Japan’s Sawai Pharmaceutical to Acquire the Generics Business of U.S. Upsher‐SmithLaboratories
Building a Global Trusted Generics Company[April 20, 2017, Tokyo and Minnesota] Sawai Pharmaceutical Co. Ltd. (“Sawai”), a leading Japanese genericpharmaceuticals manufacturer, and Upsher‐Smith Laboratories, Inc., (“Upsher‐Smith”), an establishedgenerics manufacturer based in Minnesota, U.S., today announced the signing of an agreement for Sawai
to acquire the generic pharmaceuticals business of Upsher‐Smith, from its parent, ACOVA Inc., (“ACOVA”).
Upsher‐Smith is a privately‐held U.S. pharmaceutical company, owned by the Evenstad family through theircompany, ACOVA. Mark Evenstad is the CEO of Upsher‐Smith, and his father, Ken Evenstad is the Chairman.
Upsher‐Smith has a diversified product portfolio of over 30 pharmaceutical products, mainly oral solid
preparations, and a strong pipeline of over 30 products.
Under the agreement signed today, Sawai will acquire all the equity interest in the generic pharmaceuticals
business of Upsher‐Smith from ACOVA, for consideration of $1.05 billion. The transaction will be financedby bank loans and available cash. It is expected to close by the end of June 2017, subject to customary
regulatory approvals. Rusty Field, the current President of Upsher‐Smith, will continue leading thecompany. Following the closing, Upsher‐Smith’s non‐generic pharmaceuticals businesses will remain withACOVA.
The acquisition will mark a major expansion of Sawai’s presence in the U.S. market. Moving forward, Sawai
plans to build a US business that leverages its intellectual property and combines R&D capabilities with
Upsher‐Smith’s manufacturing base, strong distribution network, established commercial relationships andhighly respected brand. For Upsher‐Smith, the acquisition brings access to Sawai’s state‐of‐the art
manufacturing technology and opportunities to bring its medicines to exciting new markets, like Japan.
Since its founding in 1919, Upsher‐Smith has been committed to delivering high‐value, high‐quality
pharmaceuticals that measurably improve individuals’ lives. Upsher‐Smith offers a broad array of genericand branded medications, and through its pharmacist heritage, has built excellent, long‐standing
relationships with pharmacies, wholesalers, retailers and healthcare organizations to distribute its products.
“Upsher‐Smith has developed and delivered crucial therapies to patients, from infants to the elderly, with abroad array of on‐market generic pharmaceuticals. We have also built a pipeline that will enable even morepatients to get life‐changing therapies over the next several years. After owning and operating Upsher‐
Smith for the past 47 years, my family and I made the decision to sell the largest part of our company, thegeneric pharmaceuticals business, to Sawai,” said Mark Evenstad, CEO. “It was extremely important for usto find a buyer that shared Upsher‐Smith’s values, was completely committed to its long‐term success andwas looking for a strong and fully operational U.S. platform for growth. Sawai is a compelling strategic fit
and we are delighted that the generics business is poised to benefit from the extensive resources andmanagement focus that Sawai will bring.”
With the aging Japanese population, and the increasing focus on bringing down the cost of medicines, in2015 the Japanese government set a target of raising the share of generic prescriptions to 80% by fiscal
20201. In August 2016, Sawai announced in its Medium‐term Business Plan, “M1 Trust 2018”, focused onproviding a stable supply of generics to meet this government goal and maintaining its undisputed number
1Japan’s “Honebuto Policy 2015”, confirmed by the Abe Cabinet in June 2015.

1|Pageone position among manufacturers of generic medicines. As part of this medium‐term business plan, Sawai
spelled out its intent to target the U.S., the world’s largest pharmaceutical market, for expansion.
“We are delighted to sign this agreement today with ACOVA to acquire Upsher‐Smith, which is our firstoverseas investment. Upsher‐Smith, like Sawai, has a long history as a private family‐owned genericpharmaceuticals company that is also focused on patient needs, centered on our philosophy of “PatientsFirst”. We look forward to working closely with Rusty and the talented management team to forge a new
global chapter in Upsher‐Smith’s future together. Most importantly, we are committed to the entire teamat Upsher‐Smith, and to expanding the opportunities for the U.S. workforce at Upsher‐Smith,” said Sawai
President Mitsuo Sawai.
Rusty Field, President, Upsher‐Smith added, “We all want to thank the Evenstad family for their excellent
stewardship of the company. I speak for the entire management team when I share how excited we are tobe entering a new phase of our growth as a global company. In the dialogue we have had with the Sawai
management team over recent months, it is clear that our two companies are an excellent fit in terms ofphilosophy and vision, with an equal focus on the importance of quality. Together we look forward toachieving recognition as a global contributor to the growth of generics, with a firm grounding in ‘PatientsFirst’.”No changes to Upsher‐Smith’s operations are currently anticipated, and under the leadership of Rusty Field,
the current management team will continue to lead Upsher‐Smith from its current headquarters inMinneapolis.
There will be no effect from this transaction on Sawai’s consolidated business forecast for the fiscal year
ending March 31, 2017. Sawai will announce any impact on business results for the fiscal year ending
March 31, 2018 when these details are confirmed.
Sawai’s financial advisors are Torreya Partners LLC and SMBC Nikko Securities Inc., and legal counsel isDebevoise & Plimpton LLP. J.P. Morgan Securities LLC and BMO Capital Markets served as financial advisors
to Upsher‐Smith and Lindquist & Vennum LLP served as legal counsel to Upsher‐Smith.
‐Ends‐For further information please contact:
Sawai, Japan: Edelman Japan, Deborah Hayden or Ayako Okamoto on +813‐4360‐9000, or via e‐mail:deborah.hayden@edelman.com; ayako.okamoto@edelman.com.
Upsher‐Smith: Contact: Elizabeth Likely, Kovak‐Likly Communications, 203‐762‐8833, elikly@klcpr.com

2|PageAbout Sawai Pharmaceuticals Co., Ltd.
Sawai Pharmaceutical Co., Ltd. was founded in 1929 by Hanpei and Noyo Sawai as Sawai Pharmacy in Osaka, Japan.
The pharmacy was rare in this era and contributed to the health of the local residents by selling drugs. After
experiencing a shortage of medicines during the periods before, during and after the Second World War, in order to
respond to social needs, Sawai Pharmaceutical Co., Ltd., began the mass manufacture of pharmaceuticals. In 1965,
the company moved into the manufacture of ethical pharmaceuticals, and subsequently grew into a leading company
in the generic pharmaceutical industry. Based on its corporate philosophy "It’s always ‘Patients First’”, since 1997
Sawai has been working on improving the recognition of generic drugs through an aggressive marketing campaign.
Sawai focuses on the manufacturing and sales, export and import of generic pharmaceutical products. Sawai has aline‐up of around 690 ethical pharmaceuticals, such as cardiovascular drugs, antihyperlipidemic agents, diabetes
drugs, anticancer drugs, and OTC drugs. With factories throughout Japan, Sawai is the number one provider ofgenerics to the Japanese market. It listed on the First Section of the Tokyo Stock Exchange in 2003 and trades underthe 4555 code. For further information please visit: http://www.sawai.co.jp/en/

About Upsher‐Smith
Upsher‐Smith Laboratories, Inc., founded in 1919 by pharmacist, Frederick Alfred Upsher Smith, is a growing, fully
integrated pharmaceutical company dedicated to its mission of delivering high‐value, high‐quality therapies andsolutions which measurably improve individuals’ lives. As a family‐owned pharmaceutical company, Upsher‐Smith isable to adapt and thrive in a dynamic healthcare environment. The pharmaceutical world is constantly evolving, andwe are continually adapting to the ever‐changing needs of patients, physicians, pharmacists, and healthcareorganizations. Where there is a need, Upsher‐Smith will work to deliver solutions that simplify access to treatment,deliver better health outcomes, and enhance life. For more information, please visit: www.upsher‐smith.com.

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