Merus Labs Int'l (MSLI) Enters Acquisition Deal with Sanofi (SNY) for Rights on Certain Products in France

Merus Labs International Inc. (Nasdaq: MSLI) announced that it has entered into an agreement with Sanofi S.A. to acquire the rights to Surgestone®, Provames®, Speciafoldine®, and Tredemine® in France.

Surgestone® and Provames®, are used in a variety of women's health indications, Speciafoldine® is used to treat macrocytic anemia, while Tredemine® is a World Health Organization recognized essential medicine to treat tapeworm.

"We have acquired nine established products over the last ten months and continue to leverage our scalable commercial platform in Europe" stated Barry Fishman, Chief Executive Officer.

Acquisition Benefits

• Established prescription products with proven safety and efficacy, and predictable future cash flow.
• Expands and leverages existing commercial platform in France, Europe's second largest pharmaceutical market after Germany.

Transaction Highlights

• Merus acquired the product rights for a one-time payment of €22.5 million. Net revenue for the products in 2016 is expected to be approximately €6.3 million.
• At current exchange rates, the products are expected to generate approximately $5.6 million in annual EBITDA, reflecting an EBITDA margin of almost 60%.
• The acquisition is expected to be funded with one third debt and two thirds equity - lowering our overall leverage to approximately 2.8 times, right within our stated leverage target range of 2.5 to 3.0.
• All closing conditions under the purchase agreement, other than payment of the purchase price, have been satisfied. The acquisition is expected to close during the second week in March 2016.

Increased Fiscal 2016 Guidance

• Revised guidance for adjusted EBITDA during the fiscal year ending September 30, 2016 (post-deal) is expected to be in the range of $47 million to $50 million.

Additional Information

Please refer to the home page of our web site to access the presentation called Acquisition Update: Sanofi Products.

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