UDG Healthcare’s €105m deal boosts its global reach

Diversified medical services group UDG Healthcare is set to become a global leader in the healthcare communications sector via the purchase of part of UK company, KnowledgePoint360, for more than €100m.

The $144m (€105m) takeover, which is expected to be completed by the end of next month and which will be financed from existing cash facilities, will directly complement UDG’s healthcare communications offering — which forms part of its Ashfield Commercial & Medical Services division in the UK and US — and make the group a leading global provider, also enabling further expansion in the US and mainland Europe.

UDG’s chief executive, Liam FitzGerald said the purchase represents “a significant strategic and complementary acquisition” for the Dublin-based group.

“KnowledgePoint360 is a strong and well-established business, with an excellent management team and highly qualified workforce that has a style and values similar to our own. Our Ashfield business has had great success with previous acquisitions in the healthcare communications market, including InforMed and Watermeadow. Expansion in healthcare communications and related business areas is a key part of our global growth strategy,” he added.

The estimated value of the gross assets being acquired — basically the healthcare communications division of the Macclesfield-headquartered firm — will be €47m at completion; with the assets generating annual revenues, of late, of €77m; EBITDA of €15m and EBIT of €12m.

The UK business — which employs 600 staff across 10 global locations — provides legal, medical and compliance information and publication services to major pharma, biotech and device companies.

UDG reached agreement to sell its non-core unlicensed medicines — or ‘specials’ — division to an American buyer for nearly €29m earlier this month. That deal, combined with yesterday’s acquisition announcement will lead the Ashfield unit to become UDG’s biggest division, roughly representing around 40% of annual operating profit. Goodbody Stockbrokers said that, on the back of this recent transactional movement, it will be upping its full-year 2014 operating profit estimate, for UDG, by approximately 8% to around €109m.