aap Holds Takeover Talks for Dutch FAME Medical Group

aap Implantate AG, a medical technology company listed in the Frankfurt Stock Exchange’s Prime Standard segment and specialized in biomaterials and implants for traumatology and orthopedics, has agreed in a letter of intent on the main features of a merger with Dutch biomaterials group FAME Medical, including its subsidiaries EMCM (European Medical Contract Manufacturing), Bactimm, TPI (Tissue Processing International) and FMP (Fame Medical Products).

The transaction, which is subject to the findings of reciprocal due diligence, to approval by the general meeting of aap Implantate AG shareholders, and to exemption from a takeover bid, will probably take the form of a contribution of shares in the FAME Group to aap and thereby be a pure share transaction. The present temporary exchange ratio being 1 to 2, FAME Group shareholders would on completion of the transaction hold around 33% of aap stock.

The intention is to complete the transaction after approval by an extraordinary meeting of aap shareholders that has yet to be convened but will probably be held in Q1 2007 with the merger being retroactive from January 1, 2007.

aap’s biomaterials division, which already accounts for 70% of aap Group sales revenues, and the FAME companies to a very large extent do business in the same segments (bone cements, bone graft substitutes, tissue processing & regeneration), but do so with a complementary product range. The two companies have collaborated for several years. The alliance of the two will create a leading European biomaterials company that is focused, with a comprehensive product range, on development, production and clinical marketing in cooperation with international sales partners. Both companies have a well-filled pipeline with promising and complimentary products to be approved and introduced to the market within the upcoming quarters.

The FAME Group’s 2005 sales revenues were € 7.6 million (aap 2005: € 13.3 million) and it’s EBIT and results structure to IFRS is comparable with aap’s. For the coming years FAME expects an solid double-digit organic growth.

Both companies stand to realize from the transaction considerable synergy potentials in R&D, production and sales. For 2007 aap expects to be able to report the first positive profits contributions from this transaction.