Aspen to divest Asia Pacific operations in R26.5 billion value unlocking deal
Aspen Pharmacare has announced a major R26.5 billion transaction that will see its Asia Pacific business sold to Australian private investment firm BGH Capital as the group sharpens its strategic focus and reduces debt.
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JSE listed Aspen Pharmacare Holdings Limited has announced a proposed divestment of its Asia Pacific business excluding China in a transaction valued at R26.5 billion, marking a significant strategic move for the global pharmaceutical group.
The group confirmed that through its wholly owned subsidiary Aspen Global Incorporated it has entered into binding agreements for the sale of 100% of its equity interests and intellectual property assets in Australia, New Zealand and selected Asia Pacific markets to Australian based private investment firm BGH Capital. The transaction will be implemented via two special purpose companies.
The sale includes entities and assets in Australia, New Zealand, Hong Kong, Malaysia, Taiwan and the Philippines, along with the relevant intellectual property commercialised across the region.
The total unadjusted consideration amounts to AUD 2.37 billion or approximately R26.47 billion on a cash and debt free basis.
This represents an enterprise value to normalised EBITDA multiple of around 11 times for the 2025 financial year.
The final consideration will be subject to standard adjustments related to net cash or debt items and working capital at completion.
Aspen said it was not actively seeking to sell the Asia Pacific business but received an unsolicited approach from BGH Capital. Following a review by the boards of Aspen Global Incorporated and Aspen Pharmacare Holdings, the group invited BGH Capital to submit a binding offer.
After detailed assessment, the boards concluded that the proposed transaction offers compelling value to shareholders.
In line with Aspen capital allocation strategy, the net proceeds will primarily be used to reduce debt and optimise the group capital structure. This is expected to significantly lower financing costs and simplify the group lender base, while also allowing Aspen to focus more sharply on its core strategic growth drivers.
Stephen Saad, Aspen Group chief executive, said the transaction supports the company long term objectives.
“This transaction is aligned with our strategic objectives and represents a compelling proposition for the Group and its shareholders. It allows us to unlock value from Aspen APAC, improves balance sheet flexibility and provides an enhanced foundation to execute on our growth strategy, and to drive value and returns for shareholders,” Saad said.
The transaction remains subject to the fulfilment or waiver of conditions precedent typical for a deal of this nature.
Aspen confirmed that the senior leadership team in the Asia Pacific business will remain in place throughout the transition to ensure stability and continuity. Day to day operations and current employment conditions are expected to continue as normal.
BGH Capital said it sees strong growth potential in the business.
Robin Bishop, founding partner at BGH Capital, said the acquisition represents a strategic opportunity for the firm.
“This is an important acquisition for BGH Capital and we look forward to partnering with the Aspen APAC team. We recognise the vital role Aspen APAC plays in improving the health and quality of life in the communities it serves, and we are excited about the opportunity to invest in Aspen APAC and grow it across the region,” Bishop said.
The divestment marks a key step in Aspen broader strategy to streamline operations, strengthen its balance sheet and position the group for sustainable long term growth.
BUSINESS REPORT