GlaxoSmithKline Completes Acquisition of CNS, Inc.
Tuesday, December 19, 2006 2:18:00 PM ET
GlaxoSmithKline (LSE: GSK)
(GSK ) today announced that it has completed the acquisition of CNS, Inc.
(CNXS ), the marketers of Breathe Right(R) nasal dilator strips and
FiberChoice(R) dietary fiber supplements.
Following CNS shareholder approval today, GSK has acquired all outstanding
CNS shares for $37.50 in cash per share, valuing the transaction at
approximately $566 million.
CNS, based in Minneapolis, Minnesota, USA, reported sales of $122.2
million for the twelve month period ended September 30, 2006, an increase of
20% over the previous 12-month period ended September 30, 2005. The US market
generates 86% of the companys sales. Breathe Right branded products are
marketed in 27 countries (see list at the end of press release). FiberChoice
fiber supplements are marketed solely in the US.
Commenting on the transaction, John Clarke, President, GSK Consumer
Healthcare, said, "We are very pleased to welcome this outstanding business
into the GSK Consumer Healthcare family. CNS is a well-managed company, and
its brands fit with our growth strategy and are great additions to our
portfolio. The opportunity for growth through geographic expansion and
pipeline innovation makes this acquisition an exciting prospect."
Marti Morfitt, President and CEO of CNS also commented on the transaction,
"I am very proud of our achievements at CNS and the success we have built
around our brands, and am pleased that our good work will continue with GSK as
these brands realize their worldwide potential. GSKs professionalism, with
their track record of successfully integrating brands and people, will allow
for even greater successes for Breathe Right and FiberChoice."
Breathe Right strips are the leading nasal dilator strips worldwide, and
FiberChoice is the fastest growing line of dietary fiber supplements in the
United States. Both brands are supported by patents in the U.S. and key
markets worldwide, and by scientific evidence for their product claims. The
sales growth of the Breathe Right brand and the FiberChoice brand is driven by
consumer insights and a focused strategy that has been very successful. The
Breathe Right brand has delivered 12% and the FiberChoice brand 54% compound
annual sales growth over the past three years. For GSK, the transaction will
be neutral to earnings in 2007, and accretive from 2008.
The Breathe Right brand features a line of nasal dilator strips and a line
of snore relief products that are taken orally. Breathe Right strips treat
snoring and nasal congestion caused by colds (94% people), allergies (69%
people), snoring (50% people), sinusitis (19% people), and deviated septum
The FiberChoice brand offers a line of chewable fiber supplements with a
Fiber for Health positioning. FiberChoice is the fastest growing brand of
fiber supplements. FiberChoice is currently sold in the US only.
Breathe Right is sold in the following markets outside of the United
Cyprus New Zealand
Germany South Africa
Hong Kong Switzerland
Japan United Kingdom
For more information about these brands, see attachment.
(1) US AC Nielsen Marketing Mix Study, February 13, 2006
About CNS, Inc.
CNS, based in Minneapolis, designs and markets consumer healthcare
products including Breathe Right(R) nasal strips and FiberChoice(R) dietary
fiber supplements. The company focuses on products that address important
consumer needs within the self-care market, including better breathing and
GlaxoSmithKline -- one of the worlds leading research-based
pharmaceutical and healthcare companies -- is committed to improving the
quality of human life by enabling people to do more, feel better and live
longer. For company information, visit www.gsk.com.
About GlaxoSmithKline Consumer Healthcare
GlaxoSmithKline Consumer Healthcare is one of the worlds largest over-
the-counter consumer healthcare products companies. Its more than 30 well-
known brands include the leading smoking cessation products, Nicoderm(R) CQ(R)
and Commit(R); many medicine cabinet staples including Panadol(R), Abreva(R),
Aquafresh(R), Sensodyne(R) and Tums(R); and nutritional healthcare products
such as Lucozade(R), Horlicks(R) and Ribena(R).
Caution Regarding Forward-Looking Statements
Under the safe harbor provisions of the US Private Securities Litigation
Reform Act of 1995, GlaxoSmithKline cautions investors that any forward-
looking statements or projections made by GlaxoSmithKline, including those
made in this announcement, are subject to risks and uncertainties that may
cause actual results to differ materially from those projected. Factors that
may affect the Groups operations are described under Risk Factors in the
Operating and Financial Review and Prospects in GlaxoSmithKlines Annual
About Breathe Right
The $100MM Breathe Right brand offers a growing range of drug free, better
breathing and snoring solutions. Consumers looking for nighttime nasal
congestion relief have made Breathe Right nasal strips a Top 10 Cough/Cold
brand at retailers across the US.
Consumers looking for snore relief solutions have made Breathe Right Snore
Relief Throat spray and rinse one of the fastest growing new product lines in
retailers across the US, with sales doubling over the past 6 months.
The FDA approved Breathe Right nasal strips are a class one medical device
offering clinically proven relief from nasal congestion due to:
Breathe Right nasal strips are also the ONLY clinically proven FDA
treatment for snore relief due to nasal congestion. Breathe Right nasal
strips utilize a proprietary 3M adhesive that ensures consistent consumer
experience and makes Breathe Right nasal strips superior to PL competition
across all skin types.
The FiberChoice line of Fiber Supplements is the fastest growing brand in
the $350MM bulk fiber category. FiberChoice is also the #1 brand in the non-
powder segment of the category.
The FiberChoice brands unique "Fiber for Health" positioning has
resonated with consumers who are looking for a good tasting, convenient way to
supplement their daily fiber intake. Research indicates that dietary fiber
plays a role in reducing the risk of some serious conditions such as high
cholesterol, heart disease, colon disease, and diabetes.
Retailers view FiberChoice as the category innovator as the recent
introduction of value-added fortified fiber items like FiberChoice Weight
Management and FiberChoice plus Calcium are among the fastest selling items in
the entire category.
With 3 consecutive years of 50% growth, FiberChoice will soon become the
#1 brand in the category and retailers are eager to include FiberChoice in
their own consumer heath initiative.
SOURCE GlaxoSmithKline Consumer Healthcare
GSK Enquiries, UK Media enquiries, Philip Thomson, Gwenan Evans, or Alice Hunt,
+44-020-8047-5502, or US & Canada Media enquiries, Brian Jones, +1-215-751-3415,
or Malesia Dunn, +1-412-200-3544, or Patricia Seif, +1-215-751-7709, or European
Analyst-Investor enquiries, Anita Kidgell, +44-020-804-5542, or Jen Hill,
+44-020-8047-5543, or David Mawdsley, +44-020-8047-5564, or US Analyst-Investor
enquiries, Frank Murdolo, +1-215-751-7002, or Tom Curry, +1-215-751-5419; or CNS
Enquiries, Media enquiries, Marti Morfitt, CEO, CNS, +1-952-229-1500, or
Analyst-Investor enquiries, Sam Reinkensmeyer, CFO, CNS, +1-952-229-1510