8 August 2018: UDG Healthcare plc ("the Group"), a leading international healthcare services provider, announces the sale of its Aquilant division to H2 Equity Partners, a European private equity firm, for a total potential net consideration of up to €23 million (approximately $27 million).
Aquilant is a leading distributor of specialist medical, pharmaceutical and scientific products and services, including outsourced sales, marketing, distribution and engineering services to clients in the Republic of Ireland, the UK and the Netherlands. Aquilant represented approximately 4% of UDG Healthcare’s operating profits in the six-month period ended 31 March 2018.
Following the disposal of the Group’s United Drug Supply Chain businesses to McKesson in April 2016, the Group has now exited all of its lower margin distribution businesses. In line with the Group’s strategy, proceeds from the transaction will be used to fund the continued development of the Group’s higher growth and higher margin divisions, Ashfield and Sharp.
Under the terms of the transaction, the total proceeds receivable by the Group will be up to €23 million. This comprises an initial cash consideration payment of €20.5 million and deferred consideration of up to a further €2.5 million, payable in cash, based on the achievement of gross profit targets by Aquilant in FY18 and FY19.
The Group will recognise an impairment charge of approximately $10 million on the asset value of Aquilant as at 31 March 2018. The Group will also recognise a charge of approximately $34 million relating to the recognition of accumulated foreign exchange losses held in equity*.
For the year ended 30th September 2017, Aquilant generated net revenue of $96.3 million and operating profit of $6.4 million and had gross assets of $126.5 million.
Commenting on the announcement, Brendan McAtamney, CEO of UDG Healthcare plc, said: “We are pleased to announce the sale of Aquilant to H2 Equity Partners. This transaction will provide new opportunities for Aquilant employees and I’d like to extend my thanks to all employees of Aquilant for their ongoing commitment to the business and, on behalf of the Board, I wish them every success in the future.
The sale of Aquilant is consistent with the Group’s strategy to focus on its higher growth, higher margin international healthcare services businesses.”
*These exchange differences arose from the translation of the net assets of the Aquilant business, denominated in Euro and Sterling, to US dollars in each reporting period. As these exchange differences were previously recognised in the Group’s other comprehensive income and the foreign exchange reserve, this charge has a nil impact on shareholder’s equity and the Group’s adjusted diluted EPS.
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Notes to Editors
About UDG Healthcare plc:
UDG Healthcare plc (LON: UDG) is a leading international partner of choice delivering advisory, communication, commercial, clinical and packaging services to the healthcare industry, employing over 8,500 people with operations in 25 countries and delivering services in over 50 countries.
UDG Healthcare plc operates across two divisions: Ashfield and Sharp.
Ashfield is a global leader in advisory, communication, commercial and clinical services for the pharmaceutical and healthcare industries.
It focuses on supporting healthcare professionals and patients at all stages of the product life cycle. The division provides field and contact centre sales teams, healthcare communications, patient support, audit, advisory, medical information and event management services to over 300 healthcare companies.
Sharp is a global leader in contract commercial packaging and clinical trial packaging services for the pharmaceutical and healthcare industries, operating from state-of-the-art facilities in the US and Europe.
The company is listed on the London Stock Exchange and is a constituent of the FTSE 250.
For more information, please go to: www.udghealthcare.com
About H2 Equity Partners
H2 Equity Partners, founded in 1991, is a leading Western European hands-on investment firm focusing on the United Kingdom, Ireland and the Benelux. H2 Equity Partners is an entrepreneurial and hands-on investment company investing in mid-sized companies with significant growth or improvement potential.
For more information, please go to: www.h2ep.co.uk