ICU Medical : Smiths Medical Acquisition Call Presentation

ICU Medical Inc. to Acquire Smiths Medical

September 8, 2021

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Cautionary Statements Regarding Forward-Looking Information & GAAP to Non-GAAP Financial Measures

• This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and may often be identified by the use of words such as "will", "may", "could", "should", "would,", "project", "believe", "anticipate", "expect", "plan", "estimate", "forecast", "potential", "intend", "continue", "target", "build", "expand" or the negative thereof or comparable terminology, and may include (without limitation) information regarding the company's expectations, goals or intentions regarding the future, including, but not limited to, the proposed transaction, the expected timetable for completing the transaction, benefits and synergies of the combined businesses or the transaction, future opportunities for the company and products and any other statements regarding the company's and the combined business's future operations, anticipated business levels, future earnings, planned activities, anticipated growth, market opportunities, strategies, competition, and other expectations and targets for future periods.
• These forward-looking statements are based on management's current expectations, estimates, forecasts and projections about the company and the proposed transaction and assumptions management believes are reasonable, all of which are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to, the parties' ability to consummate the transaction, including Smiths' ability to terminate the transaction; the regulatory approvals required for the transaction not being obtained, or not being obtained on the terms expected or on the anticipated schedule; the other conditions to the completion of the transaction not being obtained; the impact of the ongoing COVID-19 pandemic, decreased demand for the products of the Company or Smiths Medical; decreased free cash flow; the inability to recapture conversion delays or part/resource shortages on anticipated timing, or at all; changes in product mix; increased competition from competitors; lack of continued growth or improving efficiencies; unexpected changes in the company's arrangements with its largest customers; the parties' ability to meet expectations regarding the timing, completion and accounting and tax treatments of the transaction; changes in relevant tax and other laws; inherent uncertainties involved in the estimates and judgments used in the preparation of financial statements, and the providing of estimates of financial measures, in accordance with GAAP and related standards or on an adjusted basis; the integration of the acquired business by the company being more difficult, time-consuming or costly than expected; operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers, clients or suppliers) being greater than expected following the transaction; the retention of certain key employees of the business being difficult; the company's and the business's expected or targeted future financial and operating performance and results; the scope, timing and outcome of any ongoing legal proceedings and the impact of any such proceedings on the company's and the business's consolidated financial condition, results of operations or cash flows; the company's and the business's ability to protect their intellectual property and preserve their intellectual property rights; the effect of any changes in customer and supplier relationships and customer purchasing patterns; the ability to attract and retain key personnel; changes in third-party relationships; the impacts of competition; changes in economic and financial conditions of the company's business or the Smiths Medical business; uncertainties and matters beyond the control of management; and the possibility that the company may be unable to achieve expected synergies and operating efficiencies in connection with the transaction within the expected time-frames or at all and to successfully integrate the Smiths Medical business.

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Cautionary Statements Regarding Forward-Looking Information & GAAP to Non-GAAP Financial Measures

• For more detailed information on the risks and uncertainties associated with the company's business activities, see the risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the "SEC") and in any subsequent filings with the SEC. You can access the Company's Form 10-K and other filings through the SEC website at www.sec.gov, and the company strongly encourages you to do so. The company undertakes no obligation to update any statements herein for revisions or changes after the date of this communication.
• This presentation contains financial measures that are not calculated in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP financial measures should be considered supplemental to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Our Management believes that the non-GAAP data provides useful supplemental information to management and investors regarding our performance and facilitates a more meaningful comparison of results of operations between current and prior periods.
• Our non-GAAP financial measures include revenue presented on a constant currency basis, which uses the average exchange rate for revenues from the prior year applied to the current year results.
• ICU Medical is not providing reconciliations for the non-GAAP financial projections included on slides 11 and 12 of this presentation involving Smiths Medical because we are unable to provide meaningful or accurate calculation or estimation of reconciling items. This is due to Smiths Medical financial information not being presented in accordance with US GAAP and the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliations, including net income (loss), depreciation & amortization expense, impairment charges, gains or losses on retirement of debt, and variations in effective tax rate, which are difficult to predict and estimate and are primarily dependent on future events but which are excluded from ICU Medical's calculation of Non-GAAP EBITDA and EPS.

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Strategic Rationale and Industrial Logic

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• Approximately $2.5 billion in combined revenues
• Nearly 15,000 employees worldwide
• Significant focus and scale in Infusion Therapy globally

• Complementary product portfolios joined to create a leading IV therapy company and simplify customer workflow
• Addition of logical adjacencies to expand addressable markets
• Unites two OUS operating footprints into a scaled global company
• Creates a leading US-domiciled company to add diversity and resiliency to the medical supply chain
• Allows for multiple growth vectors through appealing products across hospital, alt site, pharmacy, and home
• Leverages significant investment into integration and infrastructure created with Hospira Infusion Systems acquisition

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Transaction Highlights

Overview

and

Considerations

• ICU Medical will acquire Smiths Medical for approx. $2.35 billion of upfront equity value
• Full consideration to include:
• • $1.85 billion in upfront cash and assumption of certain obligations (leases, known required investments, etc.)
  • 2.5 million newly issued shares of ICU Medical common stock
  • $100 million earn-out depending on ICU Medical stock price return
• Expected to close in H1 2022 subject to customary closing and regulatory approvals

Why this Format?

Smiths

Ownership

• ICU Medical provided an alternative transaction to Smiths Group after the Smiths Medical transaction was announced on August 2, 2021
• ICU Medical believed the establishment of clear value allowed for opportunity to engage in constructive dialogue with Smiths Group
• 2.5 million shares are subject to a six-month lock-up, however, the UK tax regime incentivizes Smiths to hold for at least one year
• $100 million earn-out requires Smith Group to be holding at least 50% of 2.5 million shares. Term requires ICU Medical stock price must average $300 for any 30-day period over years 1-3 or 45-dayperiod in year 4
• Smiths Group has the right to appoint one Director to ICU Medical Board of Directors

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