/12/2007 | 360 | 242 | — | 266 | — | ||||||||||||||||||
Laboratorios Grifols, S.A. | 31/12/2008 | 600 | 478 | — | 460 | — | ||||||||||||||||||
Diagnostic Grifols, S.A. | 27/11/2008 | 857 | 468 | 129 | 573 | 129 | ||||||||||||||||||
Grifols Engineering, S.A. | 21/04/2009 | 524 | 447 | — | — | — | ||||||||||||||||||
Grifols Engineering, S.A. | 21/04/2009 | 203 | 176 | — | — | — | ||||||||||||||||||
20,689 | 11,135 | 1,887 | 10,685 | 1,704 | ||||||||||||||||||||
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31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Maturity at: | ||||||||
Two years | 2,632 | 3,393 | ||||||
Three years | 2,883 | 2,127 | ||||||
Four years | 2,026 | 1,923 | ||||||
Five years | 1,867 | 1,676 | ||||||
More than five years | 3,144 | 3,423 | ||||||
12,552 | 12,542 | |||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Current financial liabilities | ||||||||
Bonds(c.1) | 6,407 | 5,580 | ||||||
Interest of issuance corporate bonds in the USA(c.1) | 6,716 | — | ||||||
Bonds | 13,123 | 5,580 | ||||||
Club Deal/Syndicated loan(c.2) | 33,014 | (200 | ) | |||||
Other loans(c.2) | 63,120 | 137,227 | ||||||
Finance lease liabilities(c.2) | 4,734 | 4,940 | ||||||
Loans and borrowings | 100,868 | 141,967 | ||||||
Loans and borrowings and bonds and other marketable securities(c) | 113,991 | 147,547 | ||||||
Financial derivatives (note 30) | 3,333 | 796 | ||||||
Preference loans extended by the Spanish Ministry of Science and Technology(b) | 1,887 | 1,704 | ||||||
Receivables from social security affiliated entities transferred to | ||||||||
a financial institution(d) | 5,459 | 5,274 | ||||||
Debt on the acquisition of the plasma centre(b) | 442 | 883 | ||||||
Debt with Novartis(b) | 779 | 806 | ||||||
Debt for acquisition of Plasma Collection Centres, Inc. | — | — | ||||||
Guarantee deposits received | 59 | 56 | ||||||
Other current financial payables | 271 | 166 | ||||||
Other current financial liabilities | 12,230 | 9,685 | ||||||
126,221 | 157,232 | |||||||
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31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Syndicated loan | 656 | 440 | ||||||
Other loans | 169 | 141 | ||||||
825 | 581 | |||||||
(c) | Loans and borrowings and bonds or other current marketable securities |
Interest | ||||||||||
Rate(*) | Drawn Down | |||||||||
Min — Max | 31/12/09 | 31/12/08 | ||||||||
Thousands of Euros | ||||||||||
Loans in: | ||||||||||
U.S. Dollars | 1.034% — 6.093% | 3,010 | 64,207 | |||||||
Euros | 1.042% — 6.25% | 73,664 | 58,870 | |||||||
Other currencies | TIIE+2% — 14% | 18,449 | 11,170 | |||||||
95,123 | 134,247 | |||||||||
Discounted trade notes (note 13) | 1.42 — 7.85% | 1,298 | 2,117 | |||||||
Current interest on loans and borrowings | 538 | 1,244 | ||||||||
Finance lease payables | 5,088 | 5,491 | ||||||||
102,047 | 143,099 | |||||||||
Less, current portion of deferred finance expenses for leasing | (354 | ) | (551 | ) | ||||||
Less, current portion of loan arrangement expenses | (825 | ) | (581 | ) | ||||||
100,868 | 141,967 | |||||||||
(*) | Loans accrued variable interest rates. |
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(d) | Other current financial liabilities |
(21) | Trade and Other Payables |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Suppliers | ||||||||
Suppliers and trade payables | 115,337 | 99,985 | ||||||
Advances received | 5,550 | 7,599 | ||||||
Other | 22 | 29 | ||||||
120,909 | 107,613 | |||||||
Public entities, other payables | 17,832 | 9,068 | ||||||
Current income tax liabilities | 3,258 | 16,362 | ||||||
141,999 | 133,043 | |||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Currency | ||||||||
US Dollar | 31,377 | 30,010 | ||||||
Pound Sterling | 266 | 359 | ||||||
Japanese Yen | 162 | 1.300 | ||||||
Czech Crown | 380 | 403 | ||||||
Chilean Peso | 894 | 285 | ||||||
Brazilian Real | 621 | 536 | ||||||
Australian Dollar | 785 | — | ||||||
Swiss Franc | 686 | — | ||||||
Other currencies | 469 | 211 |
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31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Taxation authorities, VAT/Canary Islands Tax | 3,292 | 3,718 | ||||||
Taxation authorities, withholdings | 8,184 | 2,537 | ||||||
Social Security | 3,027 | 2,742 | ||||||
Other public entities | 3,329 | 71 | ||||||
Public entities, other payables | 17,832 | 9,068 | ||||||
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Taxation authorities, income tax: | ||||||||
Current year | 3,185 | 16,073 | ||||||
Prior years | 73 | 289 | ||||||
Current tax liabilities | 3,258 | 16,362 | ||||||
(22) | Other Current Liabilities |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Salaries payable | 24,367 | 21,987 | ||||||
Other payables | 1,754 | 1,446 | ||||||
Other current liabilities | 26,121 | 23,433 | ||||||
(23) | Revenues |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
% | ||||||||||||
Bioscience | 76 | 76 | 70 | |||||||||
Diagnostics | 10 | 10 | 11 | |||||||||
Hospital | 10 | 10 | 11 | |||||||||
Raw materials | 3 | 3 | 7 | |||||||||
Others | 1 | 1 | 1 | |||||||||
100 | 100 | 100 | ||||||||||
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31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
% | ||||||||||||
European Union | 47 | % | 50 | % | 54 | % | ||||||
United States | 32 | % | 36 | % | 34 | % | ||||||
Rest of the world | 21 | % | 14 | % | 12 | % | ||||||
100 | % | 100 | % | 100 | % | |||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Currency | ||||||||||||
US Dollar | 349,064 | 304,445 | 252,410 | |||||||||
Pound Sterling | 33,668 | 36,668 | 39,709 | |||||||||
Mexican Peso | 36,472 | 29,182 | 22,990 | |||||||||
Chilean Peso | 21,083 | 16,047 | 12,242 | |||||||||
Czech Crown | 12,863 | 12,568 | 13,184 | |||||||||
Brazilian Real | 21,262 | 15,916 | 6,828 | |||||||||
Thai Baht | 6,483 | 6,302 | 5,545 | |||||||||
Argentinean Peso | 11,323 | 9,145 | 5,395 | |||||||||
Singapore Dollar | 3,940 | 4,272 | 3,809 | |||||||||
Malaysian Ringgit | 21,812 | 2,488 | 1,909 | |||||||||
Slovak Koruna | — | — | 28 | |||||||||
Polish Zloty | 13,525 | — | — | |||||||||
Australian Dollar | 6,387 | — | — | |||||||||
Swiss Franc | 3,849 | — | — | |||||||||
New Zealand Dollar | 929 | — | — |
(24) | Personnel Expenses |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Wages and salaries | 219,803 | 191,644 | 173,927 | |||||||||
Contributions to pension plans (note 29) | 1,571 | 1,365 | 1,619 | |||||||||
Other social charges | 8,072 | 6,310 | 4,901 | |||||||||
Social Security | 43,722 | 38,840 | 28,602 | |||||||||
273,168 | 238,159 | 209,049 | ||||||||||
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(25) | Other Operating Income and Expenses |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Changes in trade provisions (notes 12, 30 and 19(b)) | 1,348 | 561 | (1,253 | ) | ||||||||
Professional services | 32,977 | 29,949 | 25,022 | |||||||||
Supplies and other materials | 28,859 | 26,874 | 22,274 | |||||||||
Operating leases (note 28 (a)) | 17,364 | 16,583 | 11,142 | |||||||||
Freight | 20,518 | 19.485 | 15,707 | |||||||||
Repairs and maintenance costs | 21,365 | 17,642 | 12,978 | |||||||||
Advertising | 15,580 | 16.872 | 13,830 | |||||||||
Insurance | 10,803 | 10.367 | 10,787 | |||||||||
Royalties and service charges | 4,954 | 8,760 | 5,236 | |||||||||
Travel expenses | 11,935 | 14,210 | 11,962 | |||||||||
External services | 25,024 | 21,891 | 18,465 | |||||||||
Others | 12,654 | 9,094 | 6,889 | |||||||||
Other operating expenses | 203,381 | 192,288 | 158,273 | |||||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Income from insurance claims | 807 | 584 | 780 | |||||||||
Grants | 378 | 497 | 908 | |||||||||
Other income | 258 | 208 | 634 | |||||||||
Other operating income | 1,443 | 1,289 | 2,322 | |||||||||
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(26) | Finance Income and Expense |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Interest from Social Security | 6,510 | 2,212 | 2,847 | |||||||||
Other finance income | 557 | 470 | 1,679 | |||||||||
Finance income | 7,067 | 2,682 | 4,526 | |||||||||
Syndicated loan (other finance expenses) | (747 | ) | (1,849 | ) | (694 | ) | ||||||
Syndicated loan (interest) | (6,289 | ) | (12,152 | ) | (9,042 | ) | ||||||
Finance expenses from sale of receivables (note 13) | (2,531 | ) | (2,128 | ) | (786 | ) | ||||||
Interests costs of Corporate bonds issued in the USA (note 20) | (6,766 | ) | — | — | ||||||||
Implicit interest on preference loans (note 20(b)) | (616 | ) | (516 | ) | (477 | ) | ||||||
Capitalised interest* | 1,278 | — | — | |||||||||
Other finance expenses | (11,416 | ) | (12,660 | ) | (12,524 | ) | ||||||
Finance expenses | (27,087 | ) | (29,305 | ) | (23,523 | ) | ||||||
Change in fair value of financial derivatives (note 30) | (587 | ) | (1,268 | ) | 829 | |||||||
Impairment and losses on disposal of financial instruments | (245 | ) | 0 | 0 | ||||||||
Exchange differences | (1,733 | ) | (2,825 | ) | (4,618 | ) | ||||||
Finance income and expense | (22,585 | ) | (30,716 | ) | (22,786 | ) | ||||||
* | Since 1 January 2009 the Group has capitalised interest at a rate of between 3% and 4% (see note 3 (e)). |
(27) | Income Tax |
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Table of Contents
a) | Reconciliation of accounting and taxable income |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Profit for the year before income tax | 203,994 | 172,269 | 123,587 | |||||||||
Tax at 30% / 30% / 32.5% | 61,198 | 51,680 | 40,166 | |||||||||
Permanent differences | 1,935 | 2,678 | 104 | |||||||||
Effect of different tax rates | 5,159 | 4,366 | 769 | |||||||||
Deductions for research and development | (8,106 | ) | (5,403 | ) | (4,728 | ) | ||||||
Other deductions | (4,548 | ) | (4,199 | ) | (837 | ) | ||||||
Expense for income tax in prior years | 445 | (3 | ) | 21 | ||||||||
Other income tax expenses/(income) | 341 | 1,034 | (256 | ) | ||||||||
Total income tax expense | 56,424 | 50,153 | 35,239 | |||||||||
Deferred tax expenses | 8,832 | 6,987 | 6,414 | |||||||||
Current income tax | 47,592 | 43,166 | 28,825 | |||||||||
Total | 56,424 | 50,153 | 35,239 | |||||||||
b) | Deferred tax assets and liabilities |
Tax Effect | ||||||||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Assets | ||||||||||||
Rights to tax deductions | 5,992 | 13,215 | 19,667 | |||||||||
Tax loss carryforwards | 88 | 163 | 181 | |||||||||
Fixed assets, amortisation and depreciation | 728 | 299 | 651 | |||||||||
Unrealised margins on inventories | 19,814 | 17,222 | 6,613 | |||||||||
Provision for bad debts | 444 | 281 | 332 | |||||||||
Inventories | 225 | 1,004 | 985 | |||||||||
Cash flow hedges | 1,247 | — | — | |||||||||
Others | 4,857 | 2,113 | 5,681 | |||||||||
33,395 | 34,297 | 34,110 | ||||||||||
Liabilities | ||||||||||||
Goodwill | 15,186 | 12,423 | 9,661 | |||||||||
Revaluations of assets | 15,011 | 15,345 | 15,302 | |||||||||
Fixed assets, amortisation and depreciation | 23,873 | 14,028 | 13,537 | |||||||||
Finance leases | 3,634 | 3,647 | 2,917 | |||||||||
Inventories | — | 2,041 | — | |||||||||
Provision for investments | 873 | 2,322 | 2,322 | |||||||||
Others | 1,748 | 2,163 | 55 | |||||||||
60,325 | 51,969 | 43,794 | ||||||||||
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2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Deferred tax assets | ||||||||||||
Balance at 1 January | 34,297 | 34,110 | 41,451 | |||||||||
Movements during the year | (1,478 | ) | 687 | (7,068 | ) | |||||||
Business combinations (note 3.3) | 500 | — | — | |||||||||
Adjustments for changes in tax rate through profit and loss | 69 | (514 | ) | 87 | ||||||||
Adjustments for changes in tax rate through equity | — | — | 101 | |||||||||
Translation differences | 7 | 14 | (461 | ) | ||||||||
Balance at 31 December | 33,395 | 34,297 | 34,110 | |||||||||
2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Deferred tax liabilities | ||||||||||||
Balance at 1 January | 51,969 | 43,794 | 45,862 | |||||||||
Movements during the year | 7,423 | 6,721 | (438 | ) | ||||||||
Business combinations (note 3.3) | 1,761 | — | — | |||||||||
Adjustments for changes in tax rate through profit and loss | — | 439 | (129 | ) | ||||||||
Translation differences | (828 | ) | 1,015 | (1,501 | ) | |||||||
Balance at 31 December | 60,325 | 51,969 | 43,794 | |||||||||
Tax Effect | ||||||||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Available-for-sale financial assets | (69 | ) | 3 | 43 | ||||||||
Cash flow hedges (note 15(g)) | 1,247 | — | — | |||||||||
1,178 | 3 | 43 | ||||||||||
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Year of Origin | 2009 | 2008 | Applicable through | |||||||||
2005 | — | 113 | 2020 | |||||||||
2006 | — | 2,345 | 2021 | |||||||||
2007 | — | 4,792 | 2022 | |||||||||
2008 | 417 | 5,965 | 2023 | |||||||||
2009 (estimated) | 5,575 | — | 2024 | |||||||||
5,992 | 13,215 | |||||||||||
c) | Years open to inspection |
• | Notification of the completion of the inspection of Biomat USA, Inc., resulting in a favourable conclusion. |
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• | Grifols, S.A., Instituto Grifols, S.A., Laboratorios Grifols, S.A. and Movaco, S.A.: income tax for 2004 to 2007, Value Added Tax , personal income tax and capital gains tax for 2005 to 2007. |
• | Grifols Italia, S.p.A.: income tax, VAT and withholdings for 2006. Group management does not expect any significant liabilities to arise as a result of inspection. | |
• | Logística Grifols, S.A. de CV: Tax ruling on the financial statements, taxes, audit work papers, foreign trade and banking operations for 2006. Group management does not expect any significant liabilities to arise as a result of inspection. |
• | Notification of the favourable completion of the inspection of Grifols Deutschland, except for a euros 150 thousand which was taken to profit and loss in 2008. | |
• | Notification of the favourable completion of the inspection of Grifols, Inc., Grifols Biologicals, Inc., Grifols USA, Inc. and Plasmacare, Inc. | |
• | At 31 December 2008 Biomat Usa, Inc. was being inspected by the pertinent tax authorities. The Group’s management did not expect any significant additional assessments to arise as a result of this inspection. |
(28) | Operating Leases |
(a) | Operating leases (as lessee) |
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31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Maturity: | ||||||||||||
Up to 1 year | 10,098 | 9,575 | 7,597 | |||||||||
Between 1 and 5 years | 25,943 | 24,919 | 21,864 | |||||||||
More than 5 years | 8.084 | 7,192 | 5,472 | |||||||||
Total future minimum payments | 44.125 | 41,686 | 34,933 | |||||||||
(b) | Operating leases (as lessor) |
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Maturity: | ||||||||||||
Up to 1 year | 91 | 69 | 74 | |||||||||
Between 1 and 5 years | 56 | 50 | 109 | |||||||||
More than 5 years | 10 | — | — | |||||||||
Total future minimum payments | 157 | 119 | 183 | |||||||||
(29) | Other Commitments with Third Parties and Other Contingent Liabilities |
(a) | Guarantees |
(b) | Obligations with personnel |
(c) | Judicial procedures and arbitration |
• | Litigation was initiated in February 2000. Proceedings have been brought jointly against the Company and another plasma fractioning company. |
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• | A claim brought against the Health Board of Castilla y León in February 2005. |
• | The Company was notified in 2007 of a claim for maximum damages of euros 12,960 thousand filed by a group of 100 Catalan haemophiliacs against all plasma fractionation companies. During 2008 this claim was rejected by the Courts. This ruling has been appealed by the group of haemophiliacs and is currently awaiting court decision. |
• | Legal proceedings (consent decree) which were brought against the plasma fractioning centre in Los Angeles. |
(d) | Long-term materials supply contract |
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(30) | Financial Instruments |
31/12/08 | ||||||||||||||||
Financial | ||||||||||||||||
Available-for-Sale | Loans and | Liabilities held | Debts and | |||||||||||||
Financial Assets | Receivables | for Trading | Payables | |||||||||||||
Thousands of Euros | ||||||||||||||||
Non-current financial assets | 523 | 1,113 | — | — | ||||||||||||
Other current financial assets | — | 6,680 | — | — | ||||||||||||
Interest-rate swap | — | — | (796 | ) | — | |||||||||||
Trade and other receivables | — | 207,333 | — | — | ||||||||||||
Bank loans | — | — | — | (441,416 | ) | |||||||||||
Other financial liabilities | — | — | — | (21,431 | ) | |||||||||||
Bonds and other securities | — | — | — | (5,580 | ) | |||||||||||
Finance lease liabilities | — | — | — | (12,064 | ) | |||||||||||
Trade and other payables | — | — | — | (107,613 | ) | |||||||||||
Other current liabilities | — | — | — | (1,446 | ) | |||||||||||
523 | 215,126 | (796 | ) | (589,550 | ) | |||||||||||
31/12/09 | ||||||||||||||||
Financial Assets / | ||||||||||||||||
Available-for-Sale | Loans and | (Liabilities) Held | Debts and | |||||||||||||
Financial Assets | Receivables | for Trading | Payables | |||||||||||||
Thousands of Euros | ||||||||||||||||
Non-current financial assets | 501 | 3,230 | — | — | ||||||||||||
Other current financial assets | — | 6,547 | — | — | ||||||||||||
Interest-rate swap | — | — | (3,333 | ) | — | |||||||||||
Unquoted futures | — | — | 1,670 | — | ||||||||||||
Trade and other receivables | — | 239,204 | — | — | ||||||||||||
Bank loans | — | — | — | (382,566 | ) | |||||||||||
Other financial liabilities | — | — | — | (21,449 | ) | |||||||||||
Bonds and other securities | — | — | — | (423,675 | ) | |||||||||||
Finance lease liabilities | — | — | — | (10,936 | ) | |||||||||||
Trade and other payables | — | — | — | (120,909 | ) | |||||||||||
Other current liabilities | — | — | — | (1,754 | ) | |||||||||||
501 | 248,981 | (1,663 | ) | (961,289 | ) | |||||||||||
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31/12/08 | ||||||||||||||||
Assets at Fair | ||||||||||||||||
Value through | Loans and | Available-for-Sale | ||||||||||||||
Profit or Loss | Receivables | Financial Assets | Total | |||||||||||||
Thousands of Euros | ||||||||||||||||
Finance income at amortized cost | — | 2,682 | — | 2,682 | ||||||||||||
Net gains in profit and loss | — | 2,682 | — | 2,682 | ||||||||||||
Change in fair value | — | — | (6 | ) | (6 | ) | ||||||||||
Net losses in equity | — | — | (6 | ) | (6 | ) | ||||||||||
Total | — | 2,682 | (6 | ) | 2,676 | |||||||||||
31/12/09 | ||||||||||||||||
Assets at Fair | ||||||||||||||||
Value through | Loans and | Available-for-Sale | ||||||||||||||
Profit or Loss | Receivables | Financial Assets | Total | |||||||||||||
Thousands of Euros | ||||||||||||||||
Finance income at amortized cost | — | 7,067 | — | 7,067 | ||||||||||||
Change in fair value | 2,015 | — | — | 2,015 | ||||||||||||
Reclassification of equity to profit or loss | — | — | (172 | ) | (172 | ) | ||||||||||
Net gains/(losses) in profit and loss | 2,015 | 7,067 | (172 | ) | 8,910 | |||||||||||
Change in fair value | — | — | 14 | 14 | ||||||||||||
Net gains in equity | — | — | 14 | 14 | ||||||||||||
Total | 2,015 | 7,067 | (158 | ) | 8,924 | |||||||||||
31/12/08 | ||||||||||||
Liabilities at Fair | ||||||||||||
Value through | Debts and | |||||||||||
Profit or Loss | Payables | Total | ||||||||||
Thousands of Euros | ||||||||||||
Finance expenses at amortized cost | — | (29,305 | ) | (29,305 | ) | |||||||
Change in fair value | (1,268 | ) | — | (1,268 | ) | |||||||
Net losses in profit and loss | (1,268 | ) | (29,305 | ) | (30,573 | ) | ||||||
Total | (1,268 | ) | (29,305 | ) | (30,573 | ) | ||||||
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31/12/09 | ||||||||||||||||
Liabilities at Fair | ||||||||||||||||
Value through | Debts and | Hedging | ||||||||||||||
Profit or Loss | Payables | Derivatives | Total | |||||||||||||
Thousands of Euros | ||||||||||||||||
Finance expenses at amortized cost | — | (27,087 | ) | — | (27,087 | ) | ||||||||||
Change in fair value | (2,602 | ) | — | — | (2,602 | ) | ||||||||||
Reclassification of equity to profit or loss | — | — | (50 | ) | (50 | ) | ||||||||||
Net losses in profit and loss | (2,602 | ) | (27,087 | ) | (50 | ) | (29,739 | ) | ||||||||
Change in fair value | — | — | 1,998 | 1,998 | ||||||||||||
Net gains in equity | — | — | 1,998 | 1,998 | ||||||||||||
Total | (2,602 | ) | (27,087 | ) | (1,948 | ) | (27,741 | ) | ||||||||
a) | Derivative financial instruments at fair value through profit or loss |
Negative Value | ||||||||||||
Financial swap | Par | at 31/12/08 | Maturity | |||||||||
Thousands of Euros | ||||||||||||
Interest rate swap | 50,000 | (796 | ) | 26/07/11 | ||||||||
50,000 | (796 | ) | ||||||||||
(note 20 | (b)) |
Negative Value | ||||||||||||
Derivatives | Par | at 31/12/09 | Maturity | |||||||||
Thousands of Euros | ||||||||||||
Interest rate swap | 50,000 | (3,333 | ) | 26/07/2013 | ||||||||
50,000 | (3,333 | ) | ||||||||||
(note 20 | ) | |||||||||||
Unquoted future | 23,221,400 | 1,189 | 30/12/2010 | |||||||||
Unquoted future | 26,370,080 | 481 | 30/12/2010 | |||||||||
49,591,480 | 1,670 | |||||||||||
(note 14 | ) |
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b) | Bond issue hedging derivative financial instruments |
c) | Exposure to credit risk |
Carrying Amount | Note | 31/12/09 | 31/12/08 | |||||||||
Thousands of Euros | ||||||||||||
Non-current financial assets | 11 | 3,731 | 1,636 | |||||||||
Other current financial assets | 14 | 6,547 | 6,680 | |||||||||
Financial derivatives | 14 | 1,670 | — | |||||||||
Trade receivables | 13 | 207,840 | 186,324 | |||||||||
Other receivables | 13 | 31,364 | 21,009 | |||||||||
Cash and cash equivalents | 249,375 | 6,368 | ||||||||||
500,527 | 222,017 | |||||||||||
Carrying Amount | 31/12/09 | 31/12/08 | ||||||
Thousands of Euros | ||||||||
Domestic | 70,521 | 72,203 | ||||||
EU countries | 47,755 | 49,144 | ||||||
United States of America | 29,130 | 31,016 | ||||||
United Kingdom | 3,054 | 2,615 | ||||||
Other European countries | 5,454 | 2,348 | ||||||
Other regions | 51,926 | 28,998 | ||||||
207,840 | 186,324 | |||||||
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(d) | Impairment losses |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Not matured | 120,339 | 118,449 | ||||||
Less than 1 month | 38,278 | 23,047 | ||||||
1 to 4 months | 25,597 | 22,824 | ||||||
4 months to 1 year | 17,357 | 17,539 | ||||||
More than a year | 6,269 | 4,465 | ||||||
207,840 | 186,324 | |||||||
31/12/09 | 31/12/08 | 31/12/07 | ||||||||||
Thousands of Euros | ||||||||||||
Opening balance | 3,172 | 3,285 | 3,448 | |||||||||
Net provisions for the year | 712 | 317 | (113 | ) | ||||||||
Net cancellations for the year | (42 | ) | (249 | ) | (48 | ) | ||||||
Translation differences | 196 | (181 | ) | (2 | ) | |||||||
Closing balance | 4,038 | 3,172 | 3,285 | |||||||||
Carrying | More | |||||||||||||||||||||||||||||||
Amount at | Contractual | 6 Months | 6 – 12 | 1 – 2 | 2 – 5 | than 5 | ||||||||||||||||||||||||||
Carrying Amount | Note | 31/12/07 | Flows | or Less | Months | Years | Years | Years | ||||||||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||||||||||||||
Bank loans | 20 | 340,891 | 378,504 | 8,948 | 176,901 | 46,600 | 131,454 | 14,601 | ||||||||||||||||||||||||
Other financial liabilities | 20 | 20,619 | 23,021 | 9,912 | 1,307 | 2,404 | 6,046 | 3,352 | ||||||||||||||||||||||||
Bonds and other securities | 20 | 5,521 | 5,659 | 5,659 | — | — | — | — | ||||||||||||||||||||||||
Finance lease liabilities | 20 | 9,553 | 10,879 | 571 | 4,163 | 3,477 | 2,633 | 35 | ||||||||||||||||||||||||
Suppliers | 21 | 90,790 | 90,790 | 89,070 | 1,694 | 26 | — | — | ||||||||||||||||||||||||
Other current liabilities | 22 | 409 | 409 | 91 | 32 | — | 286 | — | ||||||||||||||||||||||||
Interest rate swap | 20 | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | 467,783 | 509,262 | 114,251 | 184,097 | 52,507 | 140,419 | 17,988 | |||||||||||||||||||||||||
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Carrying | More | |||||||||||||||||||||||||||||||
Amount at | Contractual | 6 Months | 6 – 12 | 1 – 2 | 2 – 5 | than 5 | ||||||||||||||||||||||||||
Carrying Amount | Note | 31/12/08 | Flows | or Less | Months | Years | Years | Years | ||||||||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||||||||||||||
Bank loans | 20 | 441,416 | 490,446 | 7,945 | 144,973 | 51,615 | 237,001 | 48,912 | ||||||||||||||||||||||||
Other financial liabilities | 20 | 21,431 | 23,830 | 6,781 | 2,909 | 3,392 | 6,925 | 3,823 | ||||||||||||||||||||||||
Bonds and other securities | 20 | 5,580 | 5,702 | 5,702 | — | — | — | — | ||||||||||||||||||||||||
Finance lease liabilities | 20 | 12,064 | 13,452 | 532 | 5,071 | 4,140 | 3,301 | 408 | ||||||||||||||||||||||||
Suppliers | 21 | 107,613 | 107,613 | 105,531 | 2,082 | — | — | — | ||||||||||||||||||||||||
Other current liabilities | 22 | 1,446 | 1,446 | 328 | 1,118 | — | — | — | ||||||||||||||||||||||||
Derivative financial liabilities | ||||||||||||||||||||||||||||||||
Interest rate swap | 20 | 796 | 796 | 796 | — | — | — | — | ||||||||||||||||||||||||
Total | 590,346 | 643,285 | 127,615 | 156,153 | 59,147 | 247,227 | 53,462 | |||||||||||||||||||||||||
Carrying | More | |||||||||||||||||||||||||||||||
Amount at | Contractual | 6 Months | 6 – 12 | 1 – 2 | 2 – 5 | than 5 | ||||||||||||||||||||||||||
Carrying Amount | Note | 31/12/09 | Flows | or Less | Months | Years | Years | Years | ||||||||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||||||||||
Non-derivative financial liabilities | ||||||||||||||||||||||||||||||||
Bank loans | 20 | 382,566 | 412,390 | 88,707 | 15,691 | 88,180 | 175,041 | 44,771 | ||||||||||||||||||||||||
Other financial liabilities | 20 | 21,449 | 27,420 | 6,927 | 2,582 | 4,417 | 10,076 | 3,418 | ||||||||||||||||||||||||
Bonds and other securities | 20 | 423,675 | 687,798 | 27,440 | 14,317 | 57,269 | 134,317 | 454,455 | ||||||||||||||||||||||||
Finance lease liabilities | 20 | 10,936 | 11,334 | 230 | 4,751 | 3,315 | 2,565 | 473 | ||||||||||||||||||||||||
Suppliers | 21 | 120,909 | 120,909 | 120,550 | 359 | — | — | — | ||||||||||||||||||||||||
Other current liabilities | 22 | 1,754 | 1,753 | 1,753 | — | — | — | — | ||||||||||||||||||||||||
Derivative financial liabilities | ||||||||||||||||||||||||||||||||
Interest rate swap | 20 | 3,333 | 3,333 | — | — | — | 3,333 | — | ||||||||||||||||||||||||
Unquoted futures | 14 | (1,670 | ) | (1,670 | ) | — | (1,670 | ) | — | — | — | |||||||||||||||||||||
Total | 962,952 | 1,263,267 | 245,607 | 36,030 | 153,181 | 325,332 | 503,117 | |||||||||||||||||||||||||
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31/12/07 | ||||||||||||||||||||
Carrying | ||||||||||||||||||||
Amount at | Thousands | Thousands | ||||||||||||||||||
Carrying Amount | Note | 31/12/07 | of Euros | of USD | Other | |||||||||||||||
Trade receivables | 13 | 174,351 | 126,629 | 22,071 | 25,651 | |||||||||||||||
Cash and cash equivalents | 5,690 | 4,150 | (1,562 | ) | 3.102 | |||||||||||||||
Bank loans | 20 | (340,891 | ) | (287,542 | ) | (48,631 | ) | (4,718 | ) | |||||||||||
Bonds and other marketable securities | 20 | (5,521 | ) | (5,521 | ) | — | — | |||||||||||||
Trade and other payables | 21 | (90,790 | ) | (68,003 | ) | (19,423 | ) | (3,364 | ) | |||||||||||
Gross balance sheet exposure | (257,161 | ) | (230,287 | ) | (47,545 | ) | 20,671 | |||||||||||||
31/12/08 | ||||||||||||||||||||
Carrying | ||||||||||||||||||||
Amount at | Thousands | Thousands | ||||||||||||||||||
Note | 31/12/08 | of Euros | of USD | Other | ||||||||||||||||
Trade receivables | 13 | 186,324 | 124,516 | 38,171 | 23,637 | |||||||||||||||
Cash and cash equivalents | 6,368 | 2,347 | 2,639 | 1,382 | ||||||||||||||||
Bank loans | 20 | (441,416 | ) | (345,719 | ) | (84,527 | ) | (11,170 | ) | |||||||||||
Bonds and other marketable securities | 20 | (5,580 | ) | (5,580 | ) | — | — | |||||||||||||
Trade and other payables | 21 | (107,613 | ) | (74,509 | ) | (30,010 | ) | (3,094 | ) | |||||||||||
Gross balance sheet exposure | (361,917 | ) | (298,945 | ) | (73,727 | ) | 10,755 | |||||||||||||
31/12/09 | ||||||||||||||||||||
Carrying | ||||||||||||||||||||
Amount at | Thousands | Thousands | ||||||||||||||||||
Carrying Amount | Note | 31/12/09 | of Euros | of USD | Other | |||||||||||||||
Trade receivables | 13 | 207,840 | 123,681 | 45,297 | 38.862 | |||||||||||||||
Cash and cash equivalent | 249,372 | 2,153 | 208,800 | 38,419 | ||||||||||||||||
Bank loans | 20 | (382,566 | ) | (361,107 | ) | (3,010 | ) | (18.449 | ) | |||||||||||
Bonds and other marketable securities | 20 | (423,675 | ) | (16,407 | ) | (379,118 | ) | (28.150 | ) | |||||||||||
Trade and other payables | 21 | (120,909 | ) | (85,269 | ) | (31,377 | ) | (4.263 | ) | |||||||||||
Gross balance sheet exposure | (469,938 | ) | (336,949 | ) | (159,408 | ) | (26,419 | ) | ||||||||||||
Average Interest Rate | Closing Interest Rate | |||||||||||||||||||||||
Euro | 2009 | 2008 | 2007 | 31/12/2009 | 31/12/08 | 31/12/07 | ||||||||||||||||||
USD | 1.38 | 1.49 | 1.37 | 1.44 | 1.39 | 1.47 |
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2009 | 2008 | 2007 | ||||||||||
Thousands of Euros | ||||||||||||
Fixed-interest financial instruments | ||||||||||||
Financial assets | 9,674 | 8,293 | 7,979 | |||||||||
Financial liabilities | (423,675 | ) | (5,580 | ) | (5,521 | ) | ||||||
(414,001 | ) | 2,713 | 2,458 | |||||||||
Variable-interest financial instruments | ||||||||||||
Financial liabilities | (393,502 | ) | (453,480 | ) | (350,444 | ) | ||||||
(393,502 | ) | (453,480 | ) | (350,444 | ) | |||||||
(807,503 | ) | (450,767 | ) | (347,986 | ) | |||||||
(31) | Balances and Transactions with Related Parties |
a) | Balances with related parties |
31/12/09 | 31/12/08 | |||||||
Thousands of Euros | ||||||||
Receivables from associates | 812 | — | ||||||
Payables to associates | (22 | ) | (52 | ) | ||||
Payables to key management personnel | — | — | ||||||
Payables to members of the board of directors | (121 | ) | (90 | ) | ||||
Payables to other related parties | (3,322 | ) | (2,226 | ) | ||||
(2,653 | ) | (2,368 | ) | |||||
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b) | Transactions with related parties |
Key | ||||||||||||||||
Management | Other Related | Board of Directors | ||||||||||||||
Associates | Personnel | Parties | of the Company | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net purchases | 105 | �� | — | — | — | |||||||||||
Net sales | — | — | — | — | ||||||||||||
Other service expenses | — | — | 2,337 | 120 | ||||||||||||
Personnel expenses | — | 4,652 | — | 1,847 | ||||||||||||
105 | 4,652 | 2,337 | 1,967 | |||||||||||||
Interest | — | — | — | — | ||||||||||||
Dividends and other allocated benefits | — | — | — | 948 | ||||||||||||
Dividends and other profits received | — | — | — | — | ||||||||||||
— | — | — | 948 | |||||||||||||
Key | ||||||||||||||||
Management | Other Related | Board of Directors | ||||||||||||||
Associates | Personnel | Parties | of the Company | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net purchases | 125 | — | — | — | ||||||||||||
Other service expenses | — | — | 4,981 | 180 | ||||||||||||
Personnel expenses | — | 4.253 | — | 1,995 | ||||||||||||
125 | 4,253 | 4,981 | 2,175 | |||||||||||||
Interest | — | — | — | — | ||||||||||||
Dividends and other allocated benefits | — | — | — | 2,600 | ||||||||||||
Dividends and other profits received | — | — | — | — | ||||||||||||
— | — | — | 2,600 | |||||||||||||
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Key | ||||||||||||||||
Management | Other Related | Board of Directors | ||||||||||||||
Associates | Personnel | Parties | of the Company | |||||||||||||
Thousands of Euros | ||||||||||||||||
Net purchases | 86 | — | — | — | ||||||||||||
Net sales | (700 | ) | — | — | — | |||||||||||
Other service expenses | — | — | 7.257 | 240 | ||||||||||||
Personnel expenses | — | 5,849 | — | 2,148 | ||||||||||||
(614 | ) | 5,849 | 7.257 | 2,388 | ||||||||||||
Interest | — | — | — | — | ||||||||||||
Dividends and other allocated benefits | — | — | — | 6,152 | ||||||||||||
Dividends and other profits received | — | — | — | — | ||||||||||||
— | — | — | 6,152 | |||||||||||||
(32) | Subsequent Events |
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Bioscience | Hospital | Diagnostics | Raw Materials | Others/Unallocated | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income | 694,969 | 617,918 | 507,600 | 86,328 | 82,566 | 74,683 | 103,091 | 85,705 | 79,709 | 22,665 | 22,794 | 36,151 | 6,133 | 5,328 | 5,148 | 913,186 | 814,311 | 703,291 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total operating income | 694,969 | 617,918 | 507,600 | 86,328 | 82,566 | 74,683 | 103,091 | 85,705 | 79,709 | 22,665 | 22,794 | 36,151 | 6,133 | 5,328 | 5,148 | 913,186 | 814,311 | 703,291 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit/(Loss) for the segment | 297,584 | 262,229 | 176,874 | 8,374 | 8,534 | 10,730 | 12,136 | 13,603 | 17,006 | 3,850 | 7,369 | 6,035 | 6,133 | 5,328 | 5,148 | 328,077 | 297,063 | 215,793 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated expense | (101,549 | ) | (94,102 | ) | (69,439 | ) | (101,549 | ) | (94,102 | ) | (69,439 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating profit | 226,528 | 202,961 | 146,354 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance income/expenses | (22,585 | ) | (30,716 | ) | (22,786 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share of profit/(loss) of equity accounted investees | 0 | 0 | 0 | 0 | 0 | 0 | 51 | 24 | 19 | 0 | 0 | 0 | 0 | 0 | 0 | 51 | 24 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense | (56,424 | ) | (50,153 | ) | (35,239 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Profit for the year after tax | 147,570 | 122,116 | 88,348 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment assets | 994,245 | 798,843 | 620,301 | 68,214 | 63,660 | 48,766 | 82,202 | 67,087 | 54,721 | 1,312 | 4,379 | 5,296 | — | — | 1,145,973 | 933,969 | 729,084 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity accounted investments | — | — | — | — | — | 383 | 374 | 243 | — | — | — | — | 383 | 374 | 243 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated assets | 510,821 | 245,896 | 210,242 | 510,821 | 245,896 | 210,242 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | 1,657,177 | 1,180,239 | 939,569 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment liabilities | 79,988 | 75,120 | 68,165 | 12,579 | 11,909 | 2,306 | 10,763 | 9,066 | 7,255 | 0 | 0 | 0 | — | — | 103,330 | 96,095 | 77,726 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unallocated liabilities | 975,319 | 602,865 | 477,677 | 975,319 | 602,865 | 477,677 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities | 1,078,649 | 698,960 | 555,403 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other information: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortisation and depreciation | 21,893 | 21,644 | 20,588 | 3,808 | 3,725 | 3,491 | 5,261 | 5,000 | 4,762 | 0 | 67 | 31 | 8,592 | 2,820 | 2,656 | 39,554 | 33,256 | 31,528 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses that do not require cash payments | (2,059 | ) | (1,744 | ) | (1,500 | ) | (70 | ) | 32 | (4 | ) | (1 | ) | 15 | 59 | 0 | (7 | ) | (81 | ) | (26 | ) | (275 | ) | 272 | (2,156 | ) | (1,979 | ) | (1,254 | ) | |||||||||||||||||||||||||||||||||||||||||
Additions for the year of property, plant & equipment and intangible assets | 70,702 | 65,954 | 35,098 | 7,524 | 9,266 | 3,452 | 14,067 | 14,078 | 4,954 | 0 | 516 | 0 | 26,477 | 39,879 | 11,991 | 118,770 | 129,693 | 55,495 |
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European Union | United States | Rest of the World | Consolidated | |||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | 424,591 | 404,099 | 376,905 | 296,659 | 290,666 | 235,929 | 191,936 | 119,546 | 90,457 | 913,186 | 814,311 | 703,291 | ||||||||||||||||||||||||||||||||||||
Assets by geographic areas | 714,782 | 629,237 | 531,238 | 821,641 | 502,797 | 373,225 | 120,754 | 48,205 | 35,106 | 1,657,177 | 1,180,239 | 939,569 | ||||||||||||||||||||||||||||||||||||
Other information: | ||||||||||||||||||||||||||||||||||||||||||||||||
Additions for the year of property, plant & equipment and intangible assets | 67,387 | 94,004 | 30,882 | 43,726 | 33,475 | 23,183 | 7,657 | 2,214 | 1,430 | 118,770 | 129,693 | 55,495 |
F-101
Table of Contents
for the year ended
31 December 2009
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/2008 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/2009 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Goodwill | 158,567 | 0 | 16,415 | 0 | 0 | (982 | ) | 174,000 | ||||||||||||||||||||
(note 3.2 and 3.3 | ) | |||||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||||||
Development costs | 47,299 | 8,146 | 0 | 0 | 0 | (31 | ) | 55,414 | ||||||||||||||||||||
Concessions, patents, licenses brands and similar | 40,461 | 1 | 6,525 | (5 | ) | 0 | (723 | ) | 46,259 | |||||||||||||||||||
Software | 22,272 | 6,700 | 0 | 1 | (240 | ) | (136 | ) | 28,597 | |||||||||||||||||||
Other intangible assets | 0 | 508 | 0 | 5 | 0 | 0 | 513 | |||||||||||||||||||||
Total cost of intangible assets | 110,032 | 15,355 | 6,525 | 1 | (240 | ) | (890 | ) | 130,783 | |||||||||||||||||||
Accum. amort. of development costs | (23,878 | ) | (5,580 | ) | 0 | 0 | 0 | 31 | (29,427 | ) | ||||||||||||||||||
Accum. amort of concessions, patents, licenses, brands & similar | (14,881 | ) | (806 | ) | 0 | 0 | 0 | 161 | (15,526 | ) | ||||||||||||||||||
Accum. amort. of software | (13,517 | ) | (3,097 | ) | 0 | 0 | 132 | 52 | (16,430 | ) | ||||||||||||||||||
Total accum. amort intangible assets | (52,276 | ) | (9,483 | ) | 0 | 0 | 132 | 244 | (61,383 | ) | ||||||||||||||||||
Impairment of other intangible assets | 0 | (15 | ) | 0 | 0 | 0 | 0 | (15 | ) | |||||||||||||||||||
Carrying amount of intangible assets | 57,756 | 5,857 | 6,525 | 1 | (108 | ) | (646 | ) | 69,385 | |||||||||||||||||||
(note 3.3 | ) |
F-102
Table of Contents
for the year ended
31 December 2008
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/2007 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/2008 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Goodwill | 150,243 | 0 | 2,372 | 0 | 0 | 5,952 | 158,567 | |||||||||||||||||||||
(note 3.2 | ) | |||||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||||||
Development costs | 43,141 | 5,255 | 0 | 0 | (1,146 | ) | 49 | 47,299 | ||||||||||||||||||||
Concessions, patents, licenses brands and similar | 40,790 | 0 | 0 | 0 | (1,618 | ) | 1,289 | 40,461 | ||||||||||||||||||||
Software | 17,704 | 4,489 | 0 | (59 | ) | (8 | ) | 146 | 22,272 | |||||||||||||||||||
Total cost of intangible assets | 101,635 | 9,744 | 0 | (59 | ) | (2,772 | ) | 1,484 | 110,032 | |||||||||||||||||||
Accum. amort. of development costs | (18,916 | ) | (4,634 | ) | 0 | (287 | ) | 0 | (41 | ) | (23,878 | ) | ||||||||||||||||
Accum. amort of concessions, patents, licenses, brands & similar | (14,110 | ) | (2,322 | ) | 0 | 287 | 1,616 | (352 | ) | (14,881 | ) | |||||||||||||||||
Accum. amort. of software | (11,386 | ) | (2,124 | ) | 0 | 59 | 10 | (76 | ) | (13,517 | ) | |||||||||||||||||
Total Accum. amort intangible assets | (44,412 | ) | (9,080 | ) | 0 | 59 | 1,626 | (469 | ) | (52,276 | ) | |||||||||||||||||
Carrying amount of intangible assets | 57,223 | 664 | 0 | 0 | (1,146 | ) | 1,015 | 57,756 | ||||||||||||||||||||
F-103
Table of Contents
for the year ended
31 December 2007
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/2006 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/2007 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Goodwill | 150,820 | 0 | 16,106 | 0 | 0 | (16,683 | ) | 150,243 | ||||||||||||||||||||
(note 3.1 | ) | |||||||||||||||||||||||||||
Intangible assets | ||||||||||||||||||||||||||||
Development costs | 37,710 | 5,532 | 0 | 0 | 0 | (101 | ) | 43,141 | ||||||||||||||||||||
Concessions, patents, licenses brands and similar | 43,960 | 0 | 0 | 0 | (519 | ) | (2,651 | ) | 40,790 | |||||||||||||||||||
Software | 15,409 | 2,778 | 0 | 5 | (298 | ) | (190 | ) | 17,704 | |||||||||||||||||||
Total cost of intangible assets | 97,079 | 8,310 | 0 | 5 | (817 | ) | (2,942 | ) | 101,635 | |||||||||||||||||||
Accum. amort. of development costs | (14,306 | ) | (4,610 | ) | 0 | 0 | 0 | 0 | (18,916 | ) | ||||||||||||||||||
Accum. amort of concessions, patents, licenses, brands & similar | (12,008 | ) | (3,156 | ) | 0 | 0 | 412 | 642 | (14,110 | ) | ||||||||||||||||||
Accum. amort. of software | (9,915 | ) | (1,875 | ) | 0 | (5 | ) | 239 | 170 | (11,386 | ) | |||||||||||||||||
Total Accum. amort intangible assets | (36,229 | ) | (9,641 | ) | 0 | (5 | ) | 651 | 812 | (44,412 | ) | |||||||||||||||||
Carrying amount of intangible assets | 60,850 | (1,331 | ) | 0 | 0 | (166 | ) | (2,130 | ) | 57,223 | ||||||||||||||||||
F-104
Table of Contents
for the year ended
31 December 2009
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/08 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/09 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Cost: | ||||||||||||||||||||||||||||
Land and buildings | 111,067 | 9,729 | 0 | 22,905 | 0 | (1,101 | ) | 142,600 | ||||||||||||||||||||
Plant and machinery | 287,761 | 33,994 | 2,307 | 27,784 | (5,881 | ) | (1,935 | ) | 344,030 | |||||||||||||||||||
Under construction | 63,620 | 59,692 | 0 | (50,882 | ) | (757 | ) | (892 | ) | 70,781 | ||||||||||||||||||
462,448 | 103,415 | 2,307 | (193 | ) | (6,638 | ) | (3,928 | ) | 557,411 | |||||||||||||||||||
Accumulated depreciation: | ||||||||||||||||||||||||||||
Buildings | (8,049 | ) | (1,514 | ) | 0 | 0 | 0 | 61 | (9,502 | ) | ||||||||||||||||||
Plant and machinery | (153,390 | ) | (28,557 | ) | 0 | 192 | 4,942 | 609 | (176,204 | ) | ||||||||||||||||||
(161,439 | ) | (30,071 | ) | 0 | 192 | 4,942 | 670 | (185,706 | ) | |||||||||||||||||||
Carrying amount | 301,009 | 73,344 | 2,307 | (1 | ) | (1,696 | ) | (3,258 | ) | 371,705 | ||||||||||||||||||
(note 3.3 | ) |
F-105
Table of Contents
for the year ended
31 December 2008
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/07 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/08 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Cost: | ||||||||||||||||||||||||||||
Land and buildings | 79,845 | 29,142 | 0 | 641 | 0 | 1,439 | 111,067 | |||||||||||||||||||||
Plant and machinery | 233,812 | 35,408 | 3 | 22,423 | (5,939 | ) | 2,054 | 287,761 | ||||||||||||||||||||
Under construction | 30,079 | 55,399 | 0 | (23,948 | ) | (128 | ) | 2,218 | 63,620 | |||||||||||||||||||
343,736 | 119,949 | 3 | (884 | ) | (6,067 | ) | 5,711 | 462,448 | ||||||||||||||||||||
Accumulated depreciation: | ||||||||||||||||||||||||||||
Buildings | (6,735 | ) | (1,234 | ) | 0 | (39 | ) | 29 | (70 | ) | (8,049 | ) | ||||||||||||||||
Plant and machinery | (135,669 | ) | (22,942 | ) | 0 | 923 | 5,027 | (729 | ) | (153,390 | ) | |||||||||||||||||
(142,404 | ) | (24,176 | ) | 0 | 884 | 5,056 | (799 | ) | (161,439 | ) | ||||||||||||||||||
Carrying amount | 201,332 | 95,773 | 3 | 0 | (1,011 | ) | 4,912 | 301,009 | ||||||||||||||||||||
(note 3.2 | ) |
F-106
Table of Contents
for the year ended
31 December 2007
Balances at | Business | Translation | Balances at | |||||||||||||||||||||||||
31/12/06 | Additions | Combinations | Transfers | Disposals | Differences | 31/12/07 | ||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||||
Cost: | ||||||||||||||||||||||||||||
Land and buildings | 80,669 | 2,482 | 0 | (777 | ) | 0 | (2,529 | ) | 79,845 | |||||||||||||||||||
Plant and machinery | 224,088 | 18,570 | 971 | 3,995 | (5,661 | ) | (8,151 | ) | 233,812 | |||||||||||||||||||
Under construction | 8,352 | 26,133 | 0 | (3,223 | ) | (127 | ) | (1,056 | ) | 30,079 | ||||||||||||||||||
313,109 | 47,185 | 971 | (5 | ) | (5,788 | ) | (11,736 | ) | 343,736 | |||||||||||||||||||
Accumulated depreciation: | ||||||||||||||||||||||||||||
Buildings | (6,336 | ) | (713 | ) | 0 | 205 | 0 | 109 | (6,735 | ) | ||||||||||||||||||
Plant and machinery | (121,780 | ) | (21,174 | ) | 0 | (200 | ) | 3,988 | 3,497 | (135,669 | ) | |||||||||||||||||
(128,116 | ) | (21,887 | ) | 0 | 5 | 3,988 | 3,606 | (142,404 | ) | |||||||||||||||||||
Carrying amount | 184,993 | 25,298 | 971 | 0 | (1,800 | ) | (8,130 | ) | 201,332 | |||||||||||||||||||
(note 3.1 | ) |
F-107
Table of Contents
for the year ended
31 December 2009
Loan | ||||||||||||||||||||||||||
Concession | Maturity | Amount | Arrangement | Carrying | ||||||||||||||||||||||
Loan | Currency | Interest Rate | Date | Date | Awarded | Costs | Amount | |||||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||||
Syndicated loan — Club deal | EUR | Euribor + 0,8% | 01/05/2008 | 26/05/2013 | 350,000 | (2,427 | ) | 195,471 | ||||||||||||||||||
Instituto de crédito Oficial | EUR | 4.94% | 01/06/2006 | 26/05/2016 | 30,000 | (210 | ) | 21,933 | ||||||||||||||||||
Caixa Catalunya — Mortgage loan | EUR | 5.25% | 01/02/2008 | 01/02/2018 | 14,000 | (294 | ) | 11,733 | ||||||||||||||||||
Banco Santander | EUR | ICO + 1,8% | 01/06/2009 | 01/06/2016 | 6,000 | — | 6,000 | |||||||||||||||||||
Caja de Madrid | EUR | Euribor + 1% | 05/06/2009 | 05/06/2016 | 6,000 | — | 6,000 | |||||||||||||||||||
Ibercaja | EUR | Euribor + 1,99% | 30/07/2009 | 31/07/2016 | 1,800 | — | 1,800 | |||||||||||||||||||
BBVA — Mortgage loan | EUR | 6.50% | 21/10/2008 | 31/12/2024 | 45,000 | (676 | ) | 33,649 | ||||||||||||||||||
Caixa Catalunya | EUR | 4.05% | 30/07/2009 | 25/08/2016 | 1,440 | — | 1,440 | |||||||||||||||||||
Banca Toscana | EUR | 5.33% | 08/05/2008 | 30/06/2013 | 3,000 | — | 1,552 | |||||||||||||||||||
Cofides | EUR | 5.61% | 01/08/2008 | 20/08/2017 | 6,854 | — | 6,854 | |||||||||||||||||||
464,094 | (3,607 | ) | 286,432 | |||||||||||||||||||||||
Non-current finance lease creditors (see note 20) | 6,202 | |||||||||||||||||||||||||
464,094 | (3,607 | ) | 292,634 | |||||||||||||||||||||||
F-108
Table of Contents
for the year ended
31 December 2008
Loan | ||||||||||||||||||||||||
Maturity | Amount | Arrangement | Carrying | |||||||||||||||||||||
Loan | Currency | Interest Rate | Concession Date | Date | Awarded | Costs | Amount | |||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||
Syndicated loan — Club deal | EUR / USD | Euribor + 0,8% | 01/05/2008 | 26/05/2013 | 350,000 | (1,984 | ) | 225,320 | ||||||||||||||||
Institut Catalá de Finances | EUR | 5.70% | 27/01/2005 | 28/02/2010 | 6,247 | (62 | ) | 312 | ||||||||||||||||
Instituto de Crédito Oficial | EUR | 4.94% | 01/06/2006 | 26/05/2016 | 30,000 | (210 | ) | 25,907 | ||||||||||||||||
Caixa Catalunya — Mortgage loan | EUR | 5.25% | 01/02/2008 | 01/02/2018 | 14,000 | (294 | ) | 13,350 | ||||||||||||||||
BBVA — Mortgage loan | EUR | 6.50% | 21/10/2008 | 31/12/2024 | 45,000 | (676 | ) | 30,463 | ||||||||||||||||
Banca Toscana | EUR | 5.33% | 08/05/2008 | 30/06/2013 | 3,000 | — | 2,183 | |||||||||||||||||
Cofides | EUR | 5.61% | 01/08/2008 | 20/08/2017 | 6,854 | — | 6,854 | |||||||||||||||||
448,247 | (3,226 | ) | 304,389 | |||||||||||||||||||||
Non-current finance lease creditors (see note 20) | 7,124 | |||||||||||||||||||||||
448,247 | (3,226 | ) | 311,513 | |||||||||||||||||||||
F-109
Table of Contents
for the year ended
31 December 2007
Loan | ||||||||||||||||||||||||
Concession | Maturity | Amount | Arrangement | Carrying | ||||||||||||||||||||
Loan | Currency | Interest Rate | Date | Date | Awarded | Costs | Amount | |||||||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
(Expressed in thousands of Euros) | ||||||||||||||||||||||||
Syndicated loan | EUR | Euribor + 0,7% | 01/07/2005 | 21/06/2011 | 225,000 | (2,925 | ) | 138,211 | ||||||||||||||||
Bancaja | EUR | 5.50% | 01/05/2000 | 01/05/2012 | 902 | (9 | ) | 304 | ||||||||||||||||
Institut Català de Finances | EUR | 5.70% | 27/01/2005 | 28/02/2010 | 6,247 | (62 | ) | 1,548 | ||||||||||||||||
Instituto de Crédito Oficial | EUR | 4.94% | 01/06/2006 | 26/05/2016 | 30,000 | (210 | ) | 29,876 | ||||||||||||||||
BBVA | EUR | 5.37% | 27/02/2006 | 24/02/2009 | 15,000 | (60 | ) | 2,999 | ||||||||||||||||
277,149 | (3,266 | ) | 172,938 | |||||||||||||||||||||
Non-current finance lease creditors (see note 20) | 5,487 | |||||||||||||||||||||||
277,149 | (3,266 | ) | 178,425 | |||||||||||||||||||||
F-110
Table of Contents
Unaudited Interim Consolidated Financial Statements: | ||||
F-112 | ||||
F-113 | ||||
F-114 | ||||
F-115 | ||||
Audited Consolidated Financial Statements: | ||||
F-130 | ||||
F-131 | ||||
F-132 | ||||
F-133 | ||||
F-134 | ||||
F-135 | ||||
F-186 |
F-111
Table of Contents
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 89,502 | $ | 65,239 | ||||
Accounts receivable, net of allowances of $3,540 and $3,461, respectively | 169,030 | 136,978 | ||||||
Inventories | 653,384 | 644,054 | ||||||
Deferred income taxes | 88,652 | 88,652 | ||||||
Prepaid expenses and other | 36,652 | 31,466 | ||||||
Total current assets | 1,037,220 | 966,389 | ||||||
Property, plant, and equipment, net | 303,078 | 267,199 | ||||||
Investment in affiliate | 2,261 | 1,935 | ||||||
Intangible assets | 10,880 | 10,880 | ||||||
Goodwill | 172,860 | 172,860 | ||||||
Deferred income taxes | — | 5,848 | ||||||
Other | 17,891 | 19,894 | ||||||
Total assets | $ | 1,544,190 | $ | 1,445,005 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 70,276 | $ | 71,046 | ||||
Accrued expenses and other liabilities | 156,814 | 170,533 | ||||||
Current portion of capital lease obligations | 789 | 740 | ||||||
Total current liabilities | 227,879 | 242,319 | ||||||
Long-term debt and capital lease obligations | 605,149 | 605,267 | ||||||
Deferred income taxes | 5,693 | — | ||||||
Other | 14,929 | 15,265 | ||||||
Total liabilities | 853,650 | 862,851 | ||||||
Commitments and contingencies | ||||||||
Stockholders’ equity: | ||||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 123,051,387 and 122,173,274 shares issued and outstanding, respectively | 1,227 | 1,212 | ||||||
Additional paid-in capital | 783,980 | 767,032 | ||||||
Accumulated deficit | (93,484 | ) | (186,446 | ) | ||||
Accumulated other comprehensive (loss) income, net of tax | (1,183 | ) | 356 | |||||
Total stockholders’ equity | 690,540 | 582,154 | ||||||
Total liabilities and stockholders’ equity | $ | 1,544,190 | $ | 1,445,005 | ||||
F-112
Table of Contents
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Net revenue: | ||||||||
Product | $ | 771,717 | $ | 734,979 | ||||
Other | 12,070 | 12,386 | ||||||
Total | 783,787 | 747,365 | ||||||
Cost of goods sold | 440,568 | 433,209 | ||||||
Gross profit | 343,219 | 314,156 | ||||||
Operating expenses: | ||||||||
Selling, general, and administrative | 143,624 | 134,425 | ||||||
Research and development | 32,159 | 35,561 | ||||||
Total | 175,783 | 169,986 | ||||||
Income from operations | 167,436 | 144,170 | ||||||
Other non-operating (expense) income: | ||||||||
Interest expense, net | (23,386 | ) | (41,858 | ) | ||||
Merger termination fee | — | 75,000 | ||||||
Equity in earnings of affiliate | 326 | 184 | ||||||
Total | (23,060 | ) | 33,326 | |||||
Income before income taxes | 144,376 | 177,496 | ||||||
Provision for income taxes | (51,414 | ) | (60,789 | ) | ||||
Net income | 92,962 | 116,707 | ||||||
Less dividends to preferred stockholders | — | (7,732 | ) | |||||
Net income available to common stockholders | $ | 92,962 | $ | 108,975 | ||||
Net income per common share: | ||||||||
Basic | $ | 0.76 | $ | 76.29 | ||||
Diluted | $ | 0.73 | $ | 1.24 | ||||
F-113
Table of Contents
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 92,962 | $ | 116,707 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 16,851 | 13,921 | ||||||
Amortization of deferred loan fees and debt discount | 2,108 | 1,882 | ||||||
Share-based compensation expense | 10,584 | 20,171 | ||||||
Change in allowance for doubtful receivables and advances | 981 | 1,976 | ||||||
Recognition of previously deferred revenue | (109 | ) | (113 | ) | ||||
Amortization of deferred compensation | 1,709 | 3,062 | ||||||
Equity in earnings of affiliate | (326 | ) | (184 | ) | ||||
Asset impairment | 231 | 369 | ||||||
Loss on disposal of property, plant, and equipment | 92 | 869 | ||||||
Decrease in deferred tax assets | 11,541 | 4,216 | ||||||
Excess tax benefits from share-based payment arrangements | (5,708 | ) | (1,437 | ) | ||||
Changes in assets and liabilities, excluding the effects of business acquisitions: | ||||||||
Accounts receivable | (33,053 | ) | (7,539 | ) | ||||
Inventories | (10,047 | ) | (21,965 | ) | ||||
Prepaid expenses and other assets | (6,409 | ) | 14,260 | |||||
Accounts payable | (770 | ) | (4,203 | ) | ||||
Accrued expenses and other liabilities | (5,136 | ) | (9,799 | ) | ||||
Interest payable | (3,102 | ) | (1,287 | ) | ||||
Net cash provided by operating activities | 72,399 | 130,906 | ||||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant, and equipment | (53,205 | ) | (23,672 | ) | ||||
Business acquisitions, net of cash acquired | — | (18,234 | ) | |||||
Financing arrangements with third party suppliers, net of repayments | 361 | (1,575 | ) | |||||
Other | — | 232 | ||||||
Net cash used in investing activities | (52,844 | ) | (43,249 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under Revolving Credit Facility | 430 | 734,598 | ||||||
Repayments of borrowings under Revolving Credit Facility | (430 | ) | (821,301 | ) | ||||
Repayments of borrowings under term loan | — | (3,500 | ) | |||||
Financing transaction costs | (417 | ) | — | |||||
Repayments of capital lease obligations | (356 | ) | (257 | ) | ||||
Proceeds from exercises of stock options | 6,057 | — | ||||||
Repurchases of common stock from employees | (4,917 | ) | (3,902 | ) | ||||
Excess tax benefits from share-based payment arrangements | 5,708 | 1,437 | ||||||
Net cash provided by (used in) financing activities | 6,075 | (92,925 | ) | |||||
Effect of exchange rate changes on cash and cash equivalents | (1,367 | ) | 118 | |||||
Net increase (decrease) in cash and cash equivalents | 24,263 | (5,150 | ) | |||||
Cash and cash equivalents at beginning of period | 65,239 | 16,979 | ||||||
Cash and cash equivalents at end of period | $ | 89,502 | $ | 11,829 | ||||
F-114
Table of Contents
1. | Description of Business |
F-115
Table of Contents
2. | Summary of Significant Accounting Policies |
3. | Definitive Merger Agreement with Grifols S.A. and Grifols, Inc. (Grifols) |
F-116
Table of Contents
4. | Definitive Merger Agreement with CSL Limited (CSL) |
5. | Inventories and Cost of Goods Sold |
June 30, | December 31, | |||||||
2010 | 2009 | |||||||
Raw material | $ | 173,948 | $ | 171,866 | ||||
Work-in-process | 337,825 | 312,178 | ||||||
Finished goods | 141,611 | 160,010 | ||||||
Total inventories | $ | 653,384 | $ | 644,054 | ||||
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6. | Comprehensive Income |
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Net income | $ | 92,962 | $ | 116,707 | ||||
Foreign currency translation adjustments | (1,539 | ) | 90 | |||||
Net unrealized gain on derivative financial instruments, net of tax | — | 5,088 | ||||||
Total comprehensive income | $ | 91,423 | $ | 121,885 | ||||
7. | Income Taxes |
8. | Related Party Transactions |
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Six Months Ended June 30, | ||||||||
2010 | 2009 | |||||||
Centric (product distribution and other services) | $ | 11,076 | $ | 9,948 | ||||
Cerberus (management fees) | $ | — | $ | 3,757 |
Payable | ||||||||||
Activity/ | June 30, | December 31, | ||||||||
Related Party | Transaction | 2010 | 2009 | |||||||
Centric | Product distribution and other services | $ | 6,169 | $ | 5,537 | |||||
Cerberus | Operational support | $ | 361 | $ | 349 |
9. | Commitments and Contingencies |
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10. | Share-Based Compensation |
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
SG&A | $ | 7,950 | $ | 16,450 | ||||
R&D | 715 | 1,179 | ||||||
Cost of goods sold | 1,919 | 2,542 | ||||||
Total expense | $ | 10,584 | $ | 20,171 | ||||
Capitalized in inventory | $ | 1,445 | $ | 2,006 |
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Weighted- | ||||||||
Unrecognized | Average | |||||||
Compensation | Period | |||||||
Cost | (Years) | |||||||
Stock options | $ | 4,819 | 2.60 | |||||
Restricted share awards | 3,244 | 0.75 | ||||||
RSU’s | 7,302 | 2.66 | ||||||
Performance share awards | 4,248 | 2.76 | ||||||
Total | $ | 19,613 | ||||||
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Weighted | Remaining | |||||||||||||||
Average | Contractual | Aggregate | ||||||||||||||
Exercise | Term | Intrinsic | ||||||||||||||
Shares | Price | (Years) | Value | |||||||||||||
Outstanding at December 31, 2009 | 12,129,438 | $ | 8.40 | |||||||||||||
Granted | 73,593 | $ | 20.39 | |||||||||||||
Forfeited | (13,581 | ) | $ | 19.00 | ||||||||||||
Exercised | (1,124,936 | ) | $ | 5.39 | ||||||||||||
Outstanding at June 30, 2010 | 11,064,514 | $ | 8.77 | 6.2 | $ | 136,373 | ||||||||||
Exercisable at June 30, 2010 | 10,406,789 | $ | 8.12 | 5.3 | $ | 135,094 | ||||||||||
Vested and expected to vest at June 30, 2010 | 11,011,447 | $ | 8.72 | 6.2 | $ | 136,322 |
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Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Risk-free interest rate | 2.66 | % | 1.79 | % | ||||
Expected term | 5.66 | 5.25 | ||||||
Expected volatility | 50 | % | 50 | % | ||||
Expected dividend yield | 0 | % | 0 | % |
Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
Unvested shares outstanding at December 31, 2009 | 913,856 | $ | 15.27 | |||||
Vested | (727,256 | ) | $ | 13.74 | ||||
Unvested shares outstanding at June 30, 2010 | 186,600 | $ | 21.25 | |||||
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Weighted | Remaining | |||||||||||||||
Average | Contractual | Aggregate | ||||||||||||||
Grant Date | Term | Intrinsic | ||||||||||||||
Shares | Fair Value | (Years) | Value | |||||||||||||
Outstanding at December 31, 2009 | 480,024 | $ | 19.00 | |||||||||||||
Granted | 36,015 | $ | 20.40 | |||||||||||||
Forfeited | (14,167 | ) | $ | 19.00 | ||||||||||||
Outstanding at June 30, 2010 | 501,872 | $ | 19.10 | 2.7 | $ | 10,589 | ||||||||||
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11. | Segment Reporting |
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Product net revenue: | ||||||||
Immunology/ Neurology | $ | 471,708 | $ | 463,543 | ||||
Pulmonology | 168,169 | 149,380 | ||||||
Critical Care/ Hemostasis | 86,718 | 76,734 | ||||||
Other | 45,122 | 45,322 | ||||||
Total product net revenue | 771,717 | 734,979 | ||||||
Other revenue | 12,070 | 12,386 | ||||||
Total net revenue | $ | 783,787 | $ | 747,365 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
United States | $ | 536,896 | $ | 497,089 | ||||
Canada | 96,537 | 103,865 | ||||||
Europe | 94,647 | 86,661 | ||||||
Other | 55,707 | 59,750 | ||||||
Total net revenue | $ | 783,787 | $ | 747,365 | ||||
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12. | Earnings per Share |
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Net income | $ | 92,962 | $ | 116,707 | ||||
Less: | ||||||||
Series A convertible preferred stock undeclared dividends | — | (6,322 | ) | |||||
Series B convertible preferred stock undeclared dividends | — | (1,410 | ) | |||||
Net income available to common stockholders | $ | 92,962 | $ | 108,975 | ||||
Weighted average common shares outstanding | 122,162,276 | 1,428,408 | ||||||
Basic net income per common share: | $ | 0.76 | $ | 76.29 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Net income | $ | 92,962 | $ | 116,707 | ||||
Weighted average common shares outstanding | 122,162,276 | 1,428,408 | ||||||
Plus incremental shares from assumed conversions: | ||||||||
Series A preferred stock | — | 72,000,000 | ||||||
Series B preferred stock | — | 13,846,320 | ||||||
Stock options and restricted shares | 5,666,813 | 6,588,232 | ||||||
Dilutive potential common shares | 127,829,089 | 93,862,960 | ||||||
Diluted net income per common share | $ | 0.73 | $ | 1.24 | ||||
Six Months Ended | ||||||||
June 30, | ||||||||
2010 | 2009 | |||||||
Stock options | 2,659,811 | 2,032,648 | ||||||
Weighted average exercise price | $ | 20.73 | $ | 21.21 |
13. | Fair Value of Financial Instruments |
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14. | Condensed Consolidating Financial Information |
Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash | $ | — | $ | 78,911 | $ | 10,591 | $ | — | $ | 89,502 | ||||||||||
Accounts receivable, net | — | 268,844 | 37,571 | (137,385 | ) | 169,030 | ||||||||||||||
Inventories | — | 617,554 | 35,830 | — | 653,384 | |||||||||||||||
Other | — | 124,187 | 1,117 | — | 125,304 | |||||||||||||||
Total current assets | — | 1,089,496 | 85,109 | (137,385 | ) | 1,037,220 | ||||||||||||||
Property, plant, and equipment, net | — | 301,974 | 1,104 | — | 303,078 | |||||||||||||||
Intangible assets | — | 10,880 | — | — | 10,880 | |||||||||||||||
Goodwill | — | 172,860 | — | — | 172,860 | |||||||||||||||
Investment in Subsidiaries | 753,677 | (31,411 | ) | — | (722,266 | ) | — | |||||||||||||
Advances and notes between Parent and Subsidiaries | 1,367,015 | 836,618 | — | (2,203,633 | ) | — | ||||||||||||||
Other | — | �� | 19,861 | 291 | — | 20,152 | ||||||||||||||
Total assets | $ | 2,120,692 | $ | 2,400,278 | $ | 86,504 | $ | (3,063,284 | ) | $ | 1,544,190 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 105,545 | $ | 102,116 | $ | (137,385 | ) | $ | 70,276 | |||||||||
Accrued expenses and other liabilities | 6,009 | 144,492 | 6,313 | — | 156,814 | |||||||||||||||
Current portion of capital lease obligations | — | 789 | — | — | 789 | |||||||||||||||
Total current liabilities | 6,009 | 250,826 | 108,429 | (137,385 | ) | 227,879 | ||||||||||||||
Long-term debt and capital lease obligations | 596,333 | 8,816 | — | — | 605,149 | |||||||||||||||
Advances and notes between Parent and Subsidiaries | 827,810 | 1,367,015 | 8,808 | (2,203,633 | ) | — | ||||||||||||||
Other | — | 19,944 | 678 | — | 20,622 | |||||||||||||||
Total liabilities | 1,430,152 | 1,646,601 | 117,915 | (2,341,018 | ) | 853,650 | ||||||||||||||
Stockholders’ equity (deficit) | 690,540 | 753,677 | (31,411 | ) | (722,266 | ) | 690,540 | |||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 2,120,692 | $ | 2,400,278 | $ | 86,504 | $ | (3,063,284 | ) | $ | 1,544,190 | |||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Net revenue | $ | — | $ | 704,402 | $ | 79,385 | $ | — | $ | 783,787 | ||||||||||
Cost of goods sold | — | 377,790 | 62,778 | — | 440,568 | |||||||||||||||
Gross profit | — | 326,612 | 16,607 | — | 343,219 | |||||||||||||||
Operating expenses | — | 157,232 | 18,551 | — | 175,783 | |||||||||||||||
Income (loss) from operations | — | 169,380 | (1,944 | ) | — | 167,436 | ||||||||||||||
Equity in earnings (losses) of Subsidiaries | 92,962 | (1,946 | ) | — | (91,016 | ) | — | |||||||||||||
Other non-operating (expense) income, net | — | (23,066 | ) | 6 | — | (23,060 | ) | |||||||||||||
Income (loss) before income taxes | 92,962 | 144,368 | (1,938 | ) | (91,016 | ) | 144,376 | |||||||||||||
Provision for income taxes | — | (51,406 | ) | (8 | ) | — | (51,414 | ) | ||||||||||||
Net income (loss) | $ | 92,962 | $ | 92,962 | $ | (1,946 | ) | $ | (91,016 | ) | $ | 92,962 | ||||||||
Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Net revenue | $ | — | $ | 682,083 | $ | 65,282 | $ | — | $ | 747,365 | ||||||||||
Cost of goods sold | — | 381,622 | 51,587 | — | 433,209 | |||||||||||||||
Gross profit | — | 300,461 | 13,695 | — | 314,156 | |||||||||||||||
Operating expenses | 3,757 | 149,367 | 16,862 | — | 169,986 | |||||||||||||||
Income (loss) from operations | (3,757 | ) | 151,094 | (3,167 | ) | — | 144,170 | |||||||||||||
Equity in earnings (losses) of Subsidiaries | 70,399 | (3,024 | ) | — | (67,375 | ) | — | |||||||||||||
Other non-operating (expense) income, net | 75,000 | (41,691 | ) | 17 | — | 33,326 | ||||||||||||||
Income (loss) before income taxes | 141,642 | 106,379 | (3,150 | ) | (67,375 | ) | 177,496 | |||||||||||||
(Provision) benefit for income taxes | (24,935 | ) | (35,980 | ) | 126 | — | (60,789 | ) | ||||||||||||
Net income (loss) | $ | 116,707 | $ | 70,399 | $ | (3,024 | ) | $ | (67,375 | ) | $ | 116,707 | ||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 92,962 | $ | 92,962 | $ | (1,946 | ) | $ | (91,016 | ) | $ | 92,962 | ||||||||
Undistributed equity in (earnings) losses of Subsidiaries | (92,962 | ) | 1,946 | — | 91,016 | — | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities | — | (52,409 | ) | 12,100 | 19,746 | (20,563 | ) | |||||||||||||
Net cash provided by operating activities | — | 42,499 | 10,154 | 19,746 | 72,399 | |||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property, plant, and equipment | — | (52,914 | ) | (291 | ) | — | (53,205 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | — | — | — | — | |||||||||||||||
Net advances and notes between Parent and Subsidiaries | (6,848 | ) | — | — | 6,848 | — | ||||||||||||||
Other | — | 5,185 | (4,824 | ) | — | 361 | ||||||||||||||
Net cash (used in) provided by investing activities | (6,848 | ) | (47,729 | ) | (5,115 | ) | 6,848 | (52,844 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net repayments of borrowings | — | — | — | — | — | |||||||||||||||
Net advances and notes between Parent and Subsidiaries | — | 26,594 | — | (26,594 | ) | — | ||||||||||||||
Other | 6,848 | (773 | ) | — | — | 6,075 | ||||||||||||||
Net cash provided by (used in) financing activities | 6,848 | 25,821 | — | (26,594 | ) | 6,075 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | (1,367 | ) | — | (1,367 | ) | |||||||||||||
Net increase in cash and cash equivalents | — | 20,591 | 3,672 | — | 24,263 | |||||||||||||||
Cash and cash equivalents at beginning of period | — | 58,320 | 6,919 | — | 65,239 | |||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 78,911 | $ | 10,591 | $ | — | $ | 89,502 | ||||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 116,707 | $ | 70,399 | $ | (3,024 | ) | $ | (67,375 | ) | $ | 116,707 | ||||||||
Undistributed equity in (earnings) losses of Subsidiaries | (70,399 | ) | 3,024 | — | 67,375 | — | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities | (110 | ) | 5,338 | (4,529 | ) | 13,500 | 14,199 | |||||||||||||
Net cash provided by (used in) operating activities | 46,198 | 78,761 | (7,553 | ) | 13,500 | 130,906 | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property, plant, and equipment | — | (23,575 | ) | (97 | ) | — | (23,672 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | (16,802 | ) | — | — | (16,802 | ) | |||||||||||||
Net advances and notes between Parent and Subsidiaries | (43,733 | ) | — | — | 43,733 | — | ||||||||||||||
Other | — | (8,917 | ) | 6,142 | — | (2,775 | ) | |||||||||||||
Net cash (used in) provided by investing activities | (43,733 | ) | (49,294 | ) | 6,045 | 43,733 | (43,249 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net repayments of borrowings | — | (90,203 | ) | — | — | (90,203 | ) | |||||||||||||
Net advances and notes between Parent and Subsidiaries | — | 57,233 | — | (57,233 | ) | — | ||||||||||||||
Other | (2,465 | ) | (257 | ) | — | — | (2,722 | ) | ||||||||||||
Net cash used in financing activities | (2,465 | ) | (33,227 | ) | — | (57,233 | ) | (92,925 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 118 | — | 118 | |||||||||||||||
Net increase in cash and cash equivalents | — | (3,760 | ) | (1,390 | ) | — | (5,150 | ) | ||||||||||||
Cash and cash equivalents at beginning of period | — | 10,727 | 6,252 | — | 16,979 | |||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | 6,967 | $ | 4,862 | $ | — | $ | 11,829 | ||||||||||
15. | Subsequent Events |
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December 31, | ||||||||
2009 | 2008 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 65,239 | $ | 16,979 | ||||
Accounts receivable, net of allowances of $3,461 and $2,020, respectively | 136,978 | 148,417 | ||||||
Inventories | 644,054 | 581,720 | ||||||
Deferred income taxes | 88,652 | 76,587 | ||||||
Prepaid expenses and other | 31,466 | 43,552 | ||||||
Total current assets | 966,389 | 867,255 | ||||||
Property, plant, and equipment, net | 267,199 | 213,251 | ||||||
Investment in affiliate | 1,935 | 1,719 | ||||||
Intangible assets, net | 10,880 | 7,204 | ||||||
Goodwill | 172,860 | 135,800 | ||||||
Deferred income taxes | 5,848 | 33,353 | ||||||
Other | 19,894 | 48,817 | ||||||
Total assets | $ | 1,445,005 | $ | 1,307,399 | ||||
LIABILITIES, OBLIGATIONS UNDER COMMON STOCK PUT/CALL OPTION, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 71,046 | $ | 54,903 | ||||
Accrued expenses and other liabilities | 170,533 | 167,377 | ||||||
Current portion of long-term debt and capital lease obligations | 740 | 7,341 | ||||||
Total current liabilities | 242,319 | 229,621 | ||||||
Long-term debt and capital lease obligations | 605,267 | 1,194,205 | ||||||
Other | 15,265 | 60,344 | ||||||
Total liabilities | 862,851 | 1,484,170 | ||||||
Commitments and contingencies | ||||||||
Obligations under common stock put/call option | — | 29,419 | ||||||
Redeemable series A and B preferred stock; $0.01 par value, 40,000,010 shares authorized; 0 shares and 1,192,310 shares issued and outstanding, respectively | — | 110,535 | ||||||
Stockholders’ equity (deficit): | ||||||||
Common stock, $0.01 par value; 400,000,000 shares authorized; 122,173,274 shares and 2,856,288 shares issued and outstanding, respectively | 1,212 | — | ||||||
Additional paid-in capital | 767,032 | 47,017 | ||||||
Accumulated deficit | (186,446 | ) | (340,335 | ) | ||||
Accumulated other comprehensive income (loss), net of tax | 356 | (23,407 | ) | |||||
Total stockholders’ equity (deficit) | 582,154 | (316,725 | ) | |||||
Total liabilities, obligations under common stock put/call option, redeemable preferred stock, and stockholders’ equity (deficit) | $ | 1,445,005 | $ | 1,307,399 | ||||
consolidated financial statements.
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net revenue: | ||||||||||||
Product | $ | 1,507,754 | $ | 1,334,550 | $ | 1,196,686 | ||||||
Other | 25,455 | 39,742 | 21,823 | |||||||||
Total | 1,533,209 | 1,374,292 | 1,218,509 | |||||||||
Cost of goods sold | 901,077 | 882,157 | 788,152 | |||||||||
Gross profit | 632,132 | 492,135 | 430,357 | |||||||||
Operating expenses: | ||||||||||||
Selling, general, and administrative | 289,929 | 227,524 | 189,387 | |||||||||
Research and development | 71,223 | 66,006 | 61,336 | |||||||||
Total | 361,152 | 293,530 | 250,723 | |||||||||
Income from operations | 270,980 | 198,605 | 179,634 | |||||||||
Other non-operating (expense) income | ||||||||||||
Interest expense, net | (74,491 | ) | (96,640 | ) | (110,236 | ) | ||||||
Merger termination fee | 75,000 | — | — | |||||||||
Loss on extinguishment of debt | (43,033 | ) | — | — | ||||||||
Litigation settlement | — | — | 12,937 | |||||||||
Equity in earnings of affiliate | 441 | 426 | 436 | |||||||||
Total | (42,083 | ) | (96,214 | ) | (96,863 | ) | ||||||
Income before income taxes | 228,897 | 102,391 | 82,771 | |||||||||
(Provision) benefit for income taxes | (75,008 | ) | (36,594 | ) | 40,794 | |||||||
Net income | 153,889 | 65,797 | 123,565 | |||||||||
Less dividends to preferred stockholders and other non-common stockholders’ charges | (11,744 | ) | (14,672 | ) | (13,014 | ) | ||||||
Net income available to common stockholders | $ | 142,145 | $ | 51,125 | $ | 110,551 | ||||||
Net income per common share | ||||||||||||
Basic | $ | 4.56 | $ | 39.01 | $ | 65.58 | ||||||
Diluted | $ | 1.50 | $ | 0.71 | $ | 1.36 | ||||||
consolidated financial statements.
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization | 28,936 | 20,269 | 10,749 | |||||||||
Amortization of deferred loan fees and debt discount | 3,785 | 3,764 | 3,767 | |||||||||
Share-based compensation expense | 47,546 | 38,707 | 21,241 | |||||||||
Amortization of deferred compensation | 5,714 | 5,922 | 6,753 | |||||||||
Write-off of unamortized debt issuance costs | 12,141 | — | — | |||||||||
Asset impairment | 3,061 | 4,282 | 2,789 | |||||||||
Provision for doubtful receivables and advances | 2,858 | 4,978 | 525 | |||||||||
Recognition of previously deferred revenue | (230 | ) | (4,784 | ) | — | |||||||
Equity in earnings of affiliate | (441 | ) | (426 | ) | (436 | ) | ||||||
Loss (gain) on disposal of property, plant, and equipment | 1,196 | 48 | (94 | ) | ||||||||
Decrease (increase) in deferred tax assets | 1,215 | (5,488 | ) | (79,707 | ) | |||||||
Excess tax benefits from share-based payment arrangements | (13,406 | ) | — | — | ||||||||
Changes in assets and liabilities, excluding the effects of business acquisitions | (12,109 | ) | (100,055 | ) | 37,979 | |||||||
Net cash provided by operating activities | 234,155 | 33,014 | 127,131 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of property, plant, and equipment | (75,163 | ) | (86,212 | ) | (65,833 | ) | ||||||
Business acquisitions, net of cash acquired | (30,431 | ) | (10,272 | ) | (17,456 | ) | ||||||
Financing arrangements with third party suppliers, net of repayments | 744 | (16,335 | ) | (7,866 | ) | |||||||
Net proceeds from disposals of property, plant, and equipment | 7 | 880 | 322 | |||||||||
Dividends from affiliate | 225 | — | 188 | |||||||||
Net cash used in investing activities | (104,618 | ) | (111,939 | ) | (90,645 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Borrowings under Revolving Credit Facility | 1,201,749 | 1,430,092 | 1,237,453 | |||||||||
Repayment of borrowings under Revolving Credit Facility | (1,381,690 | ) | (1,363,188 | ) | (1,204,336 | ) | ||||||
Repayment of borrowings under term loans | (1,016,000 | ) | (7,000 | ) | (7,000 | ) | ||||||
Repayment of capital lease obligations | (574 | ) | (1,192 | ) | (23 | ) | ||||||
Proceeds from issuance of 7.75% Notes | 600,000 | — | — | |||||||||
Discount on 7.75% Notes | (4,074 | ) | — | — | ||||||||
Financing transaction costs | (14,879 | ) | — | (217 | ) | |||||||
Proceeds from initial public offering, net of issuance costs | 519,749 | — | — | |||||||||
Costs related to initial public offering | (2,557 | ) | — | — | ||||||||
Repurchases of common stock | (4,183 | ) | (36,118 | ) | — | |||||||
Proceeds from exercises of stock options | 7,581 | — | — | |||||||||
Excess tax benefits from share-based payment arrangements | 13,406 | — | — | |||||||||
Net cash (used in) provided by financing activities | (81,472 | ) | 22,594 | 25,877 | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 195 | (157 | ) | 62 | ||||||||
Net increase (decrease) in cash and cash equivalents | 48,260 | (56,488 | ) | 62,425 | ||||||||
Cash and cash equivalents at beginning of year | 16,979 | 73,467 | 11,042 | |||||||||
Cash and cash equivalents at end of year | $ | 65,239 | $ | 16,979 | $ | 73,467 | ||||||
consolidated financial statements.
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Accumulated | ||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Additional | Comprehensive | |||||||||||||||||||||||||||
Common Stock | Paid-in | Treasury | Accumulated | (Loss) | ||||||||||||||||||||||||
Shares | Amount | Capital | Stock | Deficit | Income | Total | ||||||||||||||||||||||
Balance at December 31, 2006 | 2,426,792 | $ | — | $ | — | $ | — | $ | (529,000 | ) | $ | 20 | $ | (528,980 | ) | |||||||||||||
Net income | — | — | — | — | 123,565 | — | 123,565 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (11,655 | ) | (11,655 | ) | |||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 111,910 | |||||||||||||||||||||
Share-based compensation cost | — | — | 14,464 | — | — | — | 14,464 | |||||||||||||||||||||
Issuance of common stock to IBR | 2,146,232 | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of restricted stock | 762,400 | — | — | — | — | — | — | |||||||||||||||||||||
Forfeitures of restricted stock | (18,192 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Adoption of new income tax accounting guidance | — | — | — | — | (697 | ) | — | (697 | ) | |||||||||||||||||||
Fair value of common stock issued to IBR in excess of put value | — | — | 12,106 | — | — | — | 12,106 | |||||||||||||||||||||
Interest accretion on IBR put option | — | — | (1,614 | ) | — | — | — | (1,614 | ) | |||||||||||||||||||
Fair value adjustment on common stock with put/call feature | — | — | 2,054 | — | — | — | 2,054 | |||||||||||||||||||||
Balance at December 31, 2007 | 5,317,232 | — | 27,010 | — | (406,132 | ) | (11,635 | ) | (390,757 | ) | ||||||||||||||||||
Net income | — | — | — | — | 65,797 | — | 65,797 | |||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (11,772 | ) | (11,772 | ) | |||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 54,025 | |||||||||||||||||||||
Share-based compensation cost | — | — | 29,258 | — | — | — | 29,258 | |||||||||||||||||||||
Issuance of restricted stock | 42,720 | — | — | — | — | — | — | |||||||||||||||||||||
Forfeitures of restricted stock | (287,784 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Repurchases of common stock | (2,215,880 | ) | 3 | 36,115 | (36,118 | ) | — | — | — | |||||||||||||||||||
Retirement of common stock | — | (3 | ) | (36,115 | ) | 36,118 | — | — | — | |||||||||||||||||||
Fair value adjustment on common stock with put/call feature | — | — | (8,942 | ) | — | — | — | (8,942 | ) | |||||||||||||||||||
Interest accretion on IBR put option | — | — | (309 | ) | — | — | — | (309 | ) | |||||||||||||||||||
Balance at December 31, 2008 | 2,856,288 | — | 47,017 | — | (340,335 | ) | (23,407 | ) | (316,725 | ) | ||||||||||||||||||
Net income | — | — | — | — | 153,889 | — | 153,889 | |||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 476 | 476 | |||||||||||||||||||||
Reclassification of unrealized loss on derivatives to earnings | — | — | — | — | — | 23,287 | 23,287 | |||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | 177,652 | |||||||||||||||||||||
Share-based compensation cost | — | — | 39,206 | — | — | — | 39,206 | |||||||||||||||||||||
Issuance of restricted stock | 14,464 | — | — | — | — | — | — | |||||||||||||||||||||
Forfeitures of restricted stock | (16,368 | ) | — | — | — | — | — | — | ||||||||||||||||||||
Repurchases of common stock | (251,108 | ) | — | 4,132 | (4,183 | ) | — | — | (51 | ) | ||||||||||||||||||
Retirement of common stock | — | — | (4,183 | ) | 4,183 | — | — | — | ||||||||||||||||||||
Series A and B preferred stock dividends declared | — | — | (45,250 | ) | — | — | — | (45,250 | ) | |||||||||||||||||||
Conversion of Series A and B preferred stock to common stock | 88,227,868 | 882 | 154,903 | — | — | — | 155,785 | |||||||||||||||||||||
Initial public offering | 28,947,368 | 289 | 519,460 | — | — | — | 519,749 | |||||||||||||||||||||
Costs related to initial public offering | — | — | (2,557 | ) | — | — | — | (2,557 | ) | |||||||||||||||||||
Fair value adjustment on common stock with put/call feature | — | — | (6,585 | ) | — | — | — | (6,585 | ) | |||||||||||||||||||
Reclassification of mezzanine equity to permanent equity upon cancellation of common stock put/call feature | — | 17 | 39,926 | — | — | — | 39,943 | |||||||||||||||||||||
Stock option exercises | 2,394,762 | 24 | 7,557 | — | — | — | 7,581 | |||||||||||||||||||||
Excess tax benefit from share-based compensation | — | — | 13,406 | — | — | — | 13,406 | |||||||||||||||||||||
Balance at December 31, 2009 | 122,173,274 | $ | 1,212 | $ | 767,032 | $ | — | $ | (186,446 | ) | $ | 356 | $ | 582,154 | ||||||||||||||
consolidated financial statements.
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1. | Description of Business |
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2. | Summary of Significant Accounting Policies |
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• | At June 30, 2010: ASD Specialty Care — 13.1%; FFF Enterprise, Inc. — 12.9% | |
• | At December 31, 2009: FFF Enterprise, Inc. — 14.6% | |
• | At December 31, 2008: FFF Enterprise, Inc. — 15.0%; ASD Specialty Care — 14.0% |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
FFF Enterprise Inc. | 14.4 | % | 12.8 | % | 18.2 | % | ||||||
AmeriSource Bergen | 12.3 | % | 12.0 | % | 14.9 | % | ||||||
Canadian Blood Services | NA | 10.6 | % | 10.5 | % |
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Asset Type | Useful Life (Years) | |
Buildings | 10 to 45 | |
Building improvements | 10 to 20 | |
Machinery and equipment | 3 to 20 | |
Furniture and fixtures | 5 to 10 | |
Computer hardware and software | 3 to 7 | |
Leasehold improvements | the estimated useful life of the improvement or, if shorter, the life of the lease |
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Gross | Tax | Net | ||||||||||
Amount | Effect | Amount | ||||||||||
Year ended December 31, 2009 | �� | |||||||||||
Foreign currency translation adjustments | $ | 232 | $ | — | $ | 232 | ||||||
Additional minimum pension liability | 244 | — | 244 | |||||||||
Reclassification of unrealized loss on derivatives to earnings | 37,513 | (14,226 | ) | 23,287 | ||||||||
Other comprehensive income | $ | 37,989 | $ | (14,226 | ) | $ | 23,763 | |||||
Year ended December 31, 2008 | ||||||||||||
Foreign currency translation adjustments | $ | (216 | ) | $ | — | $ | (216 | ) | ||||
Net unrealized loss on derivative financial instruments | (18,477 | ) | 6,973 | (11,504 | ) | |||||||
Additional minimum pension liability | (52 | ) | — | (52 | ) | |||||||
Other comprehensive loss | $ | (18,745 | ) | $ | 6,973 | $ | (11,772 | ) | ||||
Year ended December 31, 2007 | ||||||||||||
Foreign currency translation adjustments | $ | 128 | $ | — | $ | 128 | ||||||
Net unrealized loss on derivative financial instruments | (19,036 | ) | 7,253 | (11,783 | ) | |||||||
Other comprehensive loss | $ | (18,908 | ) | $ | 7,253 | $ | (11,655 | ) | ||||
December 31, | ||||||||
2009 | 2008 | |||||||
Foreign currency translation adjustments | $ | 164 | $ | (68 | ) | |||
Net unrealized loss on derivative financial instruments | — | (23,287 | ) | |||||
Additional minimum pension liability | 192 | (52 | ) | |||||
Accumulated other comprehensive income (loss) | $ | 356 | $ | (23,407 | ) | |||
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3. | Initial Public Offering and Use of Proceeds |
4. | Definitive Merger Agreement with CSL Limited (CSL) |
5. | Business Acquisitions |
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Payments at closing | $ | 5,181 | $ | 2,147 | $ | 16,211 | ||||||
Notes receivable and other advances | 44,540 | 10,430 | — | |||||||||
Performance incentive payments | 837 | 843 | — | |||||||||
Allocable portion of accelerated contingent consideration | 6,020 | 2,580 | — | |||||||||
Transaction costs | — | 56 | 475 | |||||||||
Total purchase price | $ | 56,578 | $ | 16,056 | $ | 16,686 | ||||||
Cash and cash equivalents | $ | 62 | $ | 21 | $ | 55 | ||||||
Inventory | 5,416 | 1,778 | 2,209 | |||||||||
Other current assets | 183 | — | — | |||||||||
Property, plant, and equipment | 10,181 | 1,814 | 1,095 | |||||||||
Intangible assets-regulatory licenses | 3,860 | 840 | 280 | |||||||||
Goodwill | 37,060 | 11,643 | 13,089 | |||||||||
Total assets acquired | 56,762 | 16,096 | 16,728 | |||||||||
Current liabilities assumed | (184 | ) | (40 | ) | (42 | ) | ||||||
Total purchase price | $ | 56,578 | $ | 16,056 | $ | 16,686 | ||||||
Number of plasma collection centers acquired | 12 | 3 | 3 | |||||||||
6. | Goodwill and Intangible Assets |
Balance at December 31, 2007 | $ | 124,157 | ||
Acquisitions of plasma collection centers from IBR | 11,643 | |||
Balance at December 31, 2008 | 135,800 | |||
Acquisitions of plasma collection centers from IBR | 37,060 | |||
Balance at December 31, 2009 | $ | 172,860 | ||
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7. | Collaborative and Other Agreements |
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8. | Inventories and Cost of Goods Sold |
December 31, | ||||||||
2009 | 2008 | |||||||
Raw material | $ | 171,866 | $ | 155,055 | ||||
Work-in-process | 312,178 | 306,950 | ||||||
Finished goods | 160,010 | 119,715 | ||||||
Total inventories | $ | 644,054 | $ | 581,720 | ||||
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9. | Property, Plant, and Equipment, net |
December 31, | ||||||||
2009 | 2008 | |||||||
Land | $ | 4,136 | $ | 4,136 | ||||
Buildings and improvements | 68,417 | 47,764 | ||||||
Machinery and equipment | 102,887 | 67,446 | ||||||
Furniture and fixtures | 5,492 | 4,996 | ||||||
Computer hardware and software | 54,761 | 42,762 | ||||||
Capital leases of buildings | 8,374 | 6,639 | ||||||
244,067 | 173,743 | |||||||
Less: accumulated depreciation and amortization | (62,463 | ) | (36,308 | ) | ||||
181,604 | 137,435 | |||||||
Construction in progress | 85,595 | 75,816 | ||||||
Total property, plant, and equipment, net | $ | 267,199 | $ | 213,251 | ||||
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10. | Investment in Affiliate |
11. | Long-Term Debt and Capital Lease Obligations |
December 31, | ||||||||
2009 | 2008 | |||||||
Revolving Credit Facility | $ | — | $ | 179,941 | ||||
7.75% Notes | 600,000 | — | ||||||
Discount on 7.75% Notes | (3,954 | ) | — | |||||
First Lien Term Loan | — | 686,000 | ||||||
Second Lien Term Loan | — | 330,000 | ||||||
Capital lease obligations | 9,961 | 5,605 | ||||||
Total debt and capital lease obligations | 606,007 | 1,201,546 | ||||||
Less: current maturities | (740 | ) | (7,341 | ) | ||||
Long-term debt and capital lease obligations, net of current maturities | $ | 605,267 | $ | 1,194,205 | ||||
October 6, | October 21, | |||||||||||||||||||||||
December 31, | 2009 Net | 2009 | 2009 | December 31, | ||||||||||||||||||||
2008 | Repayments | IPO | Refinancing | Amortization | 2009 | |||||||||||||||||||
Revolving Credit Facility | $ | 179,941 | $ | (124,348 | ) | $ | — | $ | (55,593 | ) | $ | — | $ | — | ||||||||||
First Lien Term Loan | 686,000 | (5,250 | ) | (389,812 | ) | (290,938 | ) | — | — | |||||||||||||||
Second Lien Term Loan | 330,000 | — | (129,937 | ) | (200,063 | ) | — | — | ||||||||||||||||
7.75% Notes | — | — | — | 600,000 | — | 600,000 | ||||||||||||||||||
Discount on 7.75% Notes | — | — | — | (4,074 | ) | 120 | (3,954 | ) | ||||||||||||||||
Total indebtedness | $ | 1,195,941 | $ | (129,598 | ) | $ | (519,749 | ) | $ | 49,332 | $ | 120 | $ | 596,046 | ||||||||||
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Newly | ||||||||||||||||||||
Capitalized | ||||||||||||||||||||
December 31, | Debt Issuance | December 31, | ||||||||||||||||||
2008 | Charges | Costs | Amortization | 2009 | ||||||||||||||||
Revolving Credit Facility | $ | 3,014 | $ | — | $ | 1,545 | $ | (1,041 | ) | $ | 3,518 | |||||||||
First Lien Term Loan | 9,629 | (8,054 | ) | — | (1,575 | ) | — | |||||||||||||
Second Lien Term Loan | 4,744 | (4,087 | ) | — | (657 | ) | — | |||||||||||||
7.75% Notes | — | — | 13,334 | (392 | ) | 12,942 | ||||||||||||||
Total deferred debt issuance costs | $ | 17,387 | $ | (12,141 | ) | $ | 14,879 | $ | (3,665 | ) | $ | 16,460 | ||||||||
Fiscal Year | Percentage | |||
2012 | 103.875 | % | ||
2013 | 102.583 | % | ||
2014 | 101.292 | % | ||
2015 and thereafter | 100.000 | % |
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• | Write-offs, write-downs, asset revaluations and other non-cash charges, losses, and expenses, including non-cash equity compensation expense; | |
• | Impairments of intangibles and goodwill; | |
• | Extraordinary gains and losses; | |
• | Fees paid pursuant to our Management Agreement, as amended, with Talecris Holdings, LLC, which was terminated in connection with our IPO; | |
• | Fees and expenses incurred in connection with transactions and permitted acquisitions and investments; | |
• | Extraordinary, unusual, or non-recurring charges and expenses including transition, restructuring, and “carve-out” expenses; | |
• | Legal, accounting, consulting, and other expenses relating to the potential or actual issuance of equity interests, including an initial public offering of common stock; | |
• | Costs associated with our Special Recognition Bonuses; and | |
• | Other items. |
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12. | Income Taxes |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Current provision: | ||||||||||||
Federal | $ | 68,960 | $ | 28,639 | $ | 24,394 | ||||||
State and local | 3,421 | 4,590 | 5,438 | |||||||||
Foreign | 1,348 | 1,776 | 1,919 | |||||||||
Total current provision | 73,729 | 35,005 | 31,751 | |||||||||
Deferred provision (benefit): | ||||||||||||
Federal | 69 | 7 | (14,464 | ) | ||||||||
State and local | 1,210 | 1,582 | (2,327 | ) | ||||||||
Total deferred provision (benefit) | 1,279 | 1,589 | (16,791 | ) | ||||||||
Change in valuation allowance | — | — | (55,754 | ) | ||||||||
Provision (benefit) for income taxes | $ | 75,008 | $ | 36,594 | $ | (40,794 | ) | |||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Amount computed at statutory rate | $ | 80,114 | $ | 35,837 | $ | 28,969 | ||||||
State income taxes (net of Federal benefit) | 4,291 | 4,059 | 3,201 | |||||||||
Research and development credits | (7,732 | ) | (4,052 | ) | (10,034 | ) | ||||||
State tax credits (net of Federal benefit) | (871 | ) | (600 | ) | (1,895 | ) | ||||||
Federal benefit of tax deductions for qualified production activities | (2,764 | ) | (2,037 | ) | (2,166 | ) | ||||||
Capitalized transaction costs | (2,352 | ) | 584 | 2,087 | ||||||||
Nondeductible meals and entertainment expenses | 504 | 425 | 520 | |||||||||
Bayer settlement | — | — | (3,150 | ) | ||||||||
Other | 3,818 | 2,378 | (2,572 | ) | ||||||||
Change in valuation allowance | — | — | (55,754 | ) | ||||||||
Provision (benefit) for income taxes | $ | 75,008 | $ | 36,594 | $ | (40,794 | ) | |||||
December 31, | ||||||||
2009 | 2008 | |||||||
Current: | ||||||||
Deferred income tax assets: | ||||||||
Allowances on accounts receivable | $ | 11,020 | $ | 6,825 | ||||
Inventories | 23,928 | 25,023 | ||||||
Revenue recognition | 7,857 | 6,148 | ||||||
Stock-based compensation | 30,952 | 20,085 | ||||||
Deferred bonuses | 4,617 | 9,980 | ||||||
Accrued expenses | 4,568 | 4,683 | ||||||
State tax credit carry-forward | 3,195 | 2,991 | ||||||
Other | 3,543 | 1,782 | ||||||
Total deferred income tax assets | 89,680 | 77,517 | ||||||
Deferred income tax liabilities: | ||||||||
Other liabilities | (1,028 | ) | (930 | ) | ||||
Total deferred income tax liabilities | (1,028 | ) | (930 | ) | ||||
Net current deferred income tax assets | $ | 88,652 | $ | 76,587 | ||||
Non-current: | ||||||||
Deferred income tax assets: | ||||||||
Property, plant, and equipment | $ | 14,170 | $ | 23,615 | ||||
Interest rate swaps and caps | — | 14,225 | ||||||
Other | 252 | — | ||||||
Total deferred income tax assets | 14,422 | 37,840 | ||||||
Deferred income tax liabilities: | ||||||||
Intangibles | (8,574 | ) | (3,973 | ) | ||||
Other | — | (514 | ) | |||||
Total deferred income tax liabilities | (8,574 | ) | (4,487 | ) | ||||
Net non-current deferred income tax assets | $ | 5,848 | $ | 33,353 | ||||
Net deferred income tax assets | $ | 94,500 | $ | 109,940 | ||||
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Unrecognized tax benefits at January 1, 2007 | $ | 6,893 | ||
Additions for tax positions taken in the current year | 2,959 | |||
Reductions for tax positions taken in a prior year | (2,967 | ) | ||
Unrecognized tax benefits at December 31, 2007 | 6,885 | |||
Additions for tax positions taken in the current year | 3,626 | |||
Reductions for tax positions taken in a prior year | (521 | ) | ||
Unrecognized tax benefits at December 31, 2008 | 9,990 | |||
Additions for tax positions taken in the current year | 3,899 | |||
Reductions for tax positions taken in a prior year | (1,642 | ) | ||
Unrecognized tax benefits at December 31, 2009 | $ | 12,247 | ||
12. | Income Taxes |
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13. | Commitments and Contingencies |
Capital Leases | Non-Cancellable Operating Leases | |||||||
2010 | $ | 1,740 | $ | 16,727 | ||||
2011 | 1,762 | 12,401 | ||||||
2012 | 1,784 | 7,857 | ||||||
2013 | 1,810 | 4,501 | ||||||
2014 | 1,778 | 3,212 | ||||||
Thereafter | 6,283 | 5,788 | ||||||
Total future minimum lease payments | 15,157 | $ | 50,486 | |||||
Less: amounts representing interest | (5,196 | ) | ||||||
Present value of net minimum lease payments | 9,961 | |||||||
Less: current portion of capital lease obligations | (740 | ) | ||||||
Total | $ | 9,221 | ||||||
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2010 | $ | 202,307 | ||
2011 | 162,615 | |||
2012 | 101,385 | |||
2013 | 86,307 | |||
2014 | 52,947 | |||
Thereafter | 113,969 | |||
Total | $ | 719,530 | ||
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14. | Related Party Transactions |
Related Party | Activity/ Transaction | Expenses | ||||
Year Ended December 31, 2009 | ||||||
Centric | Product distribution and other services | $ | 20,306 | |||
Cerberus/ Ampersand | Management fees | $ | 5,715 | |||
Cerberus | Operational support | $ | 608 | |||
Year Ended December 31, 2008 | ||||||
Centric | Product distribution and other services | $ | 17,508 | |||
Cerberus/ Ampersand | Management fees | $ | 6,871 | |||
Cerberus | Operational support | $ | 4,184 | |||
Year Ended December 31, 2007 | ||||||
Centric | Product distribution and other services | $ | 14,509 | |||
Cerberus/Ampersand | Management fees | $ | 6,097 | |||
Cerberus | Operational support | $ | 867 |
Payable | ||||||||||
December 31, | ||||||||||
Related Party | Activity/ Transaction | 2009 | 2008 | |||||||
Centric | Product distribution and other services | $ | 5,537 | $ | 3,690 | |||||
Cerberus/Ampersand | Management fees | $ | — | $ | 2,007 | |||||
Cerberus | Operational support | $ | 349 | $ | 708 |
15. | Equity Transactions |
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16. | Redeemable Series A and B Senior Convertible Preferred Stock |
17. | Share-Based Compensation |
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Stock Options | ||||||||||||||||
Service- | Performance- | Restricted | ||||||||||||||
Year Ended December 31, 2009 | Based | Based | Stock | RSU’s | ||||||||||||
SG&A | $ | 27,246 | $ | 4,102 | $ | 9,402 | $ | 218 | ||||||||
R&D | 1,295 | 415 | 535 | 58 | ||||||||||||
Cost of goods sold | 2,585 | 854 | 836 | — | ||||||||||||
Total expense | $ | 31,126 | $ | 5,371 | $ | 10,773 | $ | 276 | ||||||||
Stock Options | ||||||||||||||||
Service- | Performance- | Restricted | ||||||||||||||
Year Ended December 31, 2008 | Based | Based | Stock | Total | ||||||||||||
SG&A | $ | 16,245 | $ | 7,992 | $ | 9,543 | $ | 33,780 | ||||||||
R&D | 1,011 | 815 | 535 | 2,361 | ||||||||||||
Cost of goods sold | 975 | 854 | 737 | 2,566 | ||||||||||||
Total expense | $ | 18,231 | $ | 9,661 | $ | 10,815 | $ | 38,707 | ||||||||
Stock Options | ||||||||||||||||
Service- | Performance- | Restricted | ||||||||||||||
Year Ended December 31, 2007 | Based | Based | Stock | Total | ||||||||||||
SG&A | $ | 4,697 | $ | 7,406 | $ | 6,509 | $ | 18,612 | ||||||||
R&D | 117 | 743 | 536 | 1,396 | ||||||||||||
Cost of goods sold | 484 | 464 | 285 | 1,233 | ||||||||||||
Total expense | $ | 5,298 | $ | 8,613 | $ | 7,330 | $ | 21,241 | ||||||||
Weighted- | ||||||||
Unrecognized | Average | |||||||
Compensation | Period | |||||||
Cost | (Years) | |||||||
Stock options | $ | 9,878 | 1.75 | |||||
Restricted share awards | 6,977 | 0.66 | ||||||
RSU’s | 7,912 | 3.25 | ||||||
Total | $ | 24,767 | 1.92 | |||||
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Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term (Years) | Value | |||||||||||||
Outstanding at December 31, 2006 | 10,454,424 | $ | 2.72 | |||||||||||||
Granted | 2,637,152 | $ | 21.21 | |||||||||||||
Forfeited | (159,232 | ) | $ | 8.54 | ||||||||||||
Outstanding at December 31, 2007 | 12,932,344 | $ | 6.42 | |||||||||||||
Granted | 2,291,304 | $ | 10.98 | |||||||||||||
Forfeited | (945,232 | ) | $ | 2.98 | ||||||||||||
Outstanding at December 31, 2008 | 14,278,416 | $ | 6.96 | |||||||||||||
Granted | 638,472 | $ | 18.91 | |||||||||||||
Forfeited | (392,688 | ) | $ | 4.89 | ||||||||||||
Exercised | (2,394,762 | ) | $ | 3.17 | ||||||||||||
Outstanding at December 31, 2009 | 12,129,438 | $ | 8.40 | 6.7 | $ | 168,235 | ||||||||||
Exercisable at December 31, 2009 | 8,711,838 | $ | 8.16 | 5.8 | $ | 122,924 | ||||||||||
Vested and expected to vest at December 31, 2009 | 12,111,507 | $ | 8.40 | 6.7 | $ | 167,987 |
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Risk-free interest rate | 2.66 | % | 2.65 | % | 5.00 | % | ||||||
Expected term (life) | 5.97 | 5.20 | 6.2 | |||||||||
Expected volatility | 50 | % | 50 | % | 50 | % | ||||||
Expected dividend yield | 0 | % | 0 | % | 0 | % |
Weighted | ||||||||||||||||
Weighted | Average | |||||||||||||||
Average | Remaining | Aggregate | ||||||||||||||
Grant Date | Contractual | Intrinsic | ||||||||||||||
Shares | Fair Value | Term (Years) | Value | |||||||||||||
Outstanding at December 31, 2008 | — | — | ||||||||||||||
Granted | 483,100 | $ | 19.00 | |||||||||||||
Forfeited | (3,076 | ) | $ | 19.00 | ||||||||||||
Outstanding at December 31, 2009 | 480,024 | $ | 19.00 | 3.25 | $ | 10,690 | ||||||||||
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Weighted | ||||||||
Average | ||||||||
Grant Date | ||||||||
Shares | Fair Value | |||||||
December 31, 2006 unvested shares outstanding | 2,066,792 | $ | 11.00 | |||||
Granted | 762,400 | $ | 21.25 | |||||
Forfeited | (18,192 | ) | $ | 11.00 | ||||
December 31, 2007 unvested shares outstanding | 2,811,000 | $ | 13.78 | |||||
Granted | 42,720 | $ | 9.88 | |||||
Forfeited | (287,784 | ) | $ | 11.00 | ||||
Vested | (870,432 | ) | $ | 13.45 | ||||
December 31, 2008 unvested shares outstanding | 1,695,504 | $ | 14.40 | |||||
Granted | 14,464 | $ | 16.63 | |||||
Forfeited | (16,368 | ) | $ | 11.00 | ||||
Vested | (779,744 | ) | $ | 13.50 | ||||
December 31, 2009 unvested shares outstanding | 913,856 | $ | 15.27 | |||||
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18. | Employee Benefit Plans |
19. | Deferred Compensation |
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20. | Segment Reporting |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Product net revenue: | ||||||||||||
Immunology/Neurology | $ | 928,054 | $ | 781,408 | $ | 743,128 | ||||||
Pulmonology | 319,080 | 316,495 | 276,538 | |||||||||
Critical Care/Hemostasis | 167,469 | 134,216 | 127,935 | |||||||||
Other | 93,151 | 102,431 | 49,085 | |||||||||
Total product net revenue | 1,507,754 | 1,334,550 | 1,196,686 | |||||||||
Other revenue | 25,455 | 39,742 | 21,823 | |||||||||
Total net revenue | $ | 1,533,209 | $ | 1,374,292 | $ | 1,218,509 | ||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
United States | $ | 1,011,468 | $ | 906,376 | $ | 817,276 | ||||||
Canada | 214,883 | 215,964 | 189,923 | |||||||||
Europe | 185,297 | 168,081 | 136,972 | |||||||||
Other | 121,561 | 83,871 | 74,338 | |||||||||
Total net revenue | $ | 1,533,209 | $ | 1,374,292 | $ | 1,218,509 | ||||||
21. | Earnings per Share |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net income | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||
Less: | ||||||||||||
Series A preferred stock undeclared dividends | (9,602 | ) | (11,745 | ) | (10,641 | ) | ||||||
Series B preferred stock undeclared dividends | (2,142 | ) | (2,619 | ) | (2,373 | ) | ||||||
Accretion of common stock put option | — | (308 | ) | — | ||||||||
Net income available to common stockholders | $ | 142,145 | $ | 51,125 | $ | 110,551 | ||||||
Weighted average common shares outstanding | 31,166,613 | 1,310,448 | 1,685,784 | |||||||||
Basic net income per common share | $ | 4.56 | $ | 39.01 | $ | 65.58 | ||||||
Pro forma basic income per common share (unaudited): | ||||||||||||
Numerator: | ||||||||||||
Net income | $ | 153,889 | ||||||||||
Interest expense reduction due to debt repayment | 5,555 | |||||||||||
Numerator for pro forma basic income per common share | $ | 159,444 | ||||||||||
Denominator: | ||||||||||||
Shares used above | 31,166,613 | |||||||||||
Pro forma adjustments to reflect assumed weighted average effect of: | ||||||||||||
Conversion of series A preferred stock | 53,654,795 | |||||||||||
Conversion of series B preferred stock | 10,318,354 | |||||||||||
Shares issued for preferred stock dividend | 1,774,743 | |||||||||||
Newly issued shares for IPO | 22,047,585 | |||||||||||
Denominator for pro forma basic income per common share | 118,962,090 | |||||||||||
Pro forma basic income per common share (unaudited) | $ | 1.34 | ||||||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net income | $ | 153,889 | $ | 65,797 | $ | 123,565 | ||||||
Less accretion of common stock put option | — | (308 | ) | — | ||||||||
Net income available to common stockholders | $ | 153,889 | $ | 65,489 | $ | 123,565 | ||||||
Weighted average common shares outstanding | 31,166,613 | 1,310,448 | 1,685,784 | |||||||||
Plus incremental shares from assumed conversions: | ||||||||||||
Series A preferred stock | 53,654,795 | 72,000,000 | 72,000,000 | |||||||||
Series B preferred stock | 10,318,354 | 13,846,320 | 13,846,320 | |||||||||
Stock options and restricted shares | 7,374,601 | 5,605,032 | 3,533,496 | |||||||||
Dilutive potential common shares | 102,514,363 | 92,761,800 | 91,065,600 | |||||||||
Diluted net income per common share | $ | 1.50 | $ | 0.71 | $ | 1.36 | ||||||
Pro forma diluted income per common share (unaudited): | ||||||||||||
Numerator: | ||||||||||||
Net income | $ | 153,889 | ||||||||||
Interest expense reduction due to debt repayment | 5,555 | |||||||||||
Numerator for pro forma diluted income per common share | $ | 159,444 | ||||||||||
Denominator: | ||||||||||||
Shares used above | 31,166,613 | |||||||||||
Pro forma adjustments to reflect assumed weighted average effect of: | ||||||||||||
Conversion of series A preferred stock | 53,654,795 | |||||||||||
Conversion of series B preferred stock | 10,318,354 | |||||||||||
Shares issued for preferred stock dividend | 1,774,743 | |||||||||||
Newly issued shares for IPO | 22,047,585 | |||||||||||
Stock options and restricted shares | 7,374,601 | |||||||||||
Denominator for pro forma diluted income per common share | 126,336,691 | |||||||||||
Pro forma diluted income per common share (unaudited) | $ | 1.26 | ||||||||||
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Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Number of common share options | 2,168,730 | 2,016,000 | 1,073,192 | |||||||||
Weighted average exercise price | $ | 21.09 | $ | 21.25 | $ | 21.25 |
22. | Other Consolidated Balance Sheet Information |
December 31, | ||||||||
2009 | 2008 | |||||||
Accrued expenses and other liabilities: | ||||||||
Accrued goods and services | $ | 45,044 | $ | 51,449 | ||||
Accrued payroll, bonuses, and employee benefits | 73,983 | 72,662 | ||||||
Medicaid, commercial rebates, and chargebacks | 30,771 | 16,544 | ||||||
Interest payable | 9,111 | 11,350 | ||||||
Other | 11,624 | 15,372 | ||||||
Total accrued expenses and other liabilities | $ | 170,533 | $ | 167,377 | ||||
23. | Cash Flow Supplemental Disclosures |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Interest, net of amounts capitalized(1) | $ | 55,131 | $ | 87,213 | $ | 97,369 | ||||||
Income taxes | $ | 56,849 | $ | 48,910 | $ | 12,027 |
(1) | Interest paid in the table above excludes payments related to our interest rate swap contracts, which amounted to $17.0 million and $9.2 million for the years ended December 31, 2009 and 2008, respectively. No amounts were paid related to our interest rate swap contracts during the year ended December 31, 2007. |
Years Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Changes in: | ||||||||||||
Accounts receivable | $ | 8,575 | $ | (26,894 | ) | $ | (9,175 | ) | ||||
Inventories | (57,452 | ) | (92,856 | ) | 26,756 | |||||||
Prepaid expenses and other assets | 7,987 | (15,823 | ) | 164 | ||||||||
Accounts payable | 16,143 | 16,594 | 12,095 | |||||||||
Interest payable | (2,239 | ) | (1,957 | ) | 11,830 | |||||||
Accrued expenses and other liabilities | 14,913 | 21,626 | 6,114 | |||||||||
Deferred margin | (36 | ) | (745 | ) | (9,805 | ) | ||||||
Total | $ | (12,109 | ) | $ | (100,055 | ) | $ | 37,979 | ||||
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24. | Subsequent Events |
25. | Selected Unaudited Quarterly Financial Data |
2009 Quarter Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
Net revenue | $ | 371,795 | $ | 375,570 | $ | 395,731 | $ | 390,113 | ||||||||
Cost of goods sold | 209,201 | 224,008 | 230,666 | 237,202 | ||||||||||||
Gross profit | 162,594 | 151,562 | 165,065 | 152,911 | ||||||||||||
Operating expenses | 88,963 | 81,023 | 95,655 | 95,511 | ||||||||||||
Operating income | 73,631 | 70,539 | 69,410 | 57,400 | ||||||||||||
Total other non-operating (expense) income, net | (21,256 | ) | 54,582 | (19,475 | ) | (55,934 | ) | |||||||||
Income before income taxes | 52,375 | 125,121 | 49,935 | 1,466 | ||||||||||||
Provision for income taxes | (18,940 | ) | (41,849 | ) | (14,125 | ) | (94 | ) | ||||||||
Net income | $ | 33,435 | $ | 83,272 | $ | 35,810 | $ | 1,372 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 25.09 | $ | 47.42 | $ | 12.01 | $ | 0.01 | ||||||||
Diluted | $ | 0.36 | $ | 0.89 | $ | 0.38 | $ | 0.01 |
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2008 Quarter Ended | ||||||||||||||||
March 31 | June 30 | September 30 | December 31 | |||||||||||||
Net revenue | $ | 305,203 | $ | 317,185 | $ | 350,492 | $ | 401,412 | ||||||||
Cost of goods sold | 206,720 | 209,785 | 211,856 | 253,796 | ||||||||||||
Gross profit | 98,483 | 107,400 | 138,636 | 147,616 | ||||||||||||
Operating expenses | 57,607 | 68,005 | 81,650 | 86,268 | ||||||||||||
Operating income | 40,876 | 39,395 | 56,986 | 61,348 | ||||||||||||
Total other non-operating expense, net | (24,586 | ) | (23,509 | ) | (24,285 | ) | (23,834 | ) | ||||||||
Income before income taxes | 16,290 | 15,886 | 32,701 | 37,514 | ||||||||||||
Provision for income taxes | (6,725 | ) | (6,412 | ) | (12,147 | ) | (11,310 | ) | ||||||||
Net income | $ | 9,565 | $ | 9,474 | $ | 20,554 | $ | 26,204 | ||||||||
Earnings per share: | ||||||||||||||||
Basic | $ | 3.35 | $ | 4.94 | $ | 14.65 | $ | 19.40 | ||||||||
Diluted | $ | 0.10 | $ | 0.10 | $ | 0.22 | $ | 0.28 |
26. | Condensed Consolidating Financial Information |
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 58,320 | $ | 6,919 | $ | — | $ | 65,239 | ||||||||||
Accounts receivable, net | — | 222,007 | 64,454 | (149,483 | ) | 136,978 | ||||||||||||||
Inventories | — | 605,324 | 38,730 | — | 644,054 | |||||||||||||||
Other | — | 117,670 | 2,448 | — | 120,118 | |||||||||||||||
Total current assets | — | 1,003,321 | 112,551 | (149,483 | ) | 966,389 | ||||||||||||||
Property, plant, and equipment, net | — | 266,067 | 1,132 | — | 267,199 | |||||||||||||||
Intangible assets, net | — | 10,880 | — | — | 10,880 | |||||||||||||||
Goodwill | — | 172,860 | — | — | 172,860 | |||||||||||||||
Investment in subsidiaries | 680,459 | (27,925 | ) | — | (652,534 | ) | — | |||||||||||||
Advances and notes between Parent and Subsidiaries | 1,346,520 | 862,406 | — | (2,208,926 | ) | — | ||||||||||||||
Other | — | 27,054 | 623 | — | 27,677 | |||||||||||||||
Total assets | $ | 2,026,979 | $ | 2,314,663 | $ | 114,306 | $ | (3,010,943 | ) | $ | 1,445,005 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT): | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 103,460 | $ | 117,069 | $ | (149,483 | ) | $ | 71,046 | |||||||||
Accrued expenses and other liabilities | — | 160,047 | 10,486 | — | 170,533 | |||||||||||||||
Current portion of capital lease obligations | — | 740 | — | — | 740 | |||||||||||||||
Total current liabilities | — | 264,247 | 127,555 | (149,483 | ) | 242,319 | ||||||||||||||
Long-term debt and capital lease obligations | 596,046 | 9,221 | — | — | 605,267 | |||||||||||||||
Advances and notes between Parent and Subsidiaries | 848,779 | 1,346,515 | 13,632 | (2,208,926 | ) | — | ||||||||||||||
Other | — | 14,221 | 1,044 | — | 15,265 | |||||||||||||||
Total liabilities | 1,444,825 | 1,634,204 | 142,231 | (2,358,409 | ) | 862,851 | ||||||||||||||
Stockholders’ equity (deficit) | 582,154 | 680,459 | (27,925 | ) | (652,534 | ) | 582,154 | |||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | 2,026,979 | $ | 2,314,663 | $ | 114,306 | $ | (3,010,943 | ) | $ | 1,445,005 | |||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
ASSETS: | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | — | $ | 10,727 | $ | 6,252 | $ | — | $ | 16,979 | ||||||||||
Accounts receivable, net | — | 214,212 | 54,237 | (120,032 | ) | 148,417 | ||||||||||||||
Inventories | — | 545,897 | 35,823 | — | 581,720 | |||||||||||||||
Other | — | 119,589 | 550 | — | 120,139 | |||||||||||||||
Total current assets | — | 890,425 | 96,862 | (120,032 | ) | 867,255 | ||||||||||||||
Property, plant, and equipment, net | — | 212,521 | 730 | — | 213,251 | |||||||||||||||
Intangible assets, net | — | 7,204 | — | — | 7,204 | |||||||||||||||
Goodwill | — | 135,800 | — | — | 135,800 | |||||||||||||||
Investment in subsidiaries | 561,816 | (20,938 | ) | — | (540,878 | ) | — | |||||||||||||
Advances and notes between Parent and Subsidiaries | 169,543 | 915,991 | — | (1,085,534 | ) | — | ||||||||||||||
Other | — | 83,685 | 204 | — | 83,889 | |||||||||||||||
Total assets | $ | 731,359 | $ | 2,224,688 | $ | 97,796 | $ | (1,746,444 | ) | $ | 1,307,399 | |||||||||
LIABILITIES, OBLIGATIONS UNDER COMMON STOCK PUT/CALL OPTION, REDEEMABLE PREFERRED STOCK, AND STOCKHOLDERS’ (DEFICIT) EQUITY: | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Accounts payable | $ | — | $ | 76,715 | $ | 98,220 | $ | (120,032 | ) | $ | 54,903 | |||||||||
Accrued expenses and other liabilities | 2,007 | 156,237 | 9,133 | — | 167,377 | |||||||||||||||
Current portion of capital lease obligations | — | 7,341 | — | — | 7,341 | |||||||||||||||
Total current liabilities | 2,007 | 240,293 | 107,353 | (120,032 | ) | 229,621 | ||||||||||||||
Long-term debt and capital lease obligations | — | 1,194,205 | — | — | 1,194,205 | |||||||||||||||
Advances and notes between Parent and Subsidiaries | 906,123 | 169,543 | 9,868 | (1,085,534 | ) | — | ||||||||||||||
Other | — | 58,831 | 1,513 | — | 60,344 | |||||||||||||||
Total liabilities | 908,130 | 1,662,872 | 118,734 | (1,205,566 | ) | 1,484,170 | ||||||||||||||
Obligations under common stock put/call option | 29,419 | — | — | — | 29,419 | |||||||||||||||
Redeemable preferred stock | 110,535 | — | — | — | 110,535 | |||||||||||||||
Stockholders’ (deficit) equity | (316,725 | ) | 561,816 | (20,938 | ) | (540,878 | ) | (316,725 | ) | |||||||||||
Total liabilities and stockholders’ (deficit) equity | $ | 731,359 | $ | 2,224,688 | $ | 97,796 | $ | (1,746,444 | ) | $ | 1,307,399 | |||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Net revenue | $ | — | $ | 1,389,172 | $ | 144,037 | $ | — | $ | 1,533,209 | ||||||||||
Cost of goods sold | — | 784,635 | 116,442 | — | 901,077 | |||||||||||||||
Gross profit | — | 604,537 | 27,595 | — | 632,132 | |||||||||||||||
Operating expenses | 5,715 | 321,525 | 33,912 | — | 361,152 | |||||||||||||||
(Loss) income from operations | (5,715 | ) | 283,012 | (6,317 | ) | — | 270,980 | |||||||||||||
Equity in earnings (losses) of Subsidiaries | 108,854 | (7,466 | ) | — | (101,388 | ) | — | |||||||||||||
Other non-operating income (expense) | 75,000 | (117,106 | ) | 23 | — | (42,083 | ) | |||||||||||||
Income (loss) before income taxes | 178,139 | 158,440 | (6,294 | ) | (101,388 | ) | 228,897 | |||||||||||||
Provision for income taxes | (24,250 | ) | (49,586 | ) | (1,172 | ) | — | (75,008 | ) | |||||||||||
Net income (loss) | $ | 153,889 | $ | 108,854 | $ | (7,466 | ) | $ | (101,388 | ) | $ | 153,889 | ||||||||
Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Net revenue | $ | — | $ | 1,232,366 | $ | 141,926 | $ | — | $ | 1,374,292 | ||||||||||
Cost of goods sold | — | 764,952 | 117,205 | — | 882,157 | |||||||||||||||
Gross profit | — | 467,414 | 24,721 | — | 492,135 | |||||||||||||||
Operating expenses | 6,871 | 257,281 | 29,378 | — | 293,530 | |||||||||||||||
(Loss) income from operations | (6,871 | ) | 210,133 | (4,657 | ) | — | 198,605 | |||||||||||||
Equity in earnings (losses) of Subsidiaries | 70,263 | (5,590 | ) | — | (64,673 | ) | — | |||||||||||||
Other non-operating (expense) income | — | (96,832 | ) | 618 | — | (96,214 | ) | |||||||||||||
Income (loss) before income taxes | 63,392 | 107,711 | (4,039 | ) | (64,673 | ) | 102,391 | |||||||||||||
Benefit (provision) for income taxes | 2,405 | (37,448 | ) | (1,551 | ) | — | (36,594 | ) | ||||||||||||
Net income (loss) | $ | 65,797 | $ | 70,263 | $ | (5,590 | ) | $ | (64,673 | ) | $ | 65,797 | ||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Net revenue | $ | — | $ | 1,103,797 | $ | 114,712 | $ | — | $ | 1,218,509 | ||||||||||
Cost of goods sold | — | 694,449 | 93,703 | — | 788,152 | |||||||||||||||
Gross profit | — | 409,348 | 21,009 | — | 430,357 | |||||||||||||||
Operating expenses | 6,097 | 217,300 | 27,326 | — | 250,723 | |||||||||||||||
(Loss) income from operations | (6,097 | ) | 192,048 | (6,317 | ) | — | 179,634 | |||||||||||||
Equity in earnings (losses) of Subsidiaries | 127,528 | (7,109 | ) | — | (120,419 | ) | — | |||||||||||||
Other non-operating (expense) income | — | (97,990 | ) | 1,127 | — | (96,863 | ) | |||||||||||||
Income (loss) before income taxes | 121,431 | 86,949 | (5,190 | ) | (120,419 | ) | 82,771 | |||||||||||||
Benefit (provision) for income taxes | 2,134 | 40,579 | (1,919 | ) | — | 40,794 | ||||||||||||||
Net income (loss) | $ | 123,565 | $ | 127,528 | $ | (7,109 | ) | $ | (120,419 | ) | $ | 123,565 | ||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 153,889 | $ | 108,854 | $ | (7,466 | ) | $ | (101,388 | ) | $ | 153,889 | ||||||||
Undistributed equity in (earnings) losses of Subsidiaries | (108,854 | ) | 7,466 | — | 101,388 | — | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities | (2,007 | ) | 63,891 | 4,759 | 13,623 | 80,266 | ||||||||||||||
Net cash provided by (used in) operating activities | 43,028 | 180,211 | (2,707 | ) | 13,623 | 234,155 | ||||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property, plant, and equipment | — | (74,576 | ) | (587 | ) | — | (75,163 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | (30,431 | ) | — | — | (30,431 | ) | |||||||||||||
Net advances and notes between Parent and Subsidiaries | (1,172,950 | ) | — | — | 1,172,950 | — | ||||||||||||||
Other | — | (2,788 | ) | 3,764 | — | 976 | ||||||||||||||
Net cash (used in) provided by investing activities | (1,172,950 | ) | (107,795 | ) | 3,177 | 1,172,950 | (104,618 | ) | ||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net repayments of borrowings | — | (1,196,515 | ) | — | — | (1,196,515 | ) | |||||||||||||
Issuance of 7.75% Notes, net of discount | 595,926 | — | — | — | 595,926 | |||||||||||||||
Proceeds from initial public offering, net of issuance costs | 517,192 | — | — | — | 517,192 | |||||||||||||||
Net advances and notes between Parent and Subsidiaries | — | 1,186,573 | — | (1,186,573 | ) | — | ||||||||||||||
Other | 16,804 | (14,879 | ) | — | — | 1,925 | ||||||||||||||
Net cash provided by (used in) financing activities | 1,129,922 | (24,821 | ) | — | (1,186,573 | ) | (81,472 | ) | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 195 | — | 195 | |||||||||||||||
Net increase in cash and cash equivalents | — | 47,595 | 665 | — | 48,260 | |||||||||||||||
Cash and cash equivalents at beginning of year | — | 10,726 | 6,253 | — | 16,979 | |||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 58,321 | $ | 6,918 | $ | — | $ | 65,239 | ||||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | |||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 65,797 | $ | 70,263 | $ | (5,590 | ) | $ | (64,673 | ) | $ | 65,797 | ||||||||
Undistributed equity in (earnings) losses of subsidiaries | (70,263 | ) | 5,590 | — | 64,673 | — | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities | 424 | 14,776 | (63,115 | ) | 15,132 | (32,783 | ) | |||||||||||||
Net cash provided by (used in) operating activities | (4,042 | ) | 90,629 | (68,705 | ) | 15,132 | 33,014 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property, plant, and equipment | — | (86,051 | ) | (161 | ) | — | (86,212 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | (10,272 | ) | — | — | (10,272 | ) | |||||||||||||
Net advances and notes between Parent and Subsidiaries | 40,160 | — | — | (40,160 | ) | — | ||||||||||||||
Other | — | (15,455 | ) | — | — | (15,455 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 40,160 | (111,778 | ) | (161 | ) | (40,160 | ) | (111,939 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net borrowings | — | 58,712 | — | — | 58,712 | |||||||||||||||
Net advances and notes between Parent and Subsidiaries | — | (34,896 | ) | 9,868 | 25,028 | — | ||||||||||||||
Other | (36,118 | ) | — | — | — | (36,118 | ) | |||||||||||||
Net cash (used in) provided by financing activities | (36,118 | ) | 23,816 | 9,868 | 25,028 | 22,594 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | 91 | (248 | ) | — | (157 | ) | |||||||||||||
Net increase (decrease) in cash and cash equivalents | — | 2,758 | (59,246 | ) | — | (56,488 | ) | |||||||||||||
Cash and cash equivalents at beginning of year | — | 7,968 | 65,499 | — | 73,467 | |||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 10,726 | $ | 6,253 | $ | — | $ | 16,979 | ||||||||||
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Parent/ | Guarantor | Non-Guarantor | Consolidating | Total | ||||||||||||||||
Issuer | Subsidiaries | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
Cash flows from operating activities: | ||||||||||||||||||||
Net income (loss) | $ | 123,565 | $ | 127,528 | $ | (7,109 | ) | $ | (120,419 | ) | $ | 123,565 | ||||||||
Undistributed equity in (earnings) losses of Subsidiaries | (127,528 | ) | 7,109 | — | 120,419 | — | ||||||||||||||
Adjustments to reconcile net income (loss) to net cash flows (used in) provided by operating activities | 208 | (136,830 | ) | 69,548 | 70,640 | 3,566 | ||||||||||||||
Net cash (used in) provided by operating activities | (3,755 | ) | (2,193 | ) | 62,439 | 70,640 | 127,131 | |||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||
Purchases of property, plant, and equipment | — | (65,515 | ) | (318 | ) | — | (65,833 | ) | ||||||||||||
Business acquisitions, net of cash acquired | — | (17,456 | ) | — | — | (17,456 | ) | |||||||||||||
Net advances and notes between Parent and Subsidiaries | 3,755 | — | — | (3,755 | ) | — | ||||||||||||||
Other | — | (7,356 | ) | — | — | (7,356 | ) | |||||||||||||
Net cash provided by (used in) investing activities | 3,755 | (90,327 | ) | (318 | ) | (3,755 | ) | (90,645 | ) | |||||||||||
Cash flows from financing activities: | ||||||||||||||||||||
Net borrowings | — | 26,094 | — | — | 26,094 | |||||||||||||||
Net advances and notes between Parent and Subsidiaries | — | 66,885 | — | (66,885 | ) | — | ||||||||||||||
Other | — | (217 | ) | — | — | (217 | ) | |||||||||||||
Net cash provided by (used in) financing activities | — | 92,762 | — | (66,885 | ) | 25,877 | ||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | (91 | ) | 153 | — | 62 | ||||||||||||||
Net increase in cash and cash equivalents | — | 151 | 62,274 | — | 62,425 | |||||||||||||||
Cash and cash equivalents at beginning of year | — | 7,817 | 3,225 | — | 11,042 | |||||||||||||||
Cash and cash equivalents at end of year | $ | — | $ | 7,968 | $ | 65,499 | $ | — | $ | 73,467 | ||||||||||
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Years Ended December 31, 2009, 2008, and 2007
(in thousands)
Balance at | Charges to | Charges to | Balance at | |||||||||||||||||
Beginning of | Costs and | Other | End of | |||||||||||||||||
Period | Expenses | Accounts | Deductions | Period | ||||||||||||||||
Reserve for doubtful accounts receivable: | ||||||||||||||||||||
Year ended December 31, 2009 | $ | 2,020 | $ | 2,858 | $ | — | $ | (1,417 | )(1) | $ | 3,461 | |||||||||
Year ended December 31, 2008 | $ | 2,631 | $ | 728 | $ | — | $ | (1,339 | )(1) | $ | 2,020 | |||||||||
Year ended December 31, 2007 | $ | 4,690 | $ | 525 | $ | — | $ | (2,584 | )(1) | $ | 2,631 | |||||||||
Reserve for doubtful notes receivable and other advances: | ||||||||||||||||||||
Year ended December 31, 2009 | $ | 4,250 | $ | — | $ | — | $ | — | $ | 4,250 | ||||||||||
Year ended December 31, 2008 | $ | — | $ | 4,250(4 | ) | $ | — | $ | — | $ | 4,250 | |||||||||
Year ended December 31, 2007 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Inventory reserves: | ||||||||||||||||||||
Year ended December 31, 2009 | $ | 49,766 | $ | 21,758 | $ | — | $ | (27,147 | )(2) | $ | 44,377 | |||||||||
Year ended December 31, 2008 | $ | 47,534 | $ | 36,840 | $ | — | $ | (34,608 | )(2) | $ | 49,766 | |||||||||
Year ended December 31, 2007 | $ | 43,381 | $ | 39,043 | $ | — | $ | (34,890 | )(2) | $ | 47,534 | |||||||||
Deferred tax asset valuation allowance: | ||||||||||||||||||||
Year ended December 31, 2009 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Year ended December 31, 2008 | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Year ended December 31, 2007 | $ | 60,157 | $ | — | $ | — | $ | (60,157 | )(3) | $ | — |
(1) | Includes write-offs of uncollectible accounts receivable and the effects of foreign exchange. | |
(2) | Includes the net of write-offs, reversals of reserved inventory that was sold or recoverable for other purposes such as testing, and the effects of foreign exchange. | |
(3) | Includes $55.8 million attributable to the reversal of the valuation allowance as a 2007 non-cash income tax benefit, and $4.4 million due to the impact of the adoption of new accounting guidance related to uncertainties in income taxes. | |
(4) | Includes a provision for $3.2 million related to notes receivables and $1.0 million related to advances for unlicensed plasma from a then existing third party supplier due to uncertainty regarding collection. |
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A-A1
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Page | ||||||
ARTICLE I | THE REINCORPORATION MERGER | A-8 | ||||
Section 1.01 | The Reincorporation Merger | A-8 | ||||
Section 1.02 | Closing | A-8 | ||||
Section 1.03 | Reincorporation Effective Time | A-8 | ||||
Section 1.04 | Effects of the Reincorporation Merger | A-8 | ||||
Section 1.05 | Effect on Capital Stock | A-8 | ||||
Section 1.06 | Options | A-9 | ||||
Section 1.07 | Other Stock-Based Awards | A-9 | ||||
Section 1.08 | Further Actions | A-9 | ||||
Section 1.09 | Articles of Incorporation and Bylaws | A-10 | ||||
Section 1.10 | Directors of the Reincorporation Merger Surviving Corporation | A-10 | ||||
Section 1.11 | Officers of the Reincorporation Merger Surviving Corporation | A-10 | ||||
Section 1.12 | Tax Consequences | A-10 | ||||
ARTICLE II | THE MERGER | A-10 | ||||
Section 2.01 | The Merger | A-10 | ||||
Section 2.02 | Effective Time | A-10 | ||||
Section 2.03 | Effects of the Merger | A-10 | ||||
Section 2.04 | Articles of Incorporation and Bylaws | A-11 | ||||
Section 2.05 | Directors of the Surviving Corporation | A-11 | ||||
Section 2.06 | Officers of the Surviving Corporation | A-11 | ||||
ARTICLE III | EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES | A-11 | ||||
Section 3.01 | Effect on Capital Stock | A-11 | ||||
Section 3.02 | Exchange of Certificates | A-12 | ||||
ARTICLE IV | REPRESENTATIONS AND WARRANTIES | A-15 | ||||
Section 4.01 | Representations and Warranties of the Company | A-15 | ||||
Section 4.02 | Representations and Warranties of Parent and HoldCo | A-34 | ||||
ARTICLE V | COVENANTS RELATING TO THE BUSINESS | A-43 | ||||
Section 5.01 | Conduct of Business | A-43 | ||||
Section 5.02 | No Solicitation | A-47 | ||||
ARTICLE VI | ADDITIONAL AGREEMENTS | A-49 | ||||
Section 6.01 | Preparation of the Proxy Statement/Prospectus; Stockholders’ Meetings | A-49 | ||||
Section 6.02 | Creation and Issuance of Parent Non-Voting Shares | A-51 | ||||
Section 6.03 | Access to Information; Confidentiality | A-54 | ||||
Section 6.04 | Efforts; Further Action | A-55 | ||||
Section 6.05 | Company Equity Awards | A-57 | ||||
Section 6.06 | Certain Indebtedness | A-58 | ||||
Section 6.07 | Indemnification, Exculpation and Insurance | A-59 | ||||
Section 6.08 | Public Announcements | A-60 | ||||
Section 6.09 | Section 16 Matters | A-60 | ||||
Section 6.10 | Stock Exchange Listing | A-61 |
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Section 6.11 | Transaction Litigation | A-61 | ||||
Section 6.12 | Employee Matters | A-61 | ||||
Section 6.13 | Takeover Laws | A-62 | ||||
Section 6.14 | Financing | A-62 | ||||
Section 6.15 | Certain Tax Matters | A-64 | ||||
Section 6.16 | Company Cooperation on Certain Matters | A-64 | ||||
Section 6.17 | Control of Operations | A-64 | ||||
Section 6.18 | Formation and Joinder of Company Virginia Sub | A-65 | ||||
ARTICLE VII | CONDITIONS PRECEDENT | A-65 | ||||
Section 7.01 | Conditions to Each Party’s Obligation to Effect the Merger | A-65 | ||||
Section 7.02 | Conditions to Obligations of Parent and HoldCo | A-65 | ||||
Section 7.03 | Conditions to Obligation of the Company | A-66 | ||||
ARTICLE VIII | TERMINATION, AMENDMENT AND WAIVER | A-67 | ||||
Section 8.01 | Termination | A-67 | ||||
Section 8.02 | Effect of Termination | A-68 | ||||
Section 8.03 | Fees and Expenses | A-69 | ||||
Section 8.04 | Amendment | A-71 | ||||
Section 8.05 | Extension; Waiver | A-71 | ||||
ARTICLE IX | GENERAL PROVISIONS | A-71 | ||||
Section 9.01 | Nonsurvival of Representations and Warranties | A-71 | ||||
Section 9.02 | Notices | A-71 | ||||
Section 9.03 | Definitions | A-72 | ||||
Section 9.04 | Interpretation | A-77 | ||||
Section 9.05 | Consents and Approvals | A-78 | ||||
Section 9.06 | Counterparts | A-78 | ||||
Section 9.07 | Entire Agreement; No Third-Party Beneficiaries | A-78 | ||||
Section 9.08 | Governing Law | A-78 | ||||
Section 9.09 | Assignment | A-78 | ||||
Section 9.10 | Jurisdiction; Consent to Jurisdiction; Specific Enforcement; Remedies | A-79 | ||||
Section 9.11 | Severability | A-82 | ||||
Section 9.12 | Transfer Taxes | A-82 | ||||
Section 9.13 | Obligations of Parent and of the Company | A-82 | ||||
Exhibit A | Form of Company Voting Agreement | |||||
Exhibit B | Form of Parent Voting Agreement | |||||
Exhibit C | Form of Reincorporation Plan of Merger | |||||
Exhibit D | Form of Company Virginia Sub Articles | |||||
Exhibit E | Form of Plan of Merger | |||||
Exhibit F | Form of Parent By-Law Amendments |
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$ | 96 | |||
8-A12(b) | 65 | |||
Actions | 20 | |||
Affiliate | 96 | |||
Agreement | 1 | |||
Antitrust Approval Failure | 96 | |||
Antitrust Covenants | 96 | |||
Antitrust Law | 73 | |||
Approval | 24 | |||
Bankruptcy and Equity Exception | 16 | |||
BBVA | 53 | |||
Business Day | 97 | |||
Capital Increase | 67 | |||
Certificate of Merger | 6 | |||
Chancery Court | 105 | |||
Closing | 2 | |||
Closing Date | 2 | |||
CNMV | 97 | |||
Commercial Registry | 69 | |||
Commitment Letter | 52 | |||
Committee | 103 | |||
Common Stock Cash Consideration | 7 | |||
Common Stock Merger Consideration | 7 | |||
Common Stock Share Consideration | 7 | |||
Company | 1 | |||
Company Adverse Recommendation Change | 97 | |||
Company Approvals | 17 | |||
Company Balance Sheet | 18 | |||
Company Benefit Plan | 30 | |||
Company Bylaws | 5 | |||
Company Certificate | 13 | |||
Company Common Book-Entry Shares | 3 | |||
Company Common Certificate | 3 | |||
Company Common Stock | 3 | |||
Company Disclosure Letter | 13 | |||
Company Intellectual Property | 36 | |||
Company Pension Plan | 30 | |||
Company Personnel | 97 | |||
Company Preferred Stock | 14 | |||
Company Recommendation | 16 | |||
Company Restricted Stock | 3 | |||
Company RSUs | 14 | |||
Company SEC Documents | 17 | |||
Company Stock Options | 4 | |||
Company Stock Plans | 4 | |||
Company Stock-Based Award | 4 | |||
Company Stockholder Approval | 38 | |||
Company Stockholder Party | 1 | |||
Company Stockholders’ Meeting | 64 | |||
Company Termination Fee | 91 | |||
Company Virginia Sub | 1 | |||
Company Virginia Sub Articles | 5 | |||
Company Virginia Sub Book-Entry Shares | 4 | |||
Company Virginia Sub Bylaws | 5 | |||
Company Virginia Sub Certificates | 4 | |||
Company Virginia Sub Common Stock | 3 | |||
Company Voting Agreement | 1 | |||
Company Welfare Plan | 30 | |||
Confidentiality Agreement | 72 | |||
Continuing Employees | 80 | |||
Contract | 16 | |||
Convicted Entity | 26 | |||
Convicted Individual | 26 | |||
Covered Claim | 105 | |||
Debarred Entity | 26 | |||
Debarred Individual | 26 | |||
Deed of By-Law Amendments | 69 | |||
Deed of Capital Increase | 70 | |||
Defeasance | 76 | |||
Definitive Agreements | 82 | |||
Depositary | 8 | |||
Depositary Agreement | 8 | |||
DGCL | 1 | |||
DOJ | 72 | |||
dollars | 96 | |||
Effect | 98 | |||
Effective Time | 6 | |||
Environmental Laws | 97 | |||
ERISA | 30 | |||
ERISA Affiliate | 97 | |||
EU-IFRS | 97 | |||
Exchange Act | 17 | |||
Exchange Agent | 8 | |||
Exchange Fund | 8 | |||
Exchange Ratio | 97 | |||
Excluded Entity | 26 |
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Excluded Individual | 26 | |||
FDA | 97 | |||
Filed Company SEC Documents | 18 | |||
Financing | 52 | |||
Financing Commitment Expiration Date | 89 | |||
Financing Covenants | 97 | |||
Financing Failure | 97 | |||
Financing Sources | 97 | |||
Foreign Antitrust Laws | 73 | |||
Foreign Company Plan | 32 | |||
Foreign Corrupt Practices Act | 25 | |||
Form By-Law Amendment | 68 | |||
Form F-4 | 65 | |||
Form F-6 | 65 | |||
FTC | 72 | |||
GAAP | 18 | |||
Governmental Entity | 12 | |||
GSA | 26 | |||
Hazardous Materials | 98 | |||
Health Care Laws | 98 | |||
Health Fraud Law | 27 | |||
HoldCo | 1 | |||
HoldCo Charter Documents | 41 | |||
HSR Act | 17 | |||
Indenture | 76 | |||
Intellectual Property | 98 | |||
Intervening Event | 98 | |||
IRS | 30 | |||
Joinder | 1 | |||
Knowledge | 98 | |||
Law | 16 | |||
Leased Real Property | 35 | |||
Leases | 35 | |||
Liens | 14 | |||
Material Adverse Effect | 98 | |||
Medicaid | 26 | |||
Medical Reimbursement Program | 26 | |||
Medicare | 26 | |||
Merger | 1 | |||
Mergers | 1 | |||
NASDAQ | 17 | |||
Nomura | 53 | |||
Non-Superior Proposal Event | 62 | |||
Notes | 76 | |||
Officer Indemnified Parties | 78 | |||
Option | 4 | |||
Order | 17 | |||
Other Delaware Court | 105 | |||
Outside Date | 88 | |||
Owned Real Property | 35 | |||
Spanish Stock Exchanges | 103 | |||
Parent | 1 | |||
Parent ADRs | 7 | |||
Parent ADS Issuance | 53 | |||
Parent ADSs | 7 | |||
Parent Adverse Recommendation Change | 68 | |||
Parent Alternative Proposal | 63 | |||
Parent Approvals | 44 | |||
Parent Board Reports | 67 | |||
Parent Charter Documents | 41 | |||
Parent Closing Price | 100 | |||
Parent CNMV Reports | 44 | |||
Parent Disclosure Letter | 41 | |||
Parent Equity Securities | 42 | |||
Parent Financial Statements | 45 | |||
Parent Material Adverse Effect | 100 | |||
Parent Non-Voting Shares | 7 | |||
Parent Ordinary Shares | 101 | |||
Parent Personnel | 101 | |||
Parent Recommendation | 43 | |||
Parent Specified Contract | 50 | |||
Parent Statutory Reports | 67 | |||
Parent Stockholder Approval | 68 | |||
Parent Stockholder Parties | 2 | |||
Parent Stockholder Party | 2 | |||
Parent Stockholders’ Meeting | 43 | |||
Parent Termination Fee | 92 | |||
Parent Voting Agreements | 2 | |||
Per Share Amount | 101 | |||
Permits | 23 | |||
Permitted Liens | 101 | |||
Permitted Modifications | 68 | |||
Person | 102 | |||
Plan of Merger | 5 | |||
Proxy Statement/Prospectus | 64 | |||
Qualifying Financing | 82 | |||
Real Property | 35 | |||
Registration Statement | 102 |
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Registration Statements | 102 | |||
Reincorporation Effective Time | 3 | |||
Reincorporation Merger | 1 | |||
Reincorporation Merger Surviving Corporation | 1 | |||
Reincorporation Plan of Merger | 3 | |||
Release | 102 | |||
Representative | 102 | |||
Required Amounts | 53 | |||
Restraint | 86 | |||
ReverseBreak-Up Fee | 92 | |||
Revolving Credit Agreement | 102 | |||
SCL | 67 | |||
SEC | 17 | |||
Securities Act | 17 | |||
Self-Regulatory Organization | 102 | |||
Service Agent | 106 | |||
SIBE | 102 | |||
Significant Subsidiary | 13 | |||
SOX | 19 | |||
Spanish Prospectus | 69 | |||
Specified Contract | 21 | |||
Specified Financial Resources | 103 | |||
Stock-Based Award | 4 | |||
Subsidiary | 103 | |||
Superior Proposal | 61 | |||
Surviving Corporation | 5 | |||
Takeover Proposal | 61 | |||
Tax | 35 | |||
Tax Return | 35 | |||
Taxing Authority | 35 | |||
Tender | 76 | |||
Termination Fees | 103 | |||
Voting Agreement Percentage Change | 103 | |||
Voting Agreements | 2 | |||
VSCA | 1 | |||
VWAPs | 100 | |||
WARN | 29 |
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Attention: | Tomás Dagá |
Attention: | John F. Gaither, Jr. |
Attention: | Juan Miguel Goenechea |
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By: | /s/ Victor Grifols Name: Victor Grifols |
Title: | President and Chief Executive Officer |
By: | /s/ David Bell Name: David Bell |
Title: | Vice President — Corporate Operations |
By: | /s/ Lawrence D. Stern Name: Lawrence D. Stern |
Title: | Chairman and Chief Executive Officer |
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TO THE
AGREEMENT AND PLAN OF MERGER
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By: | /s/ Victor Grifols |
By: | /s/ David Bell |
By: | /s/ Lawrence D. Stern |
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Talecris Biotherapeutics Holdings Corp.
June 6, 2010
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VOTING AGREEMENT | CONTRATO DE COMPROMISOS RELATIVOS AL VOTO | |
In New York, on 6 June 2010, | En Nueva York, a 6 de junio de 2010, | |
PARTIES | LAS PARTES | |
I. TALECRIS BIOTHERAPEUTICS HOLDINGS CORP.(“Talecris”), a Delaware company, with registered address at 1209 Orange Street, New Castle County, Wilmington, Delaware 19801, United States of América; and | I. TALECRIS BIOTHERAPEUTICS HOLDINGS CORP.(“Talecris”), una sociedad de Delaware, con domicilio social en 1209 Orange Street, New Castle County, Wilmington, Delaware 19801, Estados Unidos de América; y | |
II. The person identified in Annex 1 (the “Shareholder”). | II. La persona identificada en el Anexo 1 (el“Accionista”). | |
Talecris and the Shareholder shall be hereinafter referred to, jointly, as the“Parties” and, each of them, as a“Party”. | Talecris y el Accionista serán referidos, conjuntamente, como las“Partes” y cada uno de ellos como una“Parte”. | |
WHEREAS | EXPONEN | |
I. Talecris and GRIFOLS, S.A.(“Grifols”), a Spanish company, with registered address at Jesús y María, 6, 08022, Barcelona, and Spanish tax identification numberA-58389123, have on this date entered into an agreement (the“Transaction Agreement”) by virtue of which, subject to the satisfaction of certain conditions precedent, (A) Grifols shall acquire through a merger of Talecris with GRIFOLS, INC.(“Grifols US”) the total ordinary share capital of Talecris and, in exchange, (B) Grifols shall deliver to the holders of shares in Talecris (i) newly-issued non-voting shares in Grifols (the“Grifols Non-Voting Shares”) and (ii) a cash consideration (the foregoing transactions, with the terms set forth for them in the Transaction Agreement, the“Transaction”); | I. Que Talecris y GRIFOLS, S.A.(“Grifols”), una sociedad española, con domicilio social en Jesús y María, 6, 08022, Barcelona, y número de identificación fiscal español A-58389123, han suscrito en esta fecha un contrato (el“Contrato de Compraventa”) en virtud del cual, una vez se cumplan determinadas condiciones suspensivas, (A) Grifols adquirirá a través de la fusión de Talecris con GRIFOLS, INC.(“Grifols US”) la totalidad del capital social ordinario de Talecris y, como contraprestación, (B) Grifols transmitirá a los titulares de las acciones de Talecris (i) acciones sin voto de nueva emisión de Grifols (las“Acciones Sin Voto de Grifols”) y (ii) una contraprestación dineraria (las anteriores operaciones, con los términos que para ellas se establecen en el Contrato de Compraventa, la“Operación”); | |
II. The issuance and delivery of the Grifols Non-Voting Shares forming part of the Transaction will require,inter alia: (A) the amendment of Article 6 of the Bylaws (estatutos sociales) of Grifols and the inclusion of a new Article 6 bis in the Bylaws (estatutos sociales) of Grifols (all in the terms set forth in Annex 2) to provide for the issuance and the terms of the Grifols Non-Voting Shares (together with the adoption of those other resolutions, other than the Capital Increase required to be passed by the general shareholders meeting of Grifols under the Transaction Agreement, the“Bylaws Amendment”) and (B) the approval of a capital increase in Grifols through the issuance of Grifols Non-Voting Shares pursuant to Article 153.1.a) of the Spanish Public Companies Law (Ley de Sociedades Anónimas)(“LSA”) against a contribution as established in the Transaction Agreement, and the listing (i) of the Non-Voting Shares issued in the capital increase in the Spanish Stock Exchanges and the Spanish Automated Quotation System (Sistema de Interconexión Bursátil Español) and (ii) of the American Depositary Shares representing the Non-Voting Shares issued in the capital increase on the NASDAQ Stock Market (the“Capital Increase”); | II. Que la emisión y entrega de las Acciones Sin Voto de Grifols que forma parte de la Operación requerirá, entre otras cosas: (A) la modificación del artículo 6 de los estatutos sociales de Grifols y la introducción de un nuevo artículo 6 bis en los estatutos sociales de Grifols (todo ello en los términos señalados en el Anexo 2) para prever la emisión de las Acciones Sin Voto de Grifols y establecer los términos de éstas (junto con los otros acuerdos sociales distintos del Aumento de Capital que deben adoptarse por la junta general de accionistas de Grifols conforme al Contrato de Compraventa, la“Modificación Estatutaria”) y (B) que se acuerde el aumento de capital de Grifols mediante la emisión de Acciones Sin Voto de Grifols conforme al artículo 153.1.a) de la Ley de Sociedades Anónimas(“LSA”) con una contraprestación según lo establecido en el Contrato de Compraventa, así como la admisión a cotización (i) de las Acciones Sin Voto que se emitan en ese aumento en las Bolsas de Valores españolas y en el Sistema de Interconexión Bursátil Español y (ii) de losAmerican Depositary Sharesrepresentativos de las Acciones Sin Voto que se emitan en ese aumento en el mercado de valores NASDAQ (el“Aumento de Capital”); |
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III. The Shareholder represents and warrants to Talecris (i) that he/she/it is the sole legal and beneficial owner of the shares in Grifols set out opposite his/her/its name in Annex 1, and (ii) that such shares are free from any charge, lien, or encumbrance and not subject to any third-party right; | III. El Accionista declara y garantiza a Talecris (i) que es el propietario y beneficiario único y pleno de las acciones de Grifols que se indican junto a su nombre en elAnexo 1, y (ii) que esas acciones se encuentran libres de toda carga o gravamen y no sujetas a ningún derecho de terceros; | |
IV. Simultaneously with this Agreement, Talecris is on this same date entering into agreements in terms similar to this Agreement in all material respects with other shareholders of Grifols identified in Annex 3 (the“Other Shareholders” and the“Other Grifols’ Shareholders Voting Agreements” and, together with the Shareholder and this Agreement, the“Grifols’ Shareholders” and the“Grifols’ Shareholders Voting Agreements”); | IV. Que, simultáneamente con la firma de este Contrato, Talecris suscribe en esta misma fecha contratos en términos similares a este Contrato en todos sus aspectos sustanciales con los otros accionistas de Grifols identificados en elAnexo 3 (los“Otros Accionistas” y los“Contratos Relativos al Voto con los Otros Accionistas de Grifols” y, junto al Accionista y este Contrato, los“Accionistas de Grifols” y los“Contratos Relativos al Voto con los Accionistas de Grifols”); | |
V. As an essential condition for Talecris agreeing to enter into the Transaction Agreement, Talecris has requested from the Shareholder that he/she/it enters into this Agreement. | V. Que, como condición esencial para que Talecris suscribiese el Contrato de Compraventa, Talecris ha solicitado al Accionista que suscriba el presente Contrato. | |
NOW THEREFORE,based upon the foregoing, the Parties have agreed to enter into this agreement (the“Agreement”) and to abide by the provisions set forth in the following, | EN ATENCIÓN A LO ANTERIOR, las Partes han decidido celebrar el presente contrato (el“Contrato”) prestando su consentimiento a las siguientes, | |
CLAUSES | CLÁUSULAS | |
1. VOTING AND COOPERATION OBLIGATIONS | 1. OBLIGACIONES DE COOPERACIóN Y VOTO | |
1.1. Voting in the general shareholders meeting of Grifols | 1.1. Votación en la junta general de accionistas de Grifols | |
The Shareholder hereby agrees to: | El Accionista se obliga a: | |
(A) attend (in person or by proxy) all the general shareholders meetings of Grifols convened during the term of this Agreement; | (A) asistir (personalmente o mediante representante) a todas las juntas generales de accionistas de Grifols convocadas durante la vigencia de este Contrato; | |
(B) vote (in person or by proxy) all his/her/its shares in Grifols for the approval of the Bylaws Amendment and the Capital Increase in all the general shareholders meetings of Grifols convened during the term of to this Agreement; and | (B) votar (personalmente o mediante representante) todas sus acciones de Grifols a favor de la aprobación de la Modificación Estatutaria y del Aumento de Capital en todas las juntas generales de accionistas de Grifols convocadas durante la vigencia de este Contrato; y | |
(C) vote (in person or by proxy) all his/her/its shares in Grifols in all the general shareholders meetings of Grifols convened during the term of this Agreement against the approval of any resolutions that (i) would be incompatible with the Bylaws Amendment or the Capital Increase or (ii) if approved, would interfere with, delay or prevent the consummation of the Transaction. | (C) votar (personalmente o mediante representante) todas sus acciones de Grifols en todas las juntas generales de accionistas de Grifols convocadas durante la vigencia de este Contrato en contra de la aprobación de cualquier acuerdo (i) que sea incompatible con la Modificación Estatutaria o el Aumento de Capital o (ii) que, de aprobarse, interferiría, retrasaría o impediría la consumación de la Operación. | |
1.2. Lock-up on shares in Grifols | 1.2. Mantenimiento de las acciones en Grifols | |
The Shareholder hereby agrees, with respect to the shares in Grifols he/she/it holds, to: | El Accionista se obliga, respecto de las acciones en Grifols de que es titular, a: | |
(A) continue to be the sole legal and beneficial owner of the shares in Grifols set out opposite his/her/its name inAnnex 1; | (A) continuar siendo el propietario y beneficiario único y pleno de las acciones de Grifols que se indican junto a su nombre en elAnexo 1; |
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(B) keep the shares in Grifols he/she/it holds free from any charge, lien, or encumbrance and not subject to any third-party right; | (B) mantener las acciones de Grifols de las que es titular libres de toda carga o gravamen y no sujetas a ningún derecho de terceros; | |
(C) not to transfer nor dispose of the shares in Grifols he/she/it holds nor to allow for such transfer or disposal, neither directly nor indirectly; and | (C) no transmitir ni disponer de las acciones de Grifols de las que es titular ni permitir en modo alguno su transmisión o disposición, ni directa ni indirectamente; y | |
(D) not to agree, irrevocably or subject to any conditions, to undertake any of the transactions referred to below with respect the shares it holds in Grifols. | (D) no obligarse, ni irrevocablemente ni aunque la obligación quede sometida al cumplimiento de condiciones, a realizar ninguna de las anteriores operaciones respecto de las acciones de Grifols de las que es titular. | |
Notwithstanding the foregoing Sections 1.2.(A), 1.2.(B), 1.2.(C) or 1.2.(D), the Shareholder shall have the right, in its sole discretion, to effectuate a Permitted Transfer. For purposes of this Agreement, a“Permitted Transfer” means a direct or indirect sale, transfer, assignment, pledge, encumbrance or other disposition of the shares of a Shareholder to(i) an affiliate of the Shareholder (provided such affiliate shall remain an affiliate of the Shareholder at all times following such Permitted Transfer), (ii) a descendant, heir, executor, administrator, testamentary trustee, lifetime trustee or legatee of the Shareholder, or (iii) any trust, the trustees of which include only the Shareholder or the persons named in clause (ii) and the beneficiaries of which include only the Shareholder or the persons named in clause (ii);provided, however, that prior to the effectiveness of any such disposition, any and all such transferees, assignees, or beneficiaries of the pledge or disposal executes and delivers to Talecris a written agreement, in form and substance acceptable to Talecris, to assume all of the Shareholder’s obligations hereunder in respect of the securities subject to such disposition and to be bound by the terms of this Agreement, with respect to the securities subject to such disposition, to the same extent as the Shareholder is bound hereunder and to make each of the representations and warranties hereunder in respect of the securities transferred as the Shareholder shall have made hereunder. A Permitted Transfer shall not relieve the Shareholder from its obligations under this Agreement if, following the Transfer, the Shareholder retains any interest in the shares transferred (e.g. a pledge). The Shareholder hereby agrees to be jointly and severally liable with any person to whom he/she/it effects a Permitted Transfer for any breach by any such transferee of his/her/its obligations under this Agreement. | No obstante lo dispuesto en las Cláusulas 1.2.(A), 1.2.(B), 1.2.(C) o 1.2.(D) anteriores, el Accionista tendrá derecho, a su entera discreción, a realizar una Transmisión Permitida. A lo efectos de este Contrato una“Transmisión Permitida” significa una venta, transmisión, cesión, prenda, gravamen o cualquier otra disposición directa o indirecta de las acciones de un Accionista a favor de (i) una entidad perteneciente al grupo del Accionista (siempre y cuando dicha entidad permanezca como una entidad del grupo del Accionista en todo momento con posterioridad a dicha Transmisión Permitida), (ii) un descendiente, heredero, ejecutor, administrador, albacea testamentario o legatario del Accionista, o (iii) cualquier fideicomiso, cuyos fideicomisarios incluyan sólo al Accionista o a las personas nombradas en el apartado (ii), y cuyos beneficiarios incluyan solo al Accionista o a las personas nombradas en el apartado (ii); siempre y cuando, con anterioridad a la eficacia de una transmisión cualquiera de las antes referidas, todos y cada uno de los adquirentes, cesionarios, acreedores pignoraticios o beneficiarios de la transmisión suscriban y entreguen a Talecris un acuerdo por escrito, en forma y sustancia aceptable por Talecris, en virtud del cual asuman todas las obligaciones del Accionista anteriores en relación a los acciones objeto de transmisión, y se obligue de conformidad con los términos del presente Contrato en relación a los acciones objeto de transmisión de la misma forma en que el Accionista, y realice en la misma forma que el Accionista cada una de las manifestaciones y garantías contenidas en este Contrato en relación a los acciones objeto de transmisión. Las Transmisiones Permitidas que supongan que, una vez realizadas, el Accionista mantiene un derecho o interés sobre los acciones transmitidos no liberarán al Accionista de sus obligaciones conforme a este Contrato (p.ej. una prenda). El Accionista será responsable solidario, con todas las personas a las que transmita acciones en una Transmisión Permitida, por cualquier incumplimiento de las obligaciones de esas personas conforme a este Contrato. | |
2. TERM | 2. DURACIÓN | |
The obligations of the Shareholder under Section 1 of this Agreement shall be in force until the earlier of the following dates: | Las obligaciones del Accionista conforme a la Cláusula 1 de este Contrato estarán en vigor hasta la primera de las siguientes fechas: | |
(A) The date on which the Transaction is consummated pursuant to the Transaction Agreement; and | (A) La fecha en que se consume la Operación conforme al Contrato de Compraventa; y |
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(B) The date on which the Transaction Agreement is terminated in accordance with its terms. | (B) La fecha en que el Contrato de Compraventa quede sin efecto de acuerdo con lo previsto en él. | |
The arrival of any such dates or the termination of the Transaction Agreement shall not affect (i) the ability of Talecris to claim for any damages or losses suffered by Talecris due to breaches by the Shareholder, occurring through the earlier of such dates, of his/her/its obligations hereunder nor (ii) the applicability of Sections 3 and 4, which shall continue to be in force until all obligations by the Parties under this Agreement have been fulfilled. | El transcurso de las anteriores fechas o el hecho de que el Contrato de Compraventa quede sin efecto no afectará (i) al derecho de Talecris de reclamar cualesquiera daños y perjuicios sufridos por Talecris debido a incumplimientos del Accionista ocurridos hasta la primera de esas fechas de las obligaciones establecidas para éstos en este Contrato ni (ii) a la vigencia de las Cláusulas 3 y 4, que permanecerán en vigor hasta que queden íntegramente cumplidas las obligaciones de las Partes conforme a este Contrato. | |
3. MISCELLANEOUS | 3. MISCELÁNEA | |
3.1. Language | 3.1. Idioma | |
This Agreement is executed in Spanish and English. In the event of any discrepancy between the two versions, the English version shall prevail over the Spanish one. | Este Contrato se suscribe en español e inglés. En caso de que existiese cualquier discrepancia entre ambas versiones, prevalecerá la versión inglesa sobre la española. | |
3.2. No assignment | 3.2. No cesión | |
This Agreement shall apply to, inure to the benefit of, and be binding upon and enforceable against the Parties (and their assignees permitted hereunder and their legal successors) only. | Este Contrato será de aplicación, vinculará y beneficiará únicamente a las Partes (y sus respectivos cesionarios permitidos conforme a este Contrato o sucesores) y su cumplimiento podrá ser exigido únicamente a las Partes (y sus respectivos cesionarios permitidos conforme a este Contrato o sucesores). | |
Except in connection with a Permitted Transfer, any assignment of rights or obligations hereunder by any Party will require the prior written consent of the other Parties, except that assignments of rights or obligations by Talecris to any wholly-owned subsidiary of Talecris shall not require the consent of the Parties other than Talecris if the Talecris remains jointly and severally liable with the relevant subsidiary with respect to the obligations assigned to such subsidiary. | Salvo en el caso de una Transmisión Permitida, cualquier cesión de derechos u obligaciones derivados de este Contrato por una Parte requerirá el consentimiento previo por escrito de las otras Partes excepto por cesiones de derechos u obligaciones realizadas por Talecris a cualquier filial íntegramente participada de Talecris, que no requerirán el consentimiento de las Partes distintas de Talecris siempre que Talecris permanezca obligado solidariamente con la filial de que se trate respecto del cumplimiento de las obligaciones cedidas. | |
3.3. Further assurance | 3.3. Actuaciones complementarias | |
Each Party agrees that it will, at the request and expense of the requesting Party, execute and deliver such documents, including all such additional conveyances, transfers, consents and other assurances and do all such other acts and things as the other Party hereto, acting reasonably, may from time to time request to be executed or done in order to evidence better or perfect or effectuate any provision of this Agreement or of any agreement or other document executed pursuant to this Agreement or any of the respective obligations intended to be created hereby or thereby. | Cada Parte se obliga a que, a solicitud y a costa de la Parte requirente, suscribirá y otorgará aquellos documentos, incluyendo sin limitación alguna cualesquiera documentos de transmisión y consentimiento, y realizará cualesquiera otros actos que la otra Parte pudiera razonablemente solicitar en cualquier momento al objeto de acreditar mejor, perfeccionar o dar efecto a cualquier disposición o previsión del presente Contrato o de cualquier otro contrato o documentación suscrita u otorgada en virtud de este Contrato o a cualquiera de las respectivas obligaciones que se pretenden crear en virtud de este Contrato o de esos contratos o documentos. |
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The Parties agree to take all actions, and to do all things necessary, proper or advisable to consummate and make effective, in the most expeditious practicable manner, the transactions contemplated hereby, including the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other competent authorities preventing consummation of the transactions contemplated hereby vacated or reversed. | Las Partes se comprometen a llevar a cabo todos los actos, así como a adoptar todas las medidas necesarias, adecuadas o aconsejables al objeto de consumar y perfeccionar, en la forma más rápida posible, las operaciones aquí previstas, incluyendo la defensa frente a cualesquiera procedimientos de cualquier naturaleza, judicial o administrativa, que pretendan limitar o atacar la validez y eficacia del presente Contrato o la consumación de las operaciones previstas en él, incluyendo el tomar medidas dirigidas a obtener el levantamiento o la anulación de cualquier medida cautelar dictada por cualquier tribunal o por cualquier otra autoridad competente que impida la consumación de las operaciones previstas en este Contrato. | |
3.4. Disclosure of this Agreement under Article 112 of the LMV | 3.4. Publicidad de este Contrato conforme al artículo 112 LMV | |
In spite of the agreements contained herein being temporary in nature and not addressed to establish a joint policy by any of the Parties on Grifols, the Parties agree to have this Agreement filed and communicated as required under Article 112 of the Spanish Securities Market Law (Ley del Mercado de Valores) as soon as practicable after the date hereof, with communications thereunder being delivered to Grifols, the Spanish Comisión Nacional del Mercado de Valores. and the Commercial Registry of Barcelona on the day following the date on which this Agreement is signed. | Si bien los acuerdos contenidos en este Contrato son de naturaleza temporal y no están destinados a establecer una política común por ninguna de las Partes respecto de Grifols, las Partes acuerdan depositar y comunicar tan pronto como sea posible el Contrato conforme a lo establecido en el artículo 112 de la Ley del Mercado de Valores, presentándose las comunicaciones conforme a ese artículo a Grifols, la Comisión Nacional del Mercado de Valores y el Registro Mercantil en la fecha siguiente a la de firma de este Contrato. | |
3.5. Entire Agreement. Severability | 3.5. Acuerdo íntegro. Nulidad parcial | |
It is expressly understood and agreed by the Parties that this Agreement contains the entire agreement between the Parties regarding the subject matter hereof and this Agreement supersedes any and all prior agreements, arrangements or understandings between the Parties relating to the subject matter of this Agreement. No oral understandings, statements, promises or inducements contrary to the terms of this Agreement exist. | Las Partes reconocen y acuerdan expresamente que este Contrato contiene el acuerdo completo entre las Partes en relación con su objeto y que este Contrato sustituye todos los acuerdos, convenios y pactos anteriores entre las Partes en relación con el objeto de este Contrato. No existen acuerdos, pactos o promesas orales que sean contrarios a los términos de este Contrato. | |
If any of the provisions of this Agreement is or becomes invalid, illegal or unenforceable under any applicable laws of any competent jurisdiction, the validity, legality or enforceability of the remaining provisions shall not in any way be affected or impaired. The Parties shall nevertheless negotiate in good faith in order to agree the terms of mutually satisfactory provisions, achieving as closely as possible the same commercial effect, to be substituted for the provisions so found to be void or unenforceable. | En caso de que cualquiera de las disposiciones del presente Contrato sea o devenga nula, inválida o ineficaz de conformidad con la normativa aplicable de cualquier jurisdicción competente, la validez, legalidad o eficacia de las restantes disposiciones de este Contrato no se verán afectadas en modo alguno. Las Partes negociarán de buena fe con el fin de acordar disposiciones con términos mutuamente satisfactorios que reemplacen a aquéllas que sean o devengan nulas o ineficaces y cuyo efecto comercial sea el más cercano posible al de las disposiciones a que reemplazan. | |
Nothing in this Agreement prevents the Shareholder, if he/she/it is a Director of Grifols, from fulfilling his/her/its fiduciary duties as a Director of Grifols, but nothing shall relieve the Shareholder in its capacity as a shareholder in Grifols from fulfilling its obligations hereunder. | Las obligaciones asumidas en este Contrato no impiden al Accionista, si es que es administrador de Grifols, cumplir con sus deberes fiduciarios como administrador de Grifols, pero nada liberará al Accionista de cumplir con las obligaciones que asume como accionista de Grifols conforme a este Contrato. |
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3.6. Specific Performance | 3.6. Cumplimiento específico | |
The Parties expressly agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that indemnification for damages alone would not be an adequate remedy. Accordingly, and for the avoidance of any doubt, the Parties expressly acknowledge and agree that Talecris shall be entitled to seek and obtain specific performance from the Shareholder (in addition to any other remedies Talecris may be entitled to) (i) of the Shareholder obligations under this Agreement and (ii) to prevent any breach by the Shareholder of his/her/its obligations under this Agreement. | Las Partes reconocen y acuerdan expresamente que la falta de cumplimiento con los exactos términos de este Contrato y, en general, su incumplimiento podrían causar daños irreparables a las Partes y que la sola obtención de una indemnización por daños no sería un remedio adecuado. En consecuencia, y para evitar dudas, las Partes expresamente reconocen y acuerdan que Talecris tendrá derecho a exigir al Accionista, y obtener de éste, el cumplimiento específico (in natura) (que será adicional a cualquier otro remedio o acción a que tenga derecho Talecris) (i) de las obligaciones asumidas por éste en el Contrato y (ii) para evitar el incumplimiento de las obligaciones del Accionista conforme este Contrato. | |
3.7. Joint and several liability with, and guarantee of, the other Grifols’ Shareholders | 3.7. Solidaridad y garantía con los otros Accionistas de Grifols | |
The Shareholder agrees to be jointly and severally liable with the other Grifols’ Shareholders for the obligations of each such shareholder under each of the Grifols’ Shareholders Voting Agreements, and guarantees the exact and punctual fulfilment by such other Grifols’ Shareholders of their obligations under each of the Grifols’ Shareholders Voting Agreements. | El Accionista acepta ser responsable solidario con los otros Accionistas de Grifols por las obligaciones a cargo de cada uno de esos accionistas en los Contratos Relativos al Voto con los Accionistas de Grifols, y garantiza el puntual y fiel cumplimiento por los otros Accionistas de Grifols de las obligaciones a cargo de éstos en los Contratos Relativos al Voto con los Accionistas de Grifols. | |
The Shareholder represents and warrants that he/she/it knows the Grifols’ Shareholders Voting Agreements and, therefore, the obligations for which he/she/it is assuming liability hereunder. | El Accionista declara conocer todos los Contratos Relativos al Voto con los Accionistas de Grifols y, por tanto, las obligaciones allí establecidas por las que asume responsabilidad en este apartado. | |
In particular, without limitation to the foregoing, the Shareholder agrees to indemnify Talecris jointly and severally with the other Grifols’ Shareholders for any and all damages and losses suffered by Talecris as a consequence of any and all breach under any and all the Grifols’ Shareholders Voting Agreements, regardless of the damages and losses being attributable to the breach of one, several or all the Grifols’ Shareholders. As a consequence, the Shareholder may not raise as a defence or mitigating circumstance that any such damages and losses are not attributable or are not solely attributable to breaches of the Shareholder. | En particular, sin limitación a lo anterior, el Accionista se obliga a indemnizar a Talecris solidariamente con los otros Accionistas de Grifols todos y cualesquiera daños y perjuicios sufridos por Talecris como consecuencia de todo incumplimiento conforme a los Contratos Relativos al Voto con los Accionistas de Grifols, con independencia de que los daños y perjuicios sean atribuibles a uno, a varios o a todos los Accionistas de Grifols. En consecuencia, el Accionista no podrá alegar como defensa total o parcial que tales daños y perjuicios no son atribuibles o no son sólo atribuibles a incumplimientos del Accionista. | |
Nothing in this Agreement shall relieve any other Grifols Shareholders nor Grifols from liability for breach of the other the Grifols’ Shareholders Voting Agreements or the Transaction Agreement. | Nada en este Contrato liberará a los otros Accionistas de Grifols ni a Grifols de responsabilidad por incumplimiento de los otros Contratos Relativos al Voto con los Accionistas de Grifols o del Contrato de Compraventa. | |
Conversely, nothing in the other the Grifols’ Shareholders Voting Agreements nor in the Transaction Agreement shall relieve the Shareholder from liability for breach of this Agreement. In particular, without limitation, the liability of the Shareholder for damages and losses suffered by Talecris as a consequence of any breach by Grifols Shareholders shall not be extinguished by the payment or the coming due of the Parent Termination Fee (as this term is defined in the Transaction Agreement). | Nada en los otros Contratos Relativos al Voto con los Accionistas de Grifols ni en el Contrato de Compraventa liberará al Accionista de responsabilidad por incumplimiento de este Contrato. En particular, sin limitación, la responsabilidad del Accionista por daños y perjuicios sufridos por Talecris como consecuencia de cualquier incumplimiento de los Accionistas de Grifols no se verá extinguida o eliminada por el pago o el devengo de la “Parent Termination Fee” (según se define éste término en el Contrato de Compraventa). |
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4. APPLICABLE LAW AND JURISDICTION | 4. LEY APLICABLE Y JURISDICCIÓN | |
(A) Applicable law: This Agreement shall be governed by, and construed, interpreted and enforced in accordance with, the laws of the State of Delaware, without regard to the principles of conflicts of laws;provided however, that Sections 1 and 3.4 hereunder (and no other provisions) shall be governed by and enforced in accordance with the laws of the Kingdom of Spain, without regard to the principles of conflicts of laws. | (A) Ley aplicable: Este Contrato se regirá, interpretará y cumplirá de acuerdo con el derecho del Estado de Delaware, con exclusión de cualesquiera normas de conflicto o de reenvío;si biensus Cláusulas 1 y 3.4 (pero no ninguna otra disposición) se regirán, interpretarán y cumplirán de acuerdo con el derecho del Reino de España, con exclusión de cualesquiera normas de conflicto o de reenvío. |
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(B) Exclusive jurisdiction: Each of the Parties hereby agrees that any claim, dispute or controversy (of any and every kind or type, whether based on contract, tort, statute, regulation or otherwise, and whether based on state, federal, foreign or any other law, including the laws of the Kingdom of Spain), arising out of, relating to or in connection with this Agreement or any of the transactions contemplated thereby, and including disputes relating to the existence, validity, breach or termination of this Agreement (any such claim, dispute or controversy being a“Covered Claim”), shall be submitted, heard and determined exclusively in the Court of Chancery of the State of Delaware and the appropriate appellate courts therefrom (the“Chancery Court”), and in no other;provided, however, that in the event the Chancery Court lacks subject matter jurisdiction over a Covered Claim, such claim shall be submitted, heard and determined exclusively in another state or federal court sitting in the state of Delaware and the appropriate appellate courts therefrom (an“Other Delaware Court”). Each of the Parties expressly agrees and acknowledges that the Delaware Chancery Court (or, if the Delaware Chancery Court lacks subject matter jurisdiction, an Other Delaware Court) is an appropriate and convenient forum for resolution of any and all Covered Claims, that it will not suffer any undue hardship or inconvenience if required to litigate in such court, and that such court is fully competent and legally capable of adjudicating any Covered Claim, expressly including Covered Claims governed by Spanish law. Each Party further represents that it has agreed to the jurisdiction of the Chancery Court (or, if the Delaware Chancery Court lacks subject matter jurisdiction, an Other Delaware Court) in respect of Covered Claims after being fully and adequately advised by legal counsel of its own choice concerning the procedures and laws applied in such courts and has not relied on any representation by any other party or its affiliates, representatives or advisors as to the content, scope or effect of such procedures and law, and will not contend otherwise in any proceeding in any court of any jurisdiction. | (B) Jurisdicción exclusiva: Cada una de las Partes acuerda que cualquier reclamación, disputa o controversia (de cualquier tipo, sea basada en contrato, de tipo extracontractual, basada en normativa o de otro tipo, y con independencia de que sea fundada en derecho federal, estatal, extranjero o de cualquier otro tipo, incluyendo el derecho del Reino de España) que surja de este Contrato o cualquiera de operaciones en él contempladas o que tenga relación o conexión con este Contrato o cualquiera de las operaciones en él contempladas, e incluyendo las disputas relativas a la existencia, validez, incumplimiento o terminación de este Contrato (cada reclamación, disputa o controversia, una“Reclamación Cubierta”), deberá ser sometida, oída y resuelta exclusivamente en la “Court of Chancery” del Estado de Delaware y en los tribunales de apelación que allí correspondan (la“Chancery Court”), y no en cualquier otro fuero o jurisdicción;si bien, en el caso de que la Chancery Court no tuviese jurisdicción por razón de la materia en relación con una Reclamación Cubierta, esa reclamación deberá ser sometida, oída y resuelta exclusivamente en otro tribunal o corte, estatal o federal, ubicada en el Estado de Delaware y en los tribunales de apelación correspondientes a ese tribunal o corte que procedan (un“Tribunal de Delaware Diferente” o los“Otros Tribunales de Delaware”). Cada una de las Partes expresamente reconoce y acuerda que la Chancery Court de Delaware (o, si la Chancery Court de Delaware no tuviese jurisdicción por razón de la materia, un Tribunal de Delaware Diferente) es un fuero apropiado y conveniente para la resolución de cada una y todas las Reclamaciones Cubiertas, que no sufrirá indebidas dificultades o incomodidades por tener que litigar en ese fuero y que ese fuero es totalmente competente y jurídicamente capaz de decidir cualquier Reclamación Cubierta, incluyendo las Reclamaciones Cubiertas sujetas a Derecho español. Cada Parte declara además que ha consentido a la jurisdicción de la Chancery Court (o, si la Chancery Court de Delaware no tuviese jurisdicción por razón de la materia, un Tribunal de Delaware Diferente) respecto a las Reclamaciones Cubiertas después de haber recibido asesoramiento adecuado y completo, por parte de asesores legales que esa misma Parte ha elegido, respecto de los procedimientos y normas aplicados por esos tribunales y no ha confiado en ninguna declaración realizada por cualquier otra parte o sus personas afiliadas o vinculadas, representantes o asesores en cuanto al contenido, ámbito o efecto de tales procedimientos y normas, y no sostendrá algo distinto de lo aquí manifestado en ningún procedimiento de ninguna jurisdicción. |
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(C) Personal jurisdiction. Each of the Parties hereby irrevocably submits, for itself and in respect to his/her/its Affiliates (as this term is defined in the Transaction Agreement) and properties, generally and unconditionally, to the exclusive personal jurisdiction of the Chancery Court and Other Delaware Courts in respect of Covered Claims. The parties hereby consent to and grant any such Chancery Court and Other Delaware Courts jurisdiction over the person of such parties and, to the extent permitted by Law, over the subject matter of such dispute and agree that mailing of process or other papers in connection with any such action or proceeding in the manner referred to in Section 5 below or in such other manner as may be permitted by Law shall be valid and sufficient service thereof. In addition, Shareholder (i) consents to service of process upon him/her/it by mailing or delivering such service to its agent, Corporation Service Company, 2711 Centerville Road Suite 400, Wilmington Delaware 19808, (the“Service Agent”), (ii) authorizes and directs the Service Agent to accept such service, and (iii) shall take all such action as may be necessary to continue such appointment in full force and effect or to appoint another agent so that it will at all times have an agent for service of process for the foregoing purposes in the State of Delaware. | (C) Jurisdicción personal. Cada una de las Partes se somete irrevocablemente, respecto de si misma y de sus Afiliadas (“Affiliates”, según se define este término en el Contrato de Compraventa) y patrimonio, general e incondicionadamente, a la jurisdicción personal y exclusiva de la Chancery Court y los Otros Tribunales de Delaware respecto de las Reclamaciones Cubiertas. Las partes consienten y otorgan jurisdicción a la Chancery Court y los Otros Tribunales de Delaware sobre las personas antes referidas y, en la medida de lo admitido en derecho, sobre la materia de esas disputas y acuerdan que la notificación de cualquier demanda y demás documentación en la forma establecida en la Cláusula 5 siguiente o en cualquier otro modo admitido en derecho será válido y suficiente como notificación. Adicionalmente, el Accionista (i) consiente que la notificación de cualquier demanda y cualquier notificación relativa a un proceso le sea realizada mediante envío por correo o entrega de esa demanda y notificaciones a su agente, Corporation Service Company, 2711 Centerville Road Suite 400, Wilmington Delaware 19808, (el“Agente de Notificación”), (ii) autoriza e instruye al Agente de Notificación para aceptar todas esas notificaciones y (iii) deberá llevar a cabo todas las actuaciones necesarias para mantener la designación del Agente de Notificación en pleno vigor y efecto o designar otro agente de forma que en todo momento tenga un agente de notificación en el Estado de Delaware a los efectos antes establecidos. |
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(D) Covenants. Each of the Parties hereby irrevocably waives, and agrees not to attempt to assert or assert, by way of motion or other request for leave from the Chancery Court (or, if the Delaware Chancery Court lacks subject matter jurisdiction, an Other Delaware Court), or as a defense, counterclaim or otherwise, in any action involving a Covered Claim, (a) the defense of sovereign immunity, or the defense that any Covered Claim or remedy with respect thereto is within the exclusive jurisdiction of a court outside the State of Delaware, (b) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Section 4, (c) that such Party or his/her/its Affiliates (as this term is defined in the Transaction Agreement) or property is exempt or immune from jurisdiction of any such courts or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise), and(d) to the fullest extent permitted by applicable law that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, including on the basis that the suit, action or proceeding is governed under the laws of the Kingdom of Spain, (ii) the suit, action or proceeding is not maintainable in such court, (iii) the venue of such suit, action or proceeding is improper or inappropriate and (iv) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. Each of the Parties further hereby irrevocably waives, and agrees not to attempt to assert, by way of motion or other request in any other court of other forum, that a judgment entered by the Chancery Court or any Other Delaware Court, including a judgment for specific performance, is not enforceable in such other court or forum, whether in the United States of America, the Kingdom of Spain or elsewhere. The Parties agree that a final judgment in respect of any Covered Claim of the Delaware Chancery Court (or any Other Delaware Court) shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable Law. | (D) Obligaciones. Cada una de las Partes renuncia irrevocablemente a alegar u oponer, y acuerda no alegar u oponer ni intentar alegar u oponer, como declinatoria ante la Chancery Court (o, si la Chancery Court de Delaware no tuviese jurisdicción por razón de la materia, un Tribunal de Delaware Diferente), o como defensa, reconvención o de otro modo, en ninguna acción relativa a una Reclamación Cubierta, (a) una defensa o excepción de inmunidad soberana, o una defensa o excepción según la cual cualquier Reclamación Cubierta o cualquier remedio en relación con una Reclamación Cubierta está dentro de la jurisdicción exclusiva de un tribunal situado fuera del Estado de Delaware, (b) cualquier pretensión o argumentación de que la Parte no está sometida a la jurisdicción de los tribunales antes referidos por cualquier motivo distinto a la falta de notificación del proceso conforme a lo establecido en esta Cláusula 4, (c) que esa Parte o sus Afiliadas (“Affiliates”, según se define este término en el Contrato de Compraventa) o patrimonio está exento o es inmune a la jurisdicción de los tribunales antes referidos o a los procedimientos legales comenzados en esos tribunales (sea por notificación de procedimiento, embargo previo al fallo, embargo para ayudar a la ejecución del fallo, ejecución de fallo o de otro modo), y (d) con el carácter más amplio posible conforme al derecho aplicable, que (i) la demanda, acción o procedimiento en tal tribunal ha sido presentada en un fuero inapropiado, incluyendo sobre la base de que la demanda, acción o procedimiento está regida por el derecho del Reino de España; (ii) la demanda, acción o procedimiento no puede ser mantenida, presentada o procesada en ese tribunal, (iii) el foro de tal demanda, acción o procedimiento es inadecuado o inapropiado y (iv) este Contrato, o su materia y objeto, no puede ser hecho cumplir o ejecutado por esos tribunales. Cada una de las Partes, además, renuncia irrevocablemente a alegar u oponer, y acuerda no alegar u oponer ni intentar alegar u oponer, como declinatoria o de cualquier otro modo ante cualquier tribunal, que un fallo del Chancery Court o de cualquier Tribunal de Delaware Diferente, incluyendo un fallo exigiendo el cumplimiento específico, no es exigible en tal otro tribunal, sea en los Estados Unidos de América, en el Reino de España o en otro lugar. Las Partes acuerdan que una sentencia definitiva de la Chancery Court de Delaware (u Otros Tribunales de Delaware) respecto de una Reclamación Cubierta resolverá definitivamente la Reclamación Cubierta y será ejecutable en otras jurisdicciones mediante ejecución de la sentencia o de cualquier otro modo admitido en derecho. |
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(E) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF ANY LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 4. | (E) Renuncia a Jurado. CADA PARTE RECONOCE Y ACUERDA QUE CUALQUIER CONTROVERSIA QUE PUDIESE SURGIR EN RELACIÓN CON ESTE CONTRATO PROBABLEMENTE IMPLICARÁ ASUNTOS COMPLEJOS Y DIFÍCILES Y, EN CONSECUENCIA, CADA PARTE RENUNCIA IRREVOCABLE E INCONDICIONADAMENTE A CUALQUIER DERECHO QUE PUDIESE TENER ESA PARTE A JUICIO CON JURADO EN RELACIÓN CON CUALQUIER LITIGIO QUE DIRECTA INDIRECTAMENTE SURJA O GUARDE RELACIÓN CON ESTE CONTRATO O LAS OPERACIONES EN ÉL CONTEMPLADAS. CADA PARTE CERTIFICA Y RECONOCE QUE (i) NINGÚN REPRESENTANTE, AGENTE O ABOGADO DE CUALQUIER OTRA PARTE LE HA MANIFESTADO, EXPRESAMENTE O DE OTRO MODO, QUE TAL OTRA PARTE NO EXIGIRÁ EL CUMPLIMIENTO CON ESTA RENUNCIA EN CASO DE LITIGIO, (ii) CADA PARTE COMPRENDE Y HA CONSIDERADO LAS IMPLICACIONES DE ESTA RENUNCIA, (iii) CADA PARTE OTORGA ESTA RENUNCIA VOLUNTARIAMENTE, y (iv) CADA PARTE HA SIDO INDUCIDA A SUSCRIBIR ESTE CONTRATO POR, ENTRE OTRAS COSAS, LAS MUTUAS RENUNCIAS Y CERTIFICACIONES CONTENIDAS EN ESTA CLÁUSULA 4. | |
5. NOTICES | 5. COMUNICACIONES | |
Except for notices that are specifically required by the terms of this Agreement to be delivered orally, all notices, requests, claims, demands and other communications hereunder shall be in English, in writing and shall be deemed given if delivered personally, by telecopy (which transmission is confirmed electronically) or sent by overnight courier (providing proof of delivery) to the Parties at the following addresses (or at such other address for a Party as shall be specified by like notice): | Excepto por las comunicaciones que conforme a los términos de este Contrato deban ser realizadas oralmente, todas las notificaciones, peticiones, solicitudes y otras comunicaciones relativas a este Contrato deberán realizarse en inglés, por escrito y se entenderán realizadas si son efectuadas personalmente, por fax/telecopia (cuya transmisión sea confirmada electrónicamente) o por mensajero urgente (facilitando prueba de entrega) a las Partes en las siguientes direcciones (o en tal otra dirección para una Parte que sea comunicada por ésta a las otras conforme a lo aquí previsto): |
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(A) if to Talecris, to: | (A) las comunicaciones a Talecris a: | |
TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. P.O. Box 110526 4101 Research Commons 79 T.W. Alexander Drive Research Triangle Park, North Carolina 27709 Fax: +1 919 287 2807 Attention: John F. Gaither, Jr. Executive Vice President, General Counsel & Corporate Secretary | TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. P.O. Box 110526 4101 Research Commons 79 T.W. Alexander Drive Research Triangle Park, North Carolina 27709 Fax: +1 919 287 2807 Attention: John F. Gaither, Jr. Executive Vice President, General Counsel & Corporate Secretary | |
with a copy to: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019 Fax: +1 212.403.2343 Attention: Mark Gordon | con copia a: Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019 Fax: +1 212.403.2343 Attention: Mark Gordon | |
and Uría Menéndez Príncipe de Vergara, 187 Plaza de Rodrigo Uría 28002 Madrid Fax: +34.91.586.04.71 Attention: Juan Miguel Goenechea / Javier Illescas | y Uría Menéndez Príncipe de Vergara, 187 Plaza de Rodrigo Uría 28002 Madrid Fax: +34.91.586.04.71 Attention: Juan Miguel Goenechea / Javier Illescas | |
and | y | |
(B) if to Shareholder, to the address set forth next to the Shareholder’s name onAnnex 1. | (B) las comunicaciones al Accionista, a la dirección indicada junto al nombre del Accionista en el Anexo 1. |
Rest of page intentionally left blank. Signature page follows on next page. | El resto de la página se ha dejado en blanco intencionadamente.Página de firmas a continuación. |
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, in 2 authentic versions, all to the same and one effect, in the place and as at the date first written above. | COMO EXPRESIÓN DE SU CONSENTIMIENTO, las Partes suscriben este Contrato en el lugar y la fecha indicados en el encabezamiento en 2 ejemplares a un solo efecto. | |
TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. | TALECRIS BIOTHERAPEUTICS HOLDINGS CORP.P.p. | |
By Name: Title: | Nombre: Cargo: | |
[Shareholder] | [Shareholder] | |
By | By |
Signature page of Voting Agreement between TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. and [Shareholder] dated 6 June 2010. | Página de firmas del Contrato de Compromisos Relativos al Voto entre TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. y [Shareholder], S.A. de fecha 6 de junio de 2010. |
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Shareholder and shares in Grifols / Accionista y acciones de Grifols
Shareholder / Accionista | |||
Identification / Identificación | |||
Number of shares in Grifols held by the Shareholder / | |||
Número de acciones de Grifols propiedad del Accionista | |||
Percentage over the share capital of Grifols represented by the shares in Grifols held by the Shareholder / Porcentaje del capital social de Grifols que representan las acciones de Grifols propiedad del Accionista | |||
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Bylaws Amendment / Modificación Estatutaria
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DRAFT OF PROVISIONS TO BE INCLUDED IN GIANT BYLAWS PROVIDING FOR THE NON-VOTING SHARES1 | BORRADOR DE DISPOSICIONES SOBRE ACCIONES SIN VOTO A INCLUIR EN LOS ESTATUTOS DE GIANT1 | |
Article 6o.- Share Capital | Artículo 6o.- Capital social | |
1. Shares.The share capital of the Company is [ • ] euros, represented by [ • ] shares, fully subscribed andpaid-up, pertaining to two separate classes: | 1. Acciones.El capital de la Sociedad es de [ • ] euros, representado por [ • ] acciones, íntegramente suscritas y desembolsadas, pertenecientes a dos clases distintas: | |
1.1. The Class “A” comprises 213.064.899 shares having a nominal value of 0.50 euros each, all of which belong to the same class and series, and being the ordinary shares of the Company (the“Class A Shares”); and | 1.1. 213.064.899 acciones pertenecientes a la Clase “A”, de 0,50 euros de valor nominal cada una, pertenecientes a la misma clase y serie, y que son las acciones ordinarias de la Sociedad (las“Acciones Clase A”); y | |
1.2. The Class “B” comprises [ • ] shares having a nominal value of euros each, all of which belong to the same class and series and being non-voting shares of the Company with the preferential rights set forth in Article 6o Bis of these ByLaws (the“Class B Shares” and, together with the Class A Shares, the“shares”). | 1.2. [ • ] acciones pertenecientes a la Clase “B”, de euros de valor nominal cada una, pertenecientes a la misma clase y serie, y que son acciones sin voto de la Sociedad con los derechos preferentes establecidos en el Artículo 6o Bis de estos estatutos (las“Acciones Clase B” y, conjuntamente con las Acciones Clase A, las“acciones”). | |
2. Form of Representation.The shares are represented in book-entry form and are governed by the Securities Market Law [Ley del Mercado de Valores] and such other provisions as may be applicable. The book-entry registry shall be maintained by the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear) and its participant entities. | 2. Representación.Las acciones están representadas por medio de anotaciones en cuenta y se rigen por la Ley del Mercado de Valores y demás disposiciones que les sean aplicables. La llevanza del registro contable de anotaciones en cuenta corresponderá a la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear) y a sus entidades participantes. | |
Article 6o Bis.- Terms and conditions of the Class B Shares | Artículo 6o Bis.- Términos y condiciones de las Acciones Clase B | |
1. General | 1. General | |
The Class B Shares shall be treated in all respects as being identical to the Class A Shares, and not be subject to discriminatory treatment relative to the Class A Shares, except that the Class B Shares (A) are not entitled to voting rights; and (B) have the preferred dividend, liquidation preference and other rights set forth in this Article 6 Bis. | Las Acciones Clase B deberán ser tratadas en todos los aspectos como idénticas a las Acciones Clase A, y no serán sometidas a un trato discriminatorio respecto de las Acciones Clase A, si bien, como excepción a lo anterior, las Acciones Clase B (A) no tienen derecho de voto; y (B) tienen el derecho al dividendo preferente, el derecho a la cuota de liquidación preferente y los otros derechos establecidos en este Artículo 6 Bis. |
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2. Preferred Dividends | 2. Dividendo preferente | |
2.1. Calculation.Each Class B Share entitles its holder to receive a minimum annual preferred dividend out of the distributable profits for each year at the end of which it is still in issue (the“Preferred Dividend” and, each fiscal year in respect of which the Preferred Dividend is calculated, a“Calculation Period”) equal to 0.01 euros per Class B Share. | 2.1. Cálculo.Cada Acción Clase B da derecho a su titular a recibir un dividendo preferente mínimo anual con cargo a los beneficios distribuibles de cada ejercicio a cuya finalización la Acción Clase B permanezca emitida (el“Dividendo Preferente” y cada ejercicio respecto del que el Dividendo Preferente se calcula, un“Periodo de Cálculo”) igual a 0,01 euros por Acción Clase B. | |
2.2. Preference.The Company shall pay the Preferred Dividend on the Class B Shares for a Calculation Period before any dividend out of distributable profits obtained by the Company during such Calculation Period is paid on the Class A Shares. | 2.2. Preferencia.La Sociedad está obligada a acordar el reparto del Dividendo Preferente correspondiente a un Periodo de Cálculo y a pagarlo a los titulares de las Acciones Clase B antes de pagar dividendo alguno a los titulares de las Acciones Clase A con cargo a los beneficios distribuibles obtenidos por la Sociedad en dicho Periodo de Cálculo. | |
2.3. Accrual.Payment. Non-cumulative nature. | 2.3. Devengo. Pago. Carácter no acumulativo. | |
(A) The Preferred Dividend on all the Class B Shares in issue at the end of a Calculation Period shall be paid by the Company to the holders of the Class B Shares within the nine months following the end of such Calculation Period, in the amount such aggregate Preferred Dividend does not exceed the distributable profits obtained by the Company during such Calculation Period. | (A) El Dividendo Preferente correspondiente a todas las Acciones Clase B que estuviesen emitidas a la finalización de un Periodo de Cálculo deberá pagarse por la Sociedad a los titulares de las Acciones Clase B dentro de los nueve meses siguientes a la finalización de dicho Periodo de Cálculo, en la cuantía en que el importe agregado de dicho Dividendo Preferente para las Acciones Clase B no exceda del importe de los beneficios distribuibles obtenidos por la Sociedad en dicho Periodo de Cálculo. | |
(B) If during a Calculation Period the Company has not obtained sufficient distributable profits to pay in full, out of distributable profits obtained by the Company during such Calculation Period, the Preferred Dividend on all the Class B Shares in issue for such Calculation Period, the part of the aggregate Preferred Dividend that exceeds the distributable profits obtained by the Company during such Calculation Period shall not be paid and not accumulated as dividend payable in the future. | (B) Si en un Periodo de Cálculo la Sociedad no hubiese obtenido beneficios distribuibles suficientes para el completo pago, con cargo a los beneficios distribuibles obtenidos por la Sociedad en ese Periodo de Cálculo, del Dividendo Preferente de todas las Acciones Clase B que estuviesen emitidas a la finalización de ese Periodo de Cálculo, la parte del importe agregado de dicho Dividendo Preferente para las Acciones Clase B que exceda de los beneficios distribuibles obtenidos por la Sociedad durante ese Periodo de Cálculo no se pagará ni se acumulará como dividendo pagadero en el futuro. |
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2.4. Voting rights in case of non-payment of the Preferred Dividend.Lack of payment, total or partial, of the Preferred Dividend during a Calculation Period due to the Company not having obtained sufficient distributable profits to pay in full the Preferred Dividend for such Calculation Period, shall not cause the Class B Shares to recover any voting rights. | 2.4. Derechos de voto en caso de falta de pago del Dividendo Preferente.La falta de pago, total o parcial, del Dividendo Preferente en un Periodo de Cálculo debido a la no obtención por la Sociedad de beneficios distribuibles suficientes para el completo pago del Dividendo Preferente de ese Periodo de Cálculo, no supondrá la recuperación del derecho de voto para las Acciones Clase B. | |
3. Other Dividends | 3. Otros dividendos y repartos | |
3.1. Each Class B Share entitles its holder to receive, in addition to the Preferred Dividend, the same dividends and other distributions (in each case, whether in cash, securities of the Company or any of its subsidiaries, or any other securities, assets or rights) as one Class A Share and, therefore, each Class B Share shall be treated as one Class A Share for purposes of any dividends and other distributions made on Class A Shares, including as to the timing of the declaration and payment of any such dividend or distribution. | 3.1. Cada Acción Clase B da derecho a su titular a recibir, además del Dividendo Preferente, los mismos dividendos y otros repartos o distribuciones (con independencia de si esos dividendos, repartos o distribuciones se satisfacen en dinero, valores de la Sociedad o de cualquiera de sus filiales, o cualesquiera otros valores, bienes o derechos) que una Acción Clase A y, en consecuencia, cada Acción Clase B deberá ser tratada como una Acción Clase A en relación con cualesquiera dividendos y otras repartos o distribuciones satisfechas a titulares de Acciones Clase A, incluyendo en lo relativo a la fecha de declaración y pago de tales dividendos, repartos o distribuciones. | |
4. Redemption rights | 4. Derecho de rescate | |
4.1. Redemption event.Each Class B Share entitles its holder to have it redeemed as set forth in this section 4 if a tender offer for all or part of the shares in the Company is made and settled (in whole or in part) except if holders of Class B Shares have been entitled to participate in such offer and have their shares acquired in such offer equally and on the same terms as holders of Class A Shares (including, without limitation, for the same consideration) (each such a tender offer, a“Redemption Event”). | 4.1. Supuesto de rescate.Cada Acción Clase B da derecho a su titular a obtener su rescate conforme a lo establecido en este apartado 4 en caso de que (cada oferta que cumpla lo que sigue, un“Supuesto de Rescate”) se formulase y liquidase (en todo o en parte) una oferta pública de adquisición por la totalidad o parte de las acciones de la Sociedad excepto si los titulares de Acciones Clase B hubiesen tenido derecho a participar en esa oferta y a que sus acciones fuesen adquiridas en esa oferta de la misma forma y en los mismos términos que los titulares de Acciones Clase A (incluyendo, sin limitación, por la misma contraprestación). |
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4.2. Maximum number of shares of Class B Shares to be redeemed in a given Redemption Event.Notwithstanding the foregoing, Class B Shares redeemed following a given Redemption Event shall not represent a percentage over the total Class B Shares in issue at the time the tender offer causing that Redemption Event is made in excess of the percentage that the sum of Class A Shares (i) to which the offer causing the Redemption Event is addressed; (ii) held by the offerors in that offer; and (iii) held by persons acting in concert with the offerors or by persons having reached an agreement relating to the offer with the offerors represent over the total Class A Shares in issue at the time the tender offer causing that Redemption Event is made. | 4.2. Máximo porcentaje de Acciones Clase B rescatadas ante un Supuesto de Rescate.No obstante lo anterior, las Acciones Clase B rescatadas como consecuencia de un determinado Supuesto de Rescate no podrán representar respecto del total de Acciones Clase B en circulación al tiempo de formularse la oferta pública de adquisición que dé lugar a ese Supuesto de Rescate de que se trate un porcentaje superior a ese que la suma de las Acciones Clase A (i) a que se dirija la oferta que dé lugar a ese Supuesto de Rescate, (ii) de que sean titulares los oferentes en esa oferta y (iii) de que sean titulares las personas que actúen en concierto con los oferentes o las personas que hayan alcanzado con los oferentes algún acuerdo relativo a la oferta represente respecto del total de Acciones Clase A en circulación al tiempo de formularse la oferta pública de adquisición que dé lugar a ese Supuesto de Rescate. | |
In the event that due to the application of the limit referred above not all Class B Shares in respect of which the redemption right has been exercised in connection with a Redemption Event may be redeemed, the Class B Shares of each holder to be redeemed shall be reduced relative to the number of Class B Shares in respect of which such holder has exercised the redemption rights so that the above referred limit is not exceeded. | En caso de que por aplicación del límite antes referido no pueda atenderse el rescate de todas las Acciones Clase B respecto de las que en ese Supuesto de Rescate se haya ejercitado el derecho de rescate, se reducirán las Acciones Clase B a rescatar de cada titular de Acciones Clase B en proporción al número de Acciones Clase B respecto de las que haya ejercido el derecho de rescate de forma que no se exceda el referido límite. | |
4.3. Redemption process.Upon the occurrence of a Redemption Event, | 4.3. Proceso de rescate.En caso de que se produzca un Supuesto de Rescate, | |
(A) Announcement: The Company shall, for informational purposes only and within 10 days of the date on which a Redemption Event occurs, publish in the Commercial Registry Gazette, the Spanish Stock Exchanges Gazettes and in at least two of the newspapers with widest circulation in Barcelona an announcement informing the holders of Class B Shares of the occurrence of a Redemption Event and the process for the exercise of the redemption right in connection with such Redemption Event. | (A) Anuncio:La Sociedad deberá, a efectos informativos y en el plazo de 10 días desde que tenga lugar un Supuesto de Rescate, publicar en el Boletín Oficial del Registro Mercantil, los Boletines de las Bolsas de Valores españolas y en al menos dos de los diarios de mayor circulación de Barcelona un anuncio informando a los titulares de las Acciones Clase B de la ocurrencia de un Supuesto de Rescate y del proceso para el ejercicio del derecho de rescate en relación con ese Supuesto de Rescate. |
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(B) Exercise by holders:Each holder of Class B Shares shall be entitled to exercise its redemption right for 2 months from the first date of settlement of the offer causing the Redemption Event by notifying their decision to the Company. The Company shall ensure that the notification of exercise of the redemption right may be made through the systems of the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear). | (B) Ejercicio por los titulares:Cada titular de Acciones Clase B podrá ejercitar su derecho de rescate durante dos meses desde la primera fecha de liquidación de la oferta que dé lugar al Supuesto de Rescate mediante comunicación a la Sociedad. La Sociedad deberá asegurarse que la comunicación de ejercicio del derecho de rescate pueda realizarse a través de los sistemas de la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear). | |
(C) Price:The redemption price to be paid by the Company for each Class B Share for which the redemption right has been exercise shall be the sum of (i) the amount in euros of the highest consideration paid in the offer causing the Redemption Event plus (ii) interest on the amount referred to in (i), from the date the offer causing the Redemption Event is first settled until the date of full payment of the redemption price, at a rate equal to1-year Euribor plus 300 basis points. | (C) Precio:El precio de rescate que deberá ser pagado por la Sociedad por cada Acción Clase B respecto de la que se haya ejercido el derecho de rescate será igual a la suma de (i) un importe en euros igual a la contraprestación más alta pagada en la oferta que dé lugar al Supuesto de Rescate y (ii) intereses sobre el importe referido en (i) desde la primera fecha de liquidación de la oferta que dé lugar al Supuesto de Rescate hasta la fecha de completo pago del precio de rescate a un tipo igual a Euribor a un año más 300 puntos básicos. | |
For purposes of the previous paragraph, the amount in euros corresponding to any non-cash consideration paid in the offer causing the Redemption Event shall be the market value of such non-cash consideration as at the date the offer causing the Redemption Event is first settled. The calculation of such market value shall be supported by at least two independent experts designated by the Company from auditing firms of international repute. | A efectos del párrafo anterior, se considerará, como importe en euros respecto a cualquier contraprestación no dineraria satisfecha en la oferta que dé lugar al Supuesto de Rescate, su valor de mercado por referencia a la fecha de primera liquidación de la oferta que dé lugar al Supuesto de Rescate. El cálculo de ese valor de mercado deberá ser soportado por al menos dos expertos independientes designados por la Sociedad de entre firmas de auditoría de prestigio internacional. |
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(D) Formalization of the Redemption.The Company shall, within 40 days of the date on which the period for notification of the exercise of redemption rights following a Redemption Event occurs, take all the necessary actions to (a) effectively pay the redemption price for the Class B Shares in respect of which the redemption right has been exercised and complete the capital reduction required for the redemption; and(b) reflect the amendment to Article 6 of these ByLaws deriving from the redemption. In this respect, the Directors of the Company are hereby authorized and obligated to take all such actions, including (a) completing the capital reduction required for the redemption; (b) the granting of the relevant public deeds and registration with the Commercial Registry of the changes in Article 6 of these ByLaws deriving from the redemption of Class B Shares;(c) the formalization of the amendment of the book-entries in the book-entry registry; (d) and the making of the relevant filings and requests with any other persons, including the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear), the Spanish Stock Exchanges, the Spanish Securities Exchange Commission and the Commercial Registry. | (D) Formalización del Rescate.La Sociedad deberá, en el plazo de 40 días desde finalice el período para la notificación del ejercicio del derecho de rescate tras un Supuesto de Rescate, llevar a cabo todas las acciones necesarias para (a) pagar el precio de rescate correspondiente a las Acciones Clase B respecto de las que se haya ejercido el derecho de rescate y para llevar a cabo la reducción de capital necesaria para el rescate; y (b) reflejar la modificación del Artículo 6 de estos estatutos derivada del rescate. En este sentido, los administradores de la Sociedad quedan autorizados y obligados a adoptar todas aquellas actuaciones, incluyendo (a) llevar a cabo y consumar la reducción de capital necesaria para el rescate; (b) el otorgamiento e inscripción en el Registro Mercantil de las escrituras públicas en que se reflejen las modificaciones del Artículo 6 de estos estatutos derivadas del rescate de las Acciones Clase B; (c) la formalización de la modificación de las anotaciones en cuenta ante las entidades encargadas del registro contable; (d) la realización de las pertinentes solicitudes e instancias ante cualesquiera otras personas, incluyendo la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear), las Bolsas de Valores españolas y la Comisión Nacional del Mercado de Valores y el Registro Mercantil. | |
4.4. Effect on Dividends.After a Redemption Event occurs and until the redemption price for the Class B Shares in respect of which the redemption right has been exercised has been paid in full, the Company shall not be able to declare or pay any dividends nor any other distributions to its shareholders (in each case, whether in cash, securities of the Company or any of its subsidiaries, or any other securities, assets or properties). | 4.4. Efecto en dividendos.Desde el acaecimiento de un Supuesto de Rescate hasta que el precio de rescate de las Acciones Clase B respecto de las que se haya ejercido el derecho de rescate quede íntegramente satisfecho, la Sociedad no podrá satisfacer dividendo, reparto o distribución alguna a sus accionistas (con independencia de si esos dividendos, repartos o distribuciones se satisfacen en dinero, valores de la Sociedad o de cualquiera de sus filiales, o cualesquiera otros valores, bienes o derechos). | |
5. Preferential liquidation rights | 5. Derecho de liquidación preferente | |
5.1. Each Class B Share entitles its holder to receive, upon thewinding-up and liquidation of the Company, an amount (the“Liquidation Preference”) equal to the sum of (i) the nominal value of such Class B Share, and (ii) the share premium paid up for such Class B Share when it was subscribed for. | 5.1. Cada Acción Clase B da derecho a su titular a recibir, en caso de disolución y liquidación de la Sociedad, una cantidad (la“Cuota de Liquidación Preferente”) igual a la suma de (i) el valor nominal de la Acción Clase B, y (ii) la prima de emisión desembolsada para la emisión de esa Acción Clase B. |
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5.2. The Company shall pay the Liquidation Preference on the Class B Shares before any amount on account of liquidation is paid on the Class A Shares. | 5.2. La Sociedad pagará la Cuota de Liquidación Preferente a las Acciones Clase B antes de pagar importe alguno a los titulares de las Acciones Clase A como cuota de liquidación. | |
5.3. Each Class B Share entitles its holder to receive, in addition to the Liquidation Preference, the same amount on account of liquidation as one Class A Share. | 5.3. Cada Acción Clase B da derecho a su titular a recibir, además de la Cuota de Liquidación Preferente, la misma cuota de liquidación que se satisfaga respecto de una Acción Clase A. | |
6. Other rights | 6. Otros derechos | |
6.1. Subscription rights. | 6.1. Derechos de suscripción. | |
Each Class B Share entitles its holder to the same rights (including preferential subscription right (derecho de suscripción preferente), and the free allotment right (derecho de asignación gratuita)) as one Class A share in connection with any issuance, granting or sale of (i) any shares in the Company, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares in the Company or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in the Company. | Cada Acción Clase B atribuye a su titular los mismos derechos (incluyendo el derecho de suscripción preferente y el derecho de asignación gratuita) que una Acción Clase A en relación con cualquier emisión, otorgamiento o entrega de (i) cualesquiera acciones en la Sociedad, (ii) cualesquiera derechos u otros valores que den derecho a adquirir acciones de la Sociedad o que sean canjeables o convertibles en acciones en la Sociedad o (iii) cualesquiera opciones,warrantsu otros instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir cualesquiera valores de la Sociedad. | |
As exceptions to the foregoing, | Como excepción, | |
(A) the preferential subscription right and the free allotment right of the Class B Shares shall be only over new Class B Shares, and the preferential subscription right and the free allotment right of a Class A Share shall be only over new Class A Shares in each capital increase which meets the following three requirements (i) entail the issuance of Class A Shares and Class B Shares in the same proportion as Class A Shares and Class B Shares represent over the share capital of the Company at the time the resolution on the capital increase is passed; (ii) grants preferential subscription rights or free allotment rights, as applicable, to the Class B Shares over the Class B Shares being issued in the capital increase in the same terms as preferential subscription rights or free allotment rights, as applicable, are granted to the Class A Shares over the Class A Shares being issued in the capital increase; and (iii) in which no other shares or securities are issued; and | (A) el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase B tendrá sólo por objeto Acciones Clase B, y el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase A tendrá sólo por objeto Acciones Clase A en todo aumento que cumpla los siguientes tres requisitos (i) que suponga la emisión de Acciones Clase A y Acciones Clase B en la misma proporción que las Acciones Clase A y Acciones Clase B representen sobre el capital social de la Sociedad al tiempo de acordarse el aumento; (ii) que reconozca a las Acciones Clase B un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre las Acciones Clase B a emitir en ese aumento en términos iguales a aquellos en que se reconozca a las Acciones Clase A un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre las Acciones Clase A a emitir en ese aumento y (iii) en el q ue no se emitan otras acciones o valores; y |
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(B) likewise, the preferential subscription right and the free allotment right of a Class B Share shall be only over instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares and the preferential subscription right and the free allotment right of a Class A Share shall be only over instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares in each issuance which meets the following three requirements (i) entail the issuance of instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares and instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares in the same proportion as Class A Shares and Class B Shares represent over the share capital of the Company at the time the resolution on the capital increase is passed; (ii) grants preferential subscription rights or free allotment rights, as applicable, to the Class B Shares over the instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares being issued in such issuance in the same terms as preferential subscription rights or free allotment rights, as applicable, are granted to the Class A Shares over the instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares being issued in such issuance; and (iii) in which no other shares or securities are issued. | (B) del mismo modo, el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase B tendrá sólo por objeto instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase B, y el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase A tendrá sólo por objeto instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase A en toda emisión que cumpla los siguientes tres requisitos (i) que suponga la emisión de instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase A e instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase B en la misma proporción que las Acciones Clase A y Acciones Clase B representen sobre el capital social de la Sociedad al tiempo de acordarse el aumento; (ii) que reconozca a las Acciones Clase B un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre los instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir las Acciones Clase B a emitir en esa emisión en términos iguales a aquellos en que se reconozca a las Acciones Clase A un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre los instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir las Acciones Clase A a emitir en esa emisión; y (iii) en la que no se emitan otras acciones o valores. | |
6.2. Separate vote at the general shareholders meeting on Extraordinary Matters.Without prejudice and in addition to the rights provided in Article 92.3 of the Public Companies Law [Ley de Sociedades Anónimas], but also in order to protect Class B Shares, resolutions of the Company on the following matters (the“Extraordinary Matters”) will require, in addition to the resolution being approved pursuant to Article 17 of these ByLaws, the approval of a majority of Class B Shares then in issue: | 6.2. Voto separado en la junta general de accionistas respecto de Materias Extraordinarias.Sin perjuicio de lo dispuesto en el artículo 92.3 de la Ley de Sociedades Anónimas y de forma adicional, pero también para proteger los derechos de las Acciones Clase B, los acuerdos de la Sociedad sobre las siguientes materias (las“Materias Extraordinarias”) requerirán, además de su aprobación conforme a lo dispuesto en el artículo 17 de estos estatutos, la aprobación de |
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la mayoría de las Acciones Clase B entonces en circulación: | ||
(A) Any resolution (i) authorizing the Company or any subsidiary of the Company to repurchase or acquire any Class A Shares in the Company, except for pro rata repurchases available equally to holders of Class B Shares on the same terms and at the same price as offered to holders of Class A Shares (ii) approving the redemption of any shares in the Company and any share capital reductions (through repurchases, cancellation of shares or otherwise) other than (a) those redemptions mandatory by law and (b) those redemptions which affect equally Class A Shares and Class B Shares and in which each Class B is treated equally and on the same terms as one Class A Share in such transaction; | (A) Cualquier acuerdo (i) que autorice a la Sociedad o a cualquiera de sus filiales a recomprar o adquirir cualesquiera Acciones Clase A de la Sociedad, excepto para recompras a pro rata que se ofrezcan a los titulares de las Acciones Clase B en los mismos términos y a un precio ofrecido igual que a los titulares de Acciones Clase A o (ii) que apruebe la amortización de acciones de la Sociedad y cualquier reducción de capital (a través de recompras, cancelación de acciones o de cualquier otra forma) distintas de (a) las amortizaciones obligatorias por ley y (b) las amortizaciones que afecten por igual a las Acciones Clase A y a las Acciones Clase B, y en las que se da a cada Acción Clase B el mismo trato y se le otorgan los mismos términos que a cada Acción Clase A; | |
(B) Any resolution approving the issuance, granting or sale (or authorizing the Board of Directors of the Company to issue, grant or sell) (i) any shares in the Company, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares in the Company or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in the Company, except, for (i), (ii) and (iii), if (A) each Class B Share is treated equally as one Class A Share in the relevant issuance, grant or sale and, therefore, has preferential subscription or allotment rights in the relevant issuance, grant or sale to the same extent, if any, as a Class A Share or (B) if the issuance is made in accordance with section 6.1; | (B) Cualquier acuerdo aprobando la emisión, otorgamiento o entrega (o autorizando al consejo de administración de la Sociedad para emitir, otorgar o entregar) (i) cualesquiera acciones en la Sociedad, (ii) cualesquiera derechos u otros valores que den derecho a adquirir acciones de la Sociedad o que sean canjeables o convertibles en acciones en la Sociedad o (iii) cualesquiera opciones,warrantsu otros instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir cualesquiera valores de la Sociedad, excepto, en los casos (i), (ii) y (iii) anteriores, si (A) a cada Acción Clase B se le da el mismo trato en la correspondiente emisión, otorgamiento o entrega que a una Acción Clase A, y, por tanto, tiene, de haberlos, los mismos derechos de preferencia (de suscripción, de adjudicación preferente o de otro tipo) en la correspondiente emisión, otorgamiento o entrega que una Acción Clase A o (B) la emisión se hace conforme a lo establecido en el apartado 6.1 anterior; |
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(C) Any resolution approving unconditionally or not (i) a transaction subject to Law 3/2009 (including, without limitation, a merger, split-off, cross-border redomiciliation or global assignment of assets and liabilities), except if in such transaction each Class B Share is treated equally as one Class A Share in all respects; or (ii) the dissolution orwinding-up of the Company, except where such resolution is mandatory by law; | (C) Cualquier acuerdo aprobando incondicionalmente o no (i) una operación sometida a la Ley 3/2009 (incluyendo, sin limitación, una fusión, escisión, cambio de domicilio al extranjero o cesión global de activo y pasivo), excepto si en dicha operación cada Acción Clase B es tratada de igual manera que una Acción Clase A en todos los aspectos; o (ii) la disolución o liquidación de la Sociedad, excepto cuando el acuerdo sea obligatorio por ley; | |
(D) Any resolution for the delisting from any stock exchange of any shares of the Company; and | (D) Cualquier acuerdo aprobando la exclusión de cualesquiera acciones de la Sociedad de cotización o negociación en cualquier bolsa de valores o mercado secundario; y | |
(E) Generally, any resolution and any amendment of the Company’s ByLaws which directly or indirectly adversely affects the rights, preferences or privileges of the Class B Shares (including any resolution that adversely affects the Class B Shares relative to the Class A Shares or that positively affects the Class A Shares relative to the Class B Shares, or that affects the provisions in these Bylaws relating to the Class B Shares). | (E) En general, cualquier acuerdo y cualquier modificación de los estatutos de la Sociedad que directa o indirectamente perjudique o afecte negativamente a los derechos, preferencias o privilegios de las Acciones Clase B (incluyendo cualquier acuerdo que perjudique o afecte negativamente a las Acciones Clase B en comparación con las Acciones Clase A o que beneficie o afecte positivamente a las Acciones Clase A en comparación con las Acciones Clase B, o que afecte a las disposiciones de estos estatutos relativas a las Acciones Clase B). | |
The general shareholders’ meeting has the power to decide on all matters assigned to it by the law or these Bylaws and, in particular, without limitation to the foregoing, shall be the only corporate body or office entitled to decide on the matters considered “Extraordinary Matters” in this Article of the Bylaws. | La junta general tiene competencia para decidir sobre todas las materias que le hayan sido atribuidas legal o estatutariamente y, en particular, a título enunciativo, será el único órgano social o cargo con competencia para decidir en las materias consideradas “Materias Extraordinarias” conforme a este artículo de estos estatutos. | |
6.3. Other rights.The Class B Shares shall have the other rights provided for them in Articles 91.2 and 92 of the Public Companies Law [Ley de Sociedades Anónimas] and, except as set forth in this Article 6o Bis and in Articles 91.2 and 92 of the Public Companies Law [Ley de Sociedades Anónimas], each Class B Share entitles its holder to the same rights as one Class A Share (including the right to attend all general shareholders meetings of the Company, the right to information on the Company and the right to challenge resolutions of the Company). | 6.3. Otros derechos.Las Acciones Clase B tienen los demás derechos reconocidos en los artículos 91.2 y 92 de la Ley de Sociedades Anónimas y, salvo lo dispuesto en este Artículo 6o Bis y en los artículos 91.2 y 92 de la Ley de Sociedades Anónimas, cada Acción Clase B atribuye a su titular los mismos derechos que una Acción Clase A (incluyendo los derechos de asistencia a las juntas generales de accionistas de la Sociedad, de información sobre la Sociedad y de impugnación de acuerdos sociales). |
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Shareholder / Accionista | Nr. Shares/Acciones | % | ||||||
Manel Jose Canivell Grifols | 2.478.850 | 1,16 | % | |||||
Jordi Canivell Grifols | 2.478.845 | 1,16 | % | |||||
Ma Jose Canivell Grifols | 2.478.355 | 1,16 | % | |||||
Magdalena Canivell Grifols | 2.477.645 | 1,16 | % | |||||
Ma Josefa Grifols Lucas | 2.986.092 | 1,40 | % | |||||
Rodellar Amsterdam Holding, B.V. | 12.801.837 | 6,01 | % | |||||
Scranton Enterprises, B.V. | 15.898.258 | 7,46 | % | |||||
Deria, S.A. | 18.706.988 | 8,78 | % | |||||
Thorthol Holdings, B.V. | 15.042.766 | 7,06 | % |
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BY AND AMONG
GRIFOLS, S.A.
AND
TALECRIS HOLDINGS, LLC
DATED AS OF JUNE 6, 2010
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Page | ||||||
ARTICLE I General | A-E4 | |||||
1.1. | Defined Terms | A-E4 | ||||
ARTICLE II VOTING | A-E5 | |||||
2.1. | Agreement to Vote | A-E5 | ||||
2.2. | No Inconsistent Agreements | A-E7 | ||||
2.3. | Proxy | A-E7 | ||||
ARTICLE III REPRESENTATIONS AND WARRANTIES | A-E7 | |||||
3.1. | Representations and Warranties of the Stockholder | A-E7 | ||||
ARTICLE IV OTHER COVENANTS | A-E8 | |||||
4.1. | Prohibition on Transfers; Other Actions | A-E8 | ||||
4.2. | Stock Dividends, etc | A-E9 | ||||
4.3. | No Solicitation; Support of Takeover Proposals | A-E9 | ||||
4.4. | Notice of Acquisitions | A-E9 | ||||
4.5. | Further Assurances | A-E10 | ||||
ARTICLE V MISCELLANEOUS | A-E10 | |||||
5.1. | Termination | A-E10 | ||||
5.2. | No Ownership Interest | A-E10 | ||||
5.3. | Notices | A-E10 | ||||
5.4. | Interpretation; Definitions | A-E12 | ||||
5.5. | Counterparts | A-E12 | ||||
5.6. | Entire Agreement | A-E12 | ||||
5.7. | Governing Law; Consent to Jurisdiction; Waiver of Jury Trial | A-E12 | ||||
5.8. | Amendment; Waiver | A-E13 | ||||
5.9. | Remedies | A-E14 | ||||
5.10. | Severability | A-E14 | ||||
5.11. | Successors and Assigns; Third Party Beneficiaries | A-E14 | ||||
5.12. | Action by Stockholder Capacity Only | A-E14 | ||||
5.13. | Maximum Covered Share Amount | A-E14 | ||||
Schedule 1: | Stockholder | A-E17 |
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Page | ||||
Affiliate | 1 | |||
Agreement | 1 | |||
Beneficial Owner | 2 | |||
Beneficial Ownership | 2 | |||
Beneficially Own | 2 | |||
Beneficially Owned | 2 | |||
Chancery Court | 13 | |||
Company Common Stock | 1 | |||
control | 2 | |||
controlled by | 2 | |||
Covered Claim | 13 | |||
Covered Shares | 2 | |||
Credit Agreement | 16 | |||
Encumber | 2 | |||
Encumbrance | 2 | |||
Existing Shares | 2 | |||
Expiration Date | 2 | |||
Grantees | 5 | |||
Holdco | 1 | |||
Indenture | 16 | |||
Locked-Up Covered Shares | 2 | |||
Maximum Covered Share Amount | 16 | |||
Other Delaware Court | 13 | |||
Parent | 1 | |||
Permitted Transfer | 2 | |||
Person | 3 | |||
Representatives | 3 | |||
SEC | 8 | |||
Stockholder | 1 | |||
Subsidiary | 3 | |||
Transaction Agreement | 1 | |||
Transfer | 3 | |||
under common control with | 2 |
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Parc de Negocis Can Sant Joan
Sant Cugat del Vallès 08174
Barcelona, Spain
Fax: + 34.93.571.2201
Attention: Victor Grifols
1585 Broadway
New York, NY 10036
Facsimile:(212) 969-2900
Attention: Peter Samuels, Esq.
Avenida Diagonal, 477
Planta 20
08036 Barcelona
Spain
Fax: +34.93.410.2513
Attention: Tomás Dagá
Raimon Grifols
c/o Cerberus Capital Management, L.P.
299 Park Avenue
New York, New York 10019
Attention: Mark A. Neporent
Facsimile:
919 Third Avenue
New York, New York 10022
Attention: Stuart D. Freedman
P.O. Box 110526
4101 Research Commons
79 T.W. Alexander Drive
Research Triangle Park, North Carolina 27709
Fax:(919) 287-2907
Attention: John F. Gaither, Jr.
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51 West 52nd Street
New York, New York 10019
Facsimile:(212) 403-2343
Attention: Mark Gordon, Esq.
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By: | CERBERUS-PLASMA HOLDINGS LLC Its Managing Member |
By: | CERBERUS PARTNERS, L.P. Its Managing Member | |
By: | CERBERUS ASSOCIATES, L.L.C. Its General Partner | |
By: | /s/ Mark A. Neporent |
Title: | Vice President and Chief Operating Officer |
By: | /s/ Victor Grifols |
Title: | President and Chief Executive Officer |
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Name | Existing Shares | |
Talecris Holdings, LLC c/o Cerberus Capital Management, L.P. 299 Park Avenue New York, New York 10019 Attention: Mark A. Neporent | 61,175,236 shares of Common Stock |
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DRAFT OF PROVISIONS TO BE INCLUDED IN GIANT BY-LAWS PROVIDING FOR THE NON-VOTING SHARES | BORRADOR DE DISPOSICIONES SOBRE ACCIONES SIN VOTO A INCLUIR EN LOS ESTATUTOS DE GIANT | |||||
Article 6o.- Share Capital | Artículo 6o.- Capital social | |||||
1. | Shares. The share capital of the Company is [ • ] euros, represented by [ • ] shares, fully subscribed andpaid-up, pertaining to two separate classes: | 1. | Acciones. El capital de la Sociedad es de [ • ] euros, representado por [ • ] acciones, íntegramente suscritas y desembolsadas, pertenecientes a dos clases distintas: | |||
1.1. | The Class “A” comprises 213.064.899 shares having a nominal value of 0.50 euros each, all of which belong to the same class and series, and being the ordinary shares of the Company (the “Class A Shares”); and | 1.1. | 213.064.899 acciones pertenecientes a la Clase “A”, de 0,50 euros de valor nominal cada una, pertenecientes a la misma clase y serie, y que son las acciones ordinarias de la Sociedad (las “Acciones Clase A”); y | |||
1.2. | The Class “B” comprises [ • ] shares having a nominal value of [ • ] euros each, all of which belong to the same class and series and being non-voting shares of the Company with the preferential rights set forth in Article 6o Bis of these By-Laws (the “Class B Shares” and, together with the Class A Shares, the “shares”). | 1.2. | [ • ] acciones pertenecientes a la Clase “B”, de [ • ] euros de valor nominal cada una, pertenecientes a la misma clase y serie, y que son acciones sin voto de la Sociedad con los derechos preferentes establecidos en el Artículo 6o Bis de estos estatutos (las “Acciones Clase B” y, conjuntamente con las Acciones Clase A, las “acciones”). | |||
2. | Form of Representation. The shares are represented in book-entry form and are governed by the Securities Market Law [Ley del Mercado de Valores] and such other provisions as may be applicable. The book-entry registry shall be maintained by the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear) and its participant entities. | 2. | Representación. Las acciones están representadas por medio de anotaciones en cuenta y se rigen por la Ley del Mercado de Valores y demás disposiciones que les sean aplicables. La llevanza del registro contable de anotaciones en cuenta corresponderá a la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear) y a sus entidades participantes. | |||
Article 6o Bis.- Terms and conditions of the Class B Shares | Artículo 6oBis.- Términos y condiciones de las Acciones Clase B | |||||
1. | General | 1. | General | |||
Each Class B Share shall be treated in all respects, in spite of having a lower nominal value, as being identical to one Class A Share, and Class B Shares shall not be subject to discriminatory treatment relative to the Class A Shares, except that the Class B Shares (A) are not entitled to voting rights; and (B) have the preferred dividend, liquidation preference and other rights set forth in this Article 6 Bis. | Cada Acción Clase B deberá ser tratada en todos los aspectos, pese a tener un valor nominal inferior, como idéntica a una Acción Clase A, y las Acciones Clase B no serán sometidas a un trato discriminatorio respecto de las Acciones Clase A, si bien, como excepción a lo anterior, las Acciones Clase B (A) no tienen derecho de voto; y (B) tienen el derecho al dividendo preferente, el derecho a la cuota de liquidación preferente y los otros derechos establecidos en este Artículo 6 Bis. | |||||
The right of each Class B Share to the dividends and other distributions other than the Preferred Dividend and the preferential subscription right (derecho de suscripción preferente) and the free allotment right (derecho de asignación gratuita de acciones) of each Class B Share are the ones set forth in paragraphs 3.1 and 6.1 of this Article 6 Bis and are equal to those of a Class A Share, in spite of the nominal value of a Class B Share being lower than the nominal value of a Class A Share, as permitted by Articles 98 to 103 and 498 to 499 of the Companies Law [Ley de Sociedades de Capital]. | El derecho de cada Acción Clase B a los dividendos y otros repartos y distribuciones distintos del Dividendo Preferente y el derecho de suscripción preferente y de asignación gratuita de acciones de cada Acción Clase B son los previstos en los apartados 3.1 y 6.1 de este Artículo 6 Bis y son iguales a los de una Acción Clase A, a pesar de que el valor nominal de una Acción Clase B es inferior al de una Acción Clase A, al amparo de los Artículos 98 a 103 y 498 a 499 de la Ley de Sociedades de Capital. |
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2. | Preferred Dividends | 2. | Dividendo preferente | |||
2.1. | Calculation. Each Class B Share entitles its holder to receive a minimum annual preferred dividend out of the distributable profits for each year at the end of which it is still in issue (the “Preferred Dividend” and, each fiscal year in respect of which the Preferred Dividend is calculated, a “Calculation Period”) equal to 0.01 euros per Class B Share. | 2.1. | Cálculo. Cada Acción Clase B da derecho a su titular a recibir un dividendo preferente mínimo anual con cargo a los beneficios distribuibles de cada ejercicio a cuya finalización la Acción Clase B permanezca emitida (el “Dividendo Preferente” y cada ejercicio respecto del que el Dividendo Preferente se calcula, un “Periodo de Cálculo”) igual a 0,01 euros por Acción Clase B. | |||
2.2. | Preference. The Company shall pay the Preferred Dividend on the Class B Shares for a Calculation Period before any dividend out of distributable profits obtained by the Company during such Calculation Period is paid on the Class A Shares. | 2.2. | Preferencia. La Sociedad está obligada a acordar el reparto del Dividendo Preferente correspondiente a un Periodo de Cálculo y a pagarlo a los titulares de las Acciones Clase B antes de pagar dividendo alguno a los titulares de las Acciones Clase A con cargo a los beneficios distribuibles obtenidos por la Sociedad en dicho Periodo de Cálculo. | |||
2.3. | Accrual.Payment.Non-cumulative nature. | 2.3. | Devengo.Pago.Carácter no acumulativo. | |||
(A) The Preferred Dividend on all the Class B Shares in issue at the end of a Calculation Period shall be paid by the Company to the holders of the Class B Shares within the nine months following the end of such Calculation Period, in the amount such aggregate Preferred Dividend does not exceed the distributable profits obtained by the Company during such Calculation Period. | (A) El Dividendo Preferente correspondiente a todas las Acciones Clase B que estuviesen emitidas a la finalización de un Periodo de Cálculo deberá pagarse por la Sociedad a los titulares de las Acciones Clase B dentro de los nueve meses siguientes a la finalización de dicho Periodo de Cálculo, en la cuantía en que el importe agregado de dicho Dividendo Preferente para las Acciones Clase B no exceda del importe de los beneficios distribuibles obtenidos por la Sociedad en dicho Periodo de Cálculo. | |||||
(B) If during a Calculation Period the Company has not obtained sufficient distributable profits to pay in full, out of distributable profits obtained by the Company during such Calculation Period, the Preferred Dividend on all the Class B Shares in issue for such Calculation Period, the part of the aggregate Preferred Dividend that exceeds the distributable profits obtained by the Company during such Calculation Period shall not be paid and not accumulated as dividend payable in the future. | (B) Si en un Periodo de Cálculo la Sociedad no hubiese obtenido beneficios distribuibles suficientes para el completo pago, con cargo a los beneficios distribuibles obtenidos por la Sociedad en ese Periodo de Cálculo, del Dividendo Preferente de todas las Acciones Clase B que estuviesen emitidas a la finalización de ese Periodo de Cálculo, la parte del importe agregado de dicho Dividendo Preferente para las Acciones Clase B que exceda de los beneficios distribuibles obtenidos por la Sociedad durante ese Periodo de Cálculo no se pagará ni se acumulará como dividendo pagadero en el futuro. | |||||
2.4. | Voting rights in case of non-payment of the Preferred Dividend. Lack of payment, total or partial, of the Preferred Dividend during a Calculation Period due to the Company not having obtained sufficient distributable profits to pay in full the Preferred Dividend for such Calculation Period, shall not cause the Class B Shares to recover any voting rights. | 2.4. | Derechos de voto en caso de falta de pago del Dividendo Preferente. La falta de pago, total o parcial, del Dividendo Preferente en un Periodo de Cálculo debido a la no obtención por la Sociedad de beneficios distribuibles suficientes para el completo pago del Dividendo Preferente de ese Periodo de Cálculo, no supondrá la recuperación del derecho de voto para las Acciones Clase B. |
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3. | Other Dividends | 3. | Otros dividendos y repartos | |||
3.1. | Each Class B Share entitles its holder to receive, in addition to the Preferred Dividend, the same dividends and other distributions (in each case, whether in cash, securities of the Company or any of its subsidiaries, or any other securities, assets or rights) as one Class A Share and, therefore, each Class B Share shall be treated as one Class A Share for purposes of any dividends and other distributions made on Class A Shares, including as to the timing of the declaration and payment of any such dividend or distribution. | 3.1. | Cada Acción Clase B da derecho a su titular a recibir, además del Dividendo Preferente, los mismos dividendos y otros repartos o distribuciones (con independencia de si esos dividendos, repartos o distribuciones se satisfacen en dinero, valores de la Sociedad o de cualquiera de sus filiales, o cualesquiera otros valores, bienes o derechos) que una Acción Clase A y, en consecuencia, cada Acción Clase B deberá ser tratada como una Acción Clase A en relación con cualesquiera dividendos y otras repartos o distribuciones satisfechas a titulares de Acciones Clase A, incluyendo en lo relativo a la fecha de declaración y pago de tales dividendos, repartos o distribuciones. | |||
4. | Redemption rights | 4. | Derecho de rescate | |||
4.1. | Redemption event. Each Class B Share entitles its holder to have it redeemed as set forth in this section 4 if a tender offer for all or part of the shares in the Company is made and settled (in whole or in part) except if holders of Class B Shares have been entitled to participate in such offer and have their shares acquired in such offer equally and on the same terms as holders of Class A Shares (including, without limitation, for the same consideration) (each such a tender offer, a “Redemption Event”). | 4.1. | Supuesto de rescate. Cada Acción Clase B da derecho a su titular a obtener su rescate conforme a lo establecido en este apartado 4 en caso de que (cada oferta que cumpla lo que sigue, un “Supuesto de Rescate”) se formulase y liquidase (en todo o en parte) una oferta pública de adquisición por la totalidad o parte de las acciones de la Sociedad excepto si los titulares de Acciones Clase B hubiesen tenido derecho a participar en esa oferta y a que sus acciones fuesen adquiridas en esa oferta de la misma forma y en los mismos términos que los titulares de Acciones Clase A (incluyendo, sin limitación, por la misma contraprestación). | |||
4.2. | Maximum number of shares of Class B Shares to be redeemed in a given Redemption Event. Notwithstanding the foregoing, Class B Shares redeemed following a given Redemption Event shall not represent a percentage over the total Class B Shares in issue at the time the tender offer causing that Redemption Event is made in excess of the percentage that the sum of Class A Shares(i) to which the offer causing the Redemption Event is addressed; (ii) held by the offerors in that offer; and (iii) held by persons acting in concert with the offerors or by persons having reached an agreement relating to the offer with the offerors represent over the total Class A Shares in issue at the time the tender offer causing that Redemption Event is made. | 4.2. | Máximo porcentaje de Acciones Clase B rescatadas ante un Supuesto de Rescate. No obstante lo anterior, las Acciones Clase B rescatadas como consecuencia de un determinado Supuesto de Rescate no podrán representar respecto del total de Acciones Clase B en circulación al tiempo de formularse la oferta pública de adquisición que dé lugar a ese Supuesto de Rescate de que se trate un porcentaje superior a ese que la suma de las Acciones Clase A (i) a que se dirija la oferta que dé lugar a ese Supuesto de Rescate, (ii) de que sean titulares los oferentes en esa oferta y (iii) de que sean titulares las personas que actúen en concierto con los oferentes o las personas que hayan alcanzado con los oferentes algún acuerdo relativo a la oferta represente respecto del total de Acciones Clase A en circulación al tiempo de formularse la oferta pública de adquisición que dé lugar a ese Supuesto de Rescate. | |||
In the event that due to the application of the limit referred above not all Class B Shares in respect of which the redemption right has been exercised in connection with a Redemption Event may be redeemed, the Class B Shares of each holder to be redeemed shall be reduced relative to the number of Class B Shares in respect of which such holder has exercised the redemption rights so that the above referred limit is not exceeded. | En caso de que por aplicación del límite antes referido no pueda atenderse el rescate de todas las Acciones Clase B respecto de las que en ese Supuesto de Rescate se haya ejercitado el derecho de rescate, se reducirán las Acciones Clase B a rescatar de cada titular de Acciones Clase B en proporción al número de Acciones Clase B respecto de las que haya ejercido el derecho de rescate de forma que no se exceda el referido límite. |
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4.3. | Redemption process. Upon the occurrence of a Redemption Event, | 4.3. | Proceso de rescate. En caso de que se produzca un Supuesto de Rescate, | |||
(A) Announcement: The Company shall, for informational purposes only and within 10 days of the date on which a Redemption Event occurs, publish in the Commercial Registry Gazette, the Spanish Stock Exchanges Gazettes and in at least two of the newspapers with widest circulation in Barcelona an announcement informing the holders of Class B Shares of the occurrence of a Redemption Event and the process for the exercise of the redemption right in connection with such Redemption Event. | (A) Anuncio: La Sociedad deberá, a efectos informativos y en el plazo de 10 días desde que tenga lugar un Supuesto de Rescate, publicar en el Boletín Oficial del Registro Mercantil, los Boletines de las Bolsas de Valores españolas y en al menos dos de los diarios de mayor circulación de Barcelona un anuncio informando a los titulares de las Acciones Clase B de la ocurrencia de un Supuesto de Rescate y del proceso para el ejercicio del derecho de rescate en relación con ese Supuesto de Rescate. | |||||
(B) Exercise by holders: Each holder of Class B Shares shall be entitled to exercise its redemption right for 2 months from the first date of settlement of the offer causing the Redemption Event by notifying their decision to the Company. The Company shall ensure that the notification of exercise of the redemption right may be made through the systems of the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear). | (B) Ejercicio por los titulares: Cada titular de Acciones Clase B podrá ejercitar su derecho de rescate durante dos meses desde la primera fecha de liquidación de la oferta que dé lugar al Supuesto de Rescate mediante comunicación a la Sociedad. La Sociedad deberá asegurarse que la comunicación de ejercicio del derecho de rescate pueda realizarse a través de los sistemas de la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear). | |||||
(C) Price: The redemption price to be paid by the Company for each Class B Share for which the redemption right has been exercise shall be the sum of(i) the amount in euros of the highest consideration paid in the offer causing the Redemption Event plus (ii) interest on the amount referred to in(i), from the date the offer causing the Redemption Event is first settled until the date of full payment of the redemption price, at a rate equal to1-year Euribor plus 300 basis points. | (C) Precio: El precio de rescate que deberá ser pagado por la Sociedad por cada Acción Clase B respecto de la que se haya ejercido el derecho de rescate será igual a la suma de (i) un importe en euros igual a la contraprestación más alta pagada en la oferta que dé lugar al Supuesto de Rescate e (ii) intereses sobre el importe referido en (i) desde la primera fecha de liquidación de la oferta que dé lugar al Supuesto de Rescate hasta la fecha de completo pago del precio de rescate a un tipo igual a Euribor a un año más 300 puntos básicos. | |||||
For purposes of the previous paragraph, the amount in euros corresponding to any non-cash consideration paid in the offer causing the Redemption Event shall be the market value of such non-cash consideration as at the date the offer causing the Redemption Event is first settled. The calculation of such market value shall be supported by at least two independent experts designated by the Company from auditing firms of international repute. | A efectos del párrafo anterior, se considerará, como importe en euros respecto a cualquier contraprestación no dineraria satisfecha en la oferta que dé lugar al Supuesto de Rescate, su valor de mercado por referencia a la fecha de primera liquidación de la oferta que dé lugar al Supuesto de Rescate. El cálculo de ese valor de mercado deberá ser soportado por al menos dos expertos independientes designados por la Sociedad de entre firmas de auditoría de prestigio internacional. |
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(D) Formalization of the Redemption. The Company shall, within 40 days of the date on which the period for notification of the exercise of redemption rights following a Redemption Event lapses, take all the necessary actions to(a) effectively pay the redemption price for the Class B Shares in respect of which the redemption right has been exercised and complete the capital reduction required for the redemption; and(b) reflect the amendment to Article 6 of these By-Laws deriving from the redemption. In this respect, the Directors of the Company are hereby authorized and obligated to take all such actions, including(a) completing the capital reduction required for the redemption;(b) the granting of the relevant public deeds and registration with the Commercial Registry of the changes in Article 6 of these By-Laws deriving from the redemption of Class B Shares;(c) the formalization of the amendment of the book-entries in the book-entry registry;(d) and the making of the relevant filings and requests with any other persons, including the Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear), the Spanish Stock Exchanges, the Spanish Securities Exchange Commission and the Commercial Registry. | (D) Formalización del Rescate. La Sociedad deberá, en el plazo de 40 días desde finalice el período para la notificación del ejercicio del derecho de rescate tras un Supuesto de Rescate, llevar a cabo todas las acciones necesarias para (a) pagar el precio de rescate correspondiente a las Acciones Clase B respecto de las que se haya ejercido el derecho de rescate y para llevar a cabo la reducción de capital necesaria para el rescate; y (b) reflejar la modificación del Artículo 6 de estos estatutos derivada del rescate. En este sentido, los administradores de la Sociedad quedan autorizados y obligados a adoptar todas aquellas actuaciones, incluyendo (a) llevar a cabo y consumar la reducción de capital necesaria para el rescate; (b) el otorgamiento e inscripción en el Registro Mercantil de las escrituras públicas en que se reflejen las modificaciones del Artículo 6 de estos estatutos derivadas del rescate de las Acciones Clase B; (c) la formalización de la modificación de las anotaciones en cuenta ante las entidades encargadas del registro contable; (d) la realización de las pertinentes solicitudes e instancias ante cualesquiera otras personas, incluyendo la Sociedad de Gestión de los Sistemas de Registro, Compensación y Liquidación de Valores, S.A. (Iberclear), las Bolsas de Valores españolas y la Comisión Nacional del Mercado de Valores y el Registro Mercantil. | |||||
4.4. | Effect on Dividends. After a Redemption Event occurs and until the redemption price for the Class B Shares in respect of which the redemption right has been exercised has been paid in full, the Company shall not be able to declare or pay any dividends nor any other distributions to its shareholders (in each case, whether in cash, securities of the Company or any of its subsidiaries, or any other securities, assets or rights). | 4.4. | Efecto en dividendos. Desde el acaecimiento de un Supuesto de Rescate hasta que el precio de rescate de las Acciones Clase B respecto de las que se haya ejercido el derecho de rescate quede íntegramente satisfecho, la Sociedad no podrá satisfacer dividendo, reparto o distribución alguna a sus accionistas (con independencia de si esos dividendos, repartos o distribuciones se satisfacen en dinero, valores de la Sociedad o de cualquiera de sus filiales, o cualesquiera otros valores, bienes o derechos). | |||
5. | Preferential liquidation rights | 5. | Derecho de liquidación preferente | |||
5.1. | Each Class B Share entitles its holder to receive, upon thewinding-up and liquidation of the Company, an amount (the “Liquidation Preference”) equal to the sum of(i) the nominal value of such Class B Share, and (ii) the share premium paid up for such Class B Share when it was subscribed for. | 5.1. | Cada Acción Clase B da derecho a su titular a recibir, en caso de disolución y liquidación de la Sociedad, una cantidad (la “Cuota de Liquidación Preferente”) igual a la suma de (i) el valor nominal de la Acción Clase B, y (ii) la prima de emisión desembolsada para la emisión de esa Acción Clase B. | |||
5.2. | The Company shall pay the Liquidation Preference on the Class B Shares before any amount on account of liquidation is paid on the Class A Shares. | 5.2. | La Sociedad pagará la Cuota de Liquidación Preferente a las Acciones Clase B antes de pagar importe alguno a los titulares de las Acciones Clase A como cuota de liquidación. |
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5.3. | Each Class B Share entitles its holder to receive, in addition to the Liquidation Preference, the same amount on account of liquidation as one Class A Share. | 5.3. | Cada Acción Clase B da derecho a su titular a recibir, además de la Cuota de Liquidación Preferente, la misma cuota de liquidación que se satisfaga respecto de una Acción Clase A. | |||
6. | Other rights | 6. | Otros derechos | |||
6.1. | Subscription rights. | 6.1. | Derechos de suscripción. | |||
Each Class B Share entitles its holder to the same rights (including preferential subscription right (derecho de suscripción preferente), and the free allotment right (derecho de asignación gratuita)) as one Class A share in connection with any issuance, granting or sale of(i) any shares in the Company, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares in the Company or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in the Company | Cada Acción Clase B atribuye a su titular los mismos derechos (incluyendo el derecho de suscripción preferente y el derecho de asignación gratuita) que una Acción Clase A en relación con cualquier emisión, otorgamiento o entrega de (i) cualesquiera acciones en la Sociedad, (ii) cualesquiera derechos u otros valores que den derecho a adquirir acciones de la Sociedad o que sean canjeables o convertibles en acciones en la Sociedad o (iii) cualesquiera opciones,warrantsu otros instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir cualesquiera valores de la Sociedad. | |||||
As exceptions to the foregoing, | Como excepción, | |||||
(A) the preferential subscription right and the free allotment right of the Class B Shares shall be only over new Class B Shares, and the preferential subscription right and the free allotment right of a Class A Share shall be only over new Class A Shares in each capital increase which meets the following three requirements(i) entail the issuance of Class A Shares and Class B Shares in the same proportion as Class A Shares and Class B Shares represent over the share capital of the Company at the time the resolution on the capital increase is passed; (ii) grants preferential subscription rights or free allotment rights, as applicable, to the Class B Shares over the Class B Shares being issued in the capital increase in the same terms as preferential subscription rights or free allotment rights, as applicable, are granted to the Class A Shares over the Class A Shares being issued in the capital increase; and (iii) in which no other shares or securities are issued; and | (A) el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase B tendrá sólo por objeto Acciones Clase B, y el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase A tendrá sólo por objeto Acciones Clase A en todo aumento que cumpla los siguientes tres requisitos (i) que suponga la emisión de Acciones Clase A y Acciones Clase B en la misma proporción que las Acciones Clase A y Acciones Clase B representen sobre el capital social de la Sociedad al tiempo de acordarse el aumento; (ii) que reconozca a las Acciones Clase B un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre las Acciones Clase B a emitir en ese aumento en términos iguales a aquellos en que se reconozca a las Acciones Clase A un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre las Acciones Clase A a emitir en ese aumento y (iii) en el que no se emitan otras acciones o valores; y |
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(B) likewise, the preferential subscription right and the free allotment right of a Class B Share shall be only over instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares and the preferential subscription right and the free allotment right of a Class A Share shall be only over instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares in each issuance which meets the following three requirements(i) entail the issuance of instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares and instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares in the same proportion as Class A Shares and Class B Shares represent over the share capital of the Company at the time the resolution on the capital increase is passed; (ii) grants preferential subscription rights or free allotment rights, as applicable, to the Class B Shares over the instruments giving the right to purchase, convert, subscribe or otherwise receive Class B Shares being issued in such issuance in the same terms as preferential subscription rights or free allotment rights, as applicable, are granted to the Class A Shares over the instruments giving the right to purchase, convert, subscribe or otherwise receive Class A Shares being issued in such issuance; and (iii) in which no other shares or securities are issued. | (B) del mismo modo, el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase B tendrá sólo por objeto instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase B, y el derecho de suscripción preferente y de asignación gratuita de las Acciones Clase A tendrá sólo por objeto instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase A en toda emisión que cumpla los siguientes tres requisitos (i) que suponga la emisión de instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase A e instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir Acciones Clase B en la misma proporción que las Acciones Clase A y Acciones Clase B representen sobre el capital social de la Sociedad al tiempo de acordarse el aumento; (ii) que reconozca a las Acciones Clase B un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre los instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir las Acciones Clase B a emitir en esa emisión en términos iguales a aquellos en que se reconozca a las Acciones Clase A un derecho de suscripción preferente o de asignación gratuita, según corresponda, sobre los instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir las Acciones Clase A a emitir en esa emisión; y (iii) en la que no se emitan otras acciones o valores. | |||||
6.2. | Separate vote at the general shareholders meeting on Extraordinary Matters. Without prejudice and in addition to the rights provided in Article 103 of the Companies Law [Ley de Sociedades de Capital], but also in order to protect Class B Shares, resolutions of the Company on the following matters (the “Extraordinary Matters”) will require, in addition to the resolution being approved pursuant to Article 17 of these By-Laws, the approval of a majority of Class B Shares then in issue: | 6.2. | Voto separado en la junta general de accionistas respecto de Materias Extraordinarias. Sin perjuicio de lo dispuesto en el artículo 103 de la Ley de Sociedades de Capital y de forma adicional, pero también para proteger los derechos de las Acciones Clase B, los acuerdos de la Sociedad sobre las siguientes materias (las “Materias Extraordinarias”) requerirán, además de su aprobación conforme a lo dispuesto en el artículo 17 de estos estatutos, la aprobación de la mayoría de las Acciones Clase B entonces en circulación: |
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(A) Any resolution (i) authorizing the Company or any subsidiary of the Company to repurchase or acquire any Class A Shares in the Company, except for pro rata repurchases available equally to holders of Class B Shares on the same terms and at the same price as offered to holders of Class A Shares or (ii) approving the redemption of any shares in the Company and any share capital reductions (through repurchases, cancellation of shares or otherwise) other than (a) those redemptions mandatory by law and(b) those redemptions which affect equally Class A Shares and Class B Shares and in which each Class B is treated equally and on the same terms as one Class A Share in such transaction; | (A) Cualquier acuerdo (i) que autorice a la Sociedad o a cualquiera de sus filiales a recomprar o adquirir cualesquiera Acciones Clase A de la Sociedad, excepto para recompras a pro rata que se ofrezcan a los titulares de las Acciones Clase B en los mismos términos y a un precio ofrecido igual que a los titulares de Acciones Clase A o (ii) que apruebe la amortización de acciones de la Sociedad y cualquier reducción de capital (a través de recompras, cancelación de acciones o de cualquier otra forma) distintas de (a) las amortizaciones obligatorias por ley y (b) las amortizaciones que afecten por igual a las Acciones Clase A y a las Acciones Clase B, y en las que se da a cada Acción Clase B el mismo trato y se le otorgan los mismos términos que a cada Acción Clase A; | |||||
(B) Any resolution approving the issuance, granting or sale (or authorizing the Board of Directors of the Company to issue, grant or sell) (i) any shares in the Company, (ii) any rights or other securities exercisable for or exchangeable or convertible into shares in the Company or (iii) any options, warrants or other instruments giving the right to the holder thereof to purchase, convert, subscribe or otherwise receive any securities in the Company, except, for (i), (ii) and (iii),(A) if each Class B Share is treated equally as one Class A Share in the relevant issuance, grant or sale and, therefore, has preferential subscription or allotment rights in the relevant issuance, grant or sale to the same extent, if any, as a Class A Share or (B) if the issuance is made in accordance with section 6.1; | (B) Cualquier acuerdo aprobando la emisión, otorgamiento o entrega (o autorizando al consejo de administración de la Sociedad para emitir, otorgar o entregar) (i) cualesquiera acciones en la Sociedad, (ii) cualesquiera derechos u otros valores que den derecho a adquirir acciones de la Sociedad o que sean canjeables o convertibles en acciones en la Sociedad o (iii) cualesquiera opciones,warrantsu otros instrumentos que otorguen a su titular el derecho a adquirir, convertir, suscribir o de cualquier otra forma recibir cualesquiera valores de la Sociedad, excepto, en los casos (i), (ii) y (iii) anteriores, si (A) a cada Acción Clase B se le da el mismo trato en la correspondiente emisión, otorgamiento o entrega que a una Acción Clase A, y, por tanto, tiene, de haberlos, los mismos derechos de preferencia (de suscripción, de adjudicación preferente o de otro tipo) en la correspondiente emisión, otorgamiento o entrega que una Acción Clase A o (B) la emisión se hace conforme a lo establecido en el apartado 6.1 anterior; | |||||
(C) Any resolution approving unconditionally or not(i) a transaction subject to Law 3/2009 (including, without limitation, a merger, split-off, cross-border redomiciliation or global assignment of assets and liabilities), except if in such transaction each Class B Share is treated equally as one Class A Share in all respects; or (ii) the dissolution orwinding-up of the Company, except where such resolution is mandatory by law; | (C) Cualquier acuerdo aprobando incondicionalmente o no (i) una operación sometida a la Ley 3/2009 (incluyendo, sin limitación, una fusión, escisión, cambio de domicilio al extranjero o cesión global de activo y pasivo), excepto si en dicha operación cada Acción Clase B es tratada de igual manera que una Acción Clase A en todos los aspectos; o (ii) la disolución o liquidación de la Sociedad, excepto cuando el acuerdo sea obligatorio por ley; | |||||
(D) Any resolution for the delisting from any stock exchange of any shares of the Company; and | (D) Cualquier acuerdo aprobando la exclusión de cualesquiera acciones de la Sociedad de cotización o negociación en cualquier bolsa de valores o mercado secundario; y |
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(E) Generally, any resolution and any amendment of the Company’s By-Laws which directly or indirectly adversely affects the rights, preferences or privileges of the Class B Shares (including any resolution that adversely affects the Class B Shares relative to the Class A Shares or that positively affects the Class A Shares relative to the Class B Shares, or that affects the provisions in these By-laws relating to the Class B Shares). | (E) En general, cualquier acuerdo y cualquier modificación de los estatutos de la Sociedad que directa o indirectamente perjudique o afecte negativamente a los derechos, preferencias o privilegios de las Acciones Clase B (incluyendo cualquier acuerdo que perjudique o afecte negativamente a las Acciones Clase B en comparación con las Acciones Clase A o que beneficie o afecte positivamente a las Acciones Clase A en comparación con las Acciones Clase B, o que afecte a las disposiciones de estos estatutos relativas a las Acciones Clase B). | |||||
The general shareholders’ meeting has the power to decide on all matters assigned to it by the law or these By-laws and, in particular, without limitation to the foregoing, shall be the only corporate body or office entitled to decide on the matters considered “Extraordinary Matters” in this Article of the By-laws. | La junta general tiene competencia para decidir sobre todas las materias que le hayan sido atribuidas legal o estatutariamente y, en particular, a título enunciativo, será el único órgano social o cargo con competencia para decidir en las materias consideradas “Materias Extraordinarias” conforme a este artículo de estos estatutos. | |||||
6.3. | Other rights. The Class B Shares shall have the other rights provided for them in Articles 100, 102 and 103 of the Companies Law [Ley de Sociedades de Capital] and, except as set forth in this Article 6o Bis and in Articles 100, 102 and 103 of the Companies Law [Ley de Sociedades de Capital], each Class B Share entitles its holder to the same rights as one Class A Share (including the right to attend all general shareholders meetings of the Company, the right to information on the Company and the right to challenge resolutions of the Company). | 6.3. | Otros derechos. Las Acciones Clase B tienen los demás derechos reconocidos en los artículos 100, 102 y 103 de la Ley de Sociedades de Capital y, salvo lo dispuesto en este Artículo 6o Bis y en los artículos 100, 102 y 103 de la Ley de Sociedades de Capital, cada Acción Clase B atribuye a su titular los mismos derechos que una Acción Clase A (incluyendo los derechos de asistencia a las juntas generales de accionistas de la Sociedad, de información sobre la Sociedad y de impugnación de acuerdos sociales). |
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Its Managing Member
By: | CERBERUS PARTNERS, L.P., Its Managing Member | |
By: | CERBERUS ASSOCIATES, L.L.C., Its General Partner | |
By: | /s/ Mark A. Neporent |
Title: | Vice President and Chief |
By: | /s/ Tomás Dagá Gelabert |
Title: | Director |
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TALECRIS BIOTHERAPEUTICS HOLDINGS CORP. AND
STREAM MERGER SUB, INC.
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By: |
SCC IDno. 0724439-5
By: |
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OF
STREAM MERGER SUB, INC.
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MERGER BETWEEN
GRIFOLS, INC. AND
STREAM MERGER SUB, INC.
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CORPORATIONS
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By: | /s/ Lawrence D. Stern Name: Lawrence D. Stern Title: Chairman and Chief Executive Officer |
By: | /s/ Victor Grifols Name: Victor Grifols |
By: | CERBERUS-PLASMA HOLDINGS INC. Its Managing Member |
By: | CERBERUS PARTNERS, L.P. Its Managing Member |
By: | CERBERUS ASSOCIATES, L.L.C. Its General Partner |
By: | /s/ Mark A. Neoporent Name: Mark A. Neoporent Title: Vice President and Chief Operating Officer |
By: | /s/ Mark A. Neoporent Name: Mark A. Neoporent |
Title: Chief Operating Officer |
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Item 20. | Indemnification of Directors and Officers |
Item 21. | Exhibits and Financial Statements |
(a) | Exhibits |
Exhibit | ||||
Number | Description of Document | |||
2 | .1 | Agreement and Plan of Merger, dated as of June 6, 2010, by and among Grifols, S.A., Grifols, Inc. and Talecris Biotherapeutics Holdings Corp. (included as Annex A to the joint proxy statement/prospectus included in this Registration Statement) | ||
2 | .2 | Amendment No. 1 to the Agreement and Plan of Merger, dated as of November 4, 2010, by and among Grifols, S.A., Grifols, Inc. and Talecris Biotherapeutics Holdings Corp. (included as Annex B to the joint proxy statement/prospectus included in this Registration Statement) | ||
3 | .2 | Deposit Agreement among Grifols, S.A., Deutsche Bank Trust Company Americas and all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued thereunder relating to Grifols New ADSs* | ||
5 | .1 | Opinion of Osborne Clarke S.L.P. regarding the non-voting ordinary shares of Grifols* | ||
8 | .1 | Opinion of Osborne Clarke S.L.P. regarding tax matters and certain other matters* | ||
8 | .2 | Opinion of Proskauer Rose LLP regarding U.S. tax matters* | ||
10 | .1 | Voting Agreement between Grifols, S.A. and Talecris Holdings, LLC (included as Annex D to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .2 | Form of Voting Agreement between certain holders of ordinary shares of Grifols, S.A. and Talecris Biotherapeutics Holdings Corp. (included as Annex C to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .3 | Lock-up Agreement between Grifols, S.A. and Talecris Holdings, LLC (included as Annex F to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .4 | Appraisal Indemnity Agreement, dated as of November 4, 2010, by and among Talecris Biotherapeutics Holdings Corp., Grifols, S.A., and Talecris Holdings, LLC, and solely with respect to the provisions of Section 9, Cerberus Capital Management, L.P. (included as Annex M to the joint proxy statement/prospectus included in this Registration Statement) | ||
10 | .5 | Plasma Sale/Purchase Agreement, dated as of August 12, 2008, by and between CSL Plasma Inc. (f/k/a ZLB Bioplasma Inc.) and Talecris Biotherapeutics Inc. (incorporated by reference to Exhibit 10.33 of Amendment No. 7 to Talecris’ Registration Statement onForm S-1 (File No.333-144941) filed on July 21, 2009)+ | ||
10 | .6 | Amended and Restated Services Agreement, dated January 1, 2009, by and between Talecris Biotherapeutics, Inc. and Centric Health Resources, Inc. (incorporated by reference to Exhibit 10.34 of Amendment No. 9 to Talecris’ Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ |
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Exhibit | ||||
Number | Description of Document | |||
10 | .7 | Toll Manufacturing Agreement for Testing and Packaging, dated April 4, 2008, by and between Talecris Biotherapeutics, GmbH and Catalent France Limoges SAS (incorporated by reference to Exhibit 10.35 of Amendment No. 8 to Talecris’ Registration Statement onForm S-1 (File No.333-144941) filed on August 19, 2009)+ | ||
10 | .8 | Retained Intellectual Property License Agreement, dated as of March 31, 2005, by and between Bayer Healthcare LLC and Talecris Biotherapeutics, Inc. (f/k/a NPS Biotherapeutics, Inc.) (incorporated by reference to Exhibit 10.31.1 of Amendment No. 1 to Talecris’ Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 24, 2007) | ||
10 | .9 | Amendment to Retained Intellectual Property Licensing Agreement, entered into as of August 10, 2007, by and between Bayer Healthcare LLC and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.31.2 of Amendment No. 1 to Talecris’ Registration Statement on FormS-1 (FileNo. 333-144941) filed on September 24, 2007) | ||
10 | .10 | Fractionation Services and Commercial Products Agreement, dated as of April 1, 2008, between and amongst Canadian Blood Services/Societe Canadienne Du Sang, Talecris Biotherapeutics, Inc. and Talecris Biotherapeutics, Ltd. (incorporated by reference to Exhibit 10.29 of Amendment No. 9 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ | ||
10 | .11 | Fractionation Services and Commercial Products Agreement, dated as of April 1, 2008, between and amongst Héma-Québec, Talecris Biotherapeutics, Ltd. and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.30.1 of Amendment No. 9 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ | ||
10 | .12 | Amending Agreement No. 1, effective as of May 26, 2008, to Fractionation Services and Commercial Products, dated as of April 1, 2008, by and among Héma-Québec, Talecris Biotherapeutics, Ltd. and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.30.2 of Amendment No. 6 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on July 2, 2009)+ | ||
23 | .1 | Consent of Proskauer Rose LLP (included as part of its opinion filed as Exhibit 8.2 hereto)* | ||
23 | .2 | Consent of Osborne Clarke S.L.P. * | ||
23 | .3 | Consent of KPMG, Independent Registered Public Accounting Firm of Grifols | ||
23 | .4 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm of Talecris | ||
24 | .1 | Powers of Attorney of certain directors and officers of Grifols, S.A. ** | ||
99 | .1 | Form of proxy card for the Talecris special meeting of stockholders* | ||
99 | .2 | Consent of Citigroup Global Markets Inc. ** |
* | To be filed by amendment. | |
** | Previously filed. | |
+ | Portions of the exhibit have been omitted pursuant to an order granting confidential treatment dated September 30, 2009 by the Securities and Exchange Commission |
(b) | Schedules |
Item 22. | Undertakings |
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By: | /s/ Tomás Dagá Gelabert |
By: | /s/ Raimon Grifols Roura |
By: | /s/ David Ian Bell |
Signature | Title | |||
* Victor Grifols Roura | Director, Chairman of the Board of Directors, Chief Executive Officer and Managing Director (principal executive officer) | |||
* Alfredo Arroyo Guerra | Vice President and Chief Financial Officer (principal financial officer) | |||
* Montserrat Lloveras Calvo | Administrative Director and Controller (principal accounting officer) | |||
* Juan Ignacio Twose Roura | Director and Vice President | |||
* Ramón Riera Roca | Director and Vice President | |||
* Tomás Dagá Gelabert | Director | |||
* Thorthol Holdings B.V. (represented by Mr. José Antonio Grifols Gras) | Director | |||
* Thomas Glanzmann | Director |
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Signature | Title | |||
* Edgar Dalzell Jannotta | Director | |||
* Anna Veiga Lluch | Director | |||
* David Ian Bell | Authorized Representative in the United States |
* | The undersigned by signing his name hereto, signs and executes this registration statement pursuant to the Power of Attorney executed by the above named officers and directors as filed with the Securities and Exchange Commission. |
By: | /s/ Tomás Dagá Gelabert |
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Exhibit | ||||
Number | Description of Document | |||
2 | .1 | Agreement and Plan of Merger, dated as of June 6, 2010, by and among Grifols, S.A., Grifols, Inc. and Talecris Biotherapeutics Holdings Corp. (included as Annex A to the joint proxy statement/prospectus included in this Registration Statement) | ||
2 | .2 | Amendment No. 1 to the Agreement and Plan of Merger, dated as of November 4, 2010, by and among Grifols, S.A., Grifols, Inc. and Talecris Biotherapeutics Holdings Corp. (included as Annex B to the joint proxy statement/prospectus included in this Registration Statement) | ||
3 | .2 | Deposit Agreement among Grifols, S.A., Deutsche Bank Trust Company Americas and all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued thereunder relating to Grifols New ADSs* | ||
5 | .1 | Opinion of Osborne Clarke S.L.P. regarding the non-voting ordinary shares of Grifols* | ||
8 | .1 | Opinion of Osborne Clarke S.L.P. regarding tax matters and certain other matters* | ||
8 | .2 | Opinion of Proskauer Rose LLP regarding U.S. tax matters* | ||
10 | .1 | Voting Agreement between Grifols, S.A. and Talecris Holdings, LLC (included as Annex B to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .2 | Form of Voting Agreement between certain holders of ordinary shares of Grifols, S.A. and Talecris Biotherapeutics Holdings Corp. (included as Annex C to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .3 | Lock-up Agreement between Grifols, S.A. and Talecris Holdings, LLC (included as Annex G to the joint proxy statement/prospectus included in this registration statement) | ||
10 | .4 | Appraisal Indemnity Agreement, dated as of November 4, 2010, by and among Talecris Biotherapeutics Holdings Corp., Grifols, S.A., and Talecris Holdings, LLC, and solely with respect to the provisions of Section 9, Cerberus Capital Management, L.P. (included as Annex M to the joint proxy statement/prospectus included in this Registration Statement) | ||
10 | .5 | Plasma Sale/Purchase Agreement, dated as of August 12, 2008, by and between CSL Plasma Inc. (f/k/a ZLB Bioplasma Inc.) and Talecris Biotherapeutics Inc. (incorporated by reference to Exhibit 10.33 of Amendment No. 7 to Talecris’ Registration Statement onForm S-1 (File No.333-144941) filed on July 21, 2009)+ | ||
10 | .6 | Amended and Restated Services Agreement, dated January 1, 2009, by and between Talecris Biotherapeutics, Inc. and Centric Health Resources, Inc. (incorporated by reference to Exhibit 10.34 of Amendment No. 9 to Talecris’ Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ | ||
10 | .7 | Toll Manufacturing Agreement for Testing and Packaging, dated April 4, 2008, by and between Talecris Biotherapeutics, GmbH and Catalent France Limoges SAS (incorporated by reference to Exhibit 10.35 of Amendment No. 8 to Talecris’ Registration Statement onForm S-1 (File No.333-144941) filed on August 19, 2009)+ | ||
10 | .8 | Retained Intellectual Property License Agreement, dated as of March 31, 2005, by and between Bayer Healthcare LLC and Talecris Biotherapeutics, Inc. (f/k/a NPS Biotherapeutics, Inc.) (incorporated by reference to Exhibit 10.31.1 of Amendment No. 1 to Talecris’ Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 24, 2007) | ||
10 | .9 | Amendment to Retained Intellectual Property Licensing Agreement, entered into as of August 10, 2007, by and between Bayer Healthcare LLC and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.31.2 of Amendment No. 1 to Talecris’ Registration Statement on FormS-1 (FileNo. 333-144941) filed on September 24, 2007) | ||
10 | .10 | Fractionation Services and Commercial Products Agreement, dated as of April 1, 2008, between and amongst Canadian Blood Services/Societe Canadienne Du Sang, Talecris Biotherapeutics, Inc. and Talecris Biotherapeutics, Ltd. (incorporated by reference to Exhibit 10.29 of Amendment No. 9 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ | ||
10 | .11 | Fractionation Services and Commercial Products Agreement, dated as of April 1, 2008, between and amongst Héma-Québec, Talecris Biotherapeutics, Ltd. and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.30.1 of Amendment No. 9 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on September 11, 2009)+ |
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Exhibit | ||||
Number | Description of Document | |||
10 | .12 | Amending Agreement No. 1, effective as of May 26, 2008, to Fractionation Services and Commercial Products, dated as of April 1, 2008, by and among Héma-Québec, Talecris Biotherapeutics, Ltd. and Talecris Biotherapeutics, Inc. (incorporated by reference to Exhibit 10.30.2 of Amendment No. 6 to our Registration Statement onForm S-1 (FileNo. 333-144941) filed on July 2, 2009)+ | ||
23 | .1 | Consent of Proskauer Rose LLP (included as part of its opinion filed as Exhibit 8.2 hereto)* | ||
23 | .2 | Consent of Osborne Clarke S.L.P. * | ||
23 | .3 | Consent of KPMG, Independent Registered Public Accounting Firm of Grifols | ||
23 | .4 | Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm of Talecris | ||
24 | .1 | Powers of Attorney of certain directors and officers of Grifols, S.A. ** | ||
99 | .1 | Form of proxy card for the Talecris special meeting of stockholders* | ||
99 | .2 | Consent of Citigroup Global Markets Inc. ** |
* | To be filed by amendment. | |
** | Previously filed. | |
+ | Portions of the exhibit have been omitted pursuant to an order granting confidential treatment dated September 30, 2009 by the Securities and Exchange Commission |