Patheon announces cash tender offer for all outstanding 8.625% Senior Secured Notes

Patheon Inc. (TSX: PTI) (the "Company"), a leading provider of contract development and manufacturing services to the global pharmaceutical industry, announced today that it is commencing a cash tender offer for any and all of its outstanding 8.625% Senior Secured Notes due 2017 (CUSIP Numbers 70319W AA6 (Rule 144A) and C7197E AA2 (Regulation S)) (the "Notes"), upon the terms and subject to the conditions set forth in the Offer to Purchase, dated the date hereof (as it may be amended or supplemented from time to time, the "Offer"), and in the related Letter of Transmittal (as it may be amended or supplemented from time to time, the "Letter of Transmittal" and, collectively with the Offer, the "Offer Documents").  The Company intends to use the proceeds from the proposed new debt financing, announced on October 29, 2012, to fund the tender offer or redeem any and all Notes that remain outstanding after consummation of the tender offer and to repay all outstanding borrowings under the Company's existing revolving credit facility and, together with proceeds from the rights offering announced on November 19, 2012 and available cash, to pay the purchase price for the proposed acquisition of Banner Pharmacaps from VION Holdings N.V., and to pay related fees and expenses associated with the transactions.  Any remaining proceeds will be used for general corporate purposes.

The early tender deadline is 5 p.m., New York City time, on December 7, 2012 (such time and date, as it may be extended, the "Early Tender Deadline"), and the tender offer will expire at 12 midnight, New York City time, on December 21, 2012 (such time and date, as it may be extended, the "Expiration Time"), in each case, unless earlier terminated by the Company.  Notes tendered may be withdrawn at any time at or before 5 p.m., New York City time, on December 7, 2012 (such time and date, as it may be extended, the "Withdrawal Deadline") but not thereafter, except as required by law.  The Company may extend the Early Tender Deadline without extending the Withdrawal Deadline.

The total consideration for each $1,000 principal amount of Notes validly tendered at or before the Early Tender Deadline and purchased pursuant to the tender offer will be $1,085.07, which includes a payment of $50 per $1,000 principal amount of Notes payable only in respect of Notes tendered at or before the Early Tender Deadline (the "Early Tender Payment").  Holders validly tendering Notes after the Early Tender Deadline but at or before the Expiration Time will be eligible to receive only the tender offer consideration of $1,035.07 per $1,000 principal amount of Notes, namely an amount equal to the total consideration less the Early Tender Payment.  In addition, holders whose Notes are purchased in the tender offer will receive accrued and unpaid interest in respect of their purchased Notes from the last interest payment date to, but not including, the applicable payment date for the Notes.  Tenders of Notes will be accepted only in principal amounts of $2,000 or integral multiples of $1,000 in excess thereof.

The Company has reserved the right, at any time following the Early Tender Deadline but prior to the Expiration Time, to accept for purchase all Notes validly tendered and not validly withdrawn.  If the Company elects to exercise this option, the Company will pay the total consideration or tender offer consideration, as the case may be, for the Notes accepted for purchase promptly following the acceptance of Notes for purchase (the date of such payment being referred to as the "Initial Payment Date").

Subject to the terms and conditions of the tender offer being satisfied or waived, the Company will, promptly after the Expiration Time, accept for purchase all Notes validly tendered at or before the Expiration Time (and not validly withdrawn at or before the Withdrawal Deadline) (or if the Company has exercised its early purchase option as described above, all Notes validly tendered after the Initial Payment Date and at or before the Expiration Time).  The Company will pay the total consideration or tender offer consideration, as the case may be, for such Notes (the date of such payment being referred to as the "Final Payment Date").

The Company's obligation to consummate the tender offer is subject to the satisfaction or waiver of certain conditions, which are more fully described in the Offer, including, among others, (i) the Company having completed financing transactions in an amount and on terms satisfactory to it, in its sole discretion and (ii) the general conditions described in the Offer having been satisfied.