'Sweetened' price agreed for UDG Healthcare

Private equity firm Clayton, Dubilier & Rice has agreed to buy Irish healthcare services group UDG Healthcare for about €3.3bn in cash after winning the backing of key shareholders

UDG provides a range of services to pharmaceutical customers in about 25 countries. File picture: Pexels

Private equity firm Clayton, Dubilier & Rice has agreed to buy Irish-founded and headquartered healthcare services group UDG Healthcare for a sweetened offer of about £2.8bn (€3.3bn) in cash after winning the backing of key shareholders.

The price amounts to 1,080 pence a share, the companies said. Last week, CD&R said it was considering raising its offer to that level after some of Dublin-based UDG’s largest investors complained a previous bid was too low.

The pace of healthcare acquisitions has accelerated during the pandemic, and UDG, which provides a range of services to pharmaceutical customers in about 25 countries, said last month it was supporting clients in bringing Covid-19 treatments and vaccines to market. 

UDG said it has not received offers from any other bidders since CD&R submitted its original bid.

Improved bid

CD&R said its improved bid has the backing of UDG’s largest shareholder, Allianz Global Investors, which had criticised the initial offer as “opportunistic,” as well as Kabouter Management. The companies made no mention of activist investor Elliott Investment Management, which recently built up a position in UDG.

The opposition to the initial offer reflects a wider concern that private equity companies are taking advantage of lower market valuations owing to Brexit and the pandemic to try and buy firms for less than they are worth.

UDG shares rose marginally on the news. The stock has climbed 37% this year.

• Bloomberg