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View Case StudyDecember 19, 2006
GlaxoSmithKline Completes Acquisition of CNS, Inc.
GSK adds innovative, high-growth Breathe Right and
FiberChoice brands to Consumer Healthcare portfolio
PR Newswire, All Rights Reserved, Factiva, Inc. All Rights Reserved

PHILADELPHIA — GlaxoSmithKline (LSE: GSK) (NYSE: GSK) today announced that it has completed the acquisition of CNS, Inc. (Nasdaq: CNXS), the marketers of Breathe Right® nasal dilator strips and FiberChoice® 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 company's 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. GSK's 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.

CNS' Brands
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 (10%). (1)

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 States:
  • Australia
  • Austria
  • Belgium
  • Canada
  • Cyprus
  • Denmark
  • Finland
  • France
  • Germany
  • Greece
  • Hungary
  • Hong Kong
  • Japan
  • Italy
  • Luxemburg
  • Mexico
  • Netherlands
  • New Zealand
  • Norway
  • Poland
  • Portugal
  • South Africa
  • Spain
  • Sweden
  • Switzerland
  • 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® nasal strips and FiberChoice® dietary fiber supplements. The company focuses on products that address important consumer needs within the self-care market, including better breathing and digestive health.

About GlaxoSmithKline
GlaxoSmithKline — one of the world's 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 world's largest over- the-counter consumer healthcare products companies. Its more than 30 well- known brands include the leading smoking cessation products, Nicoderm® CQ® and Commit®; many medicine cabinet staples including Panadol®, Abreva®, Aquafresh®, Sensodyne® and Tums®; and nutritional healthcare products such as Lucozade®, Horlicks® and Ribena®.

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:
  • Colds
  • Allergies
  • Deviated Septum
  • Sinusitis
     
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.

About FiberChoice
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 brand's 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.
 
 
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