Angiotech to Establish Separate Operating and Royalty ...(ies a total equity value for API ...)

value for API of $625 million, assuming $75 million in cash and cash

equivalents at API at closing and no debt, other than the guarantees

of the remaining amounts of Angiotech's two existing debt issues. The

proposed transaction at this value enables Angiotech to raise a

significant amount of capital to address the Company's current

capital structure issues with more limited dilution than would likely

be possible if Angiotech were to attempt to raise similar amounts of

capital using security structures available to Angiotech on a

consolidated basis.

- Flexible transaction size to optimize use of capital. Angiotech

expects to raise a minimum of US$200 million in gross proceeds

through this transaction. Depending upon the interest level in the

contemplated tender offers for Angiotech's two outstanding debt

issues, the Company may elect to raise up to US$300 million. This

transaction structure allows Angiotech the flexibility to elect to

raise a variable amount of capital, at the Company's option,

depending on the expected cost of retiring selected amounts of each

outstanding debt issue.

- Align capitalization with business risk, strategy and structures. By

forming and capitalizing API, Angiotech has established a plan to

achieve a more equity oriented capital structure for its operating

businesses, more consistent with its original strategy and with peer

companies in the life sciences industry. With the opportunity to

pursue an initial public offering of API in the future, or other

financial and strategic alternatives together with Ares and New Leaf,

API will have improved financial flexibility, enabling API to better

capitalize on its various business and product development

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