Support services giant DCC has strengthened its healthcare division with the €68.1m takeover of Kent Pharmaceutical — the largest manufacturer of generic medical treatments.
The Dublin-headquartered group could end up paying almost €75m for the British firm — which also has a manufacturing facility in Roscommon.
It will pay the €68.1m as an initial consideration; but could pay a deferred consideration of up to €6.7m depending on the future performance of the Kent business.
While much of DCC’s recent acquisition activity has been evident in its energy division, group CEO Tommy Breen called this latest move “a material step forward” for DCC.
As part of DCC’s recent strong set of first-half financial results, for the six months to the end of September, the healthcare unit saw particularly strong profit and revenue growth as well as the energy and SerCom divisions.
Mr Breen said this deal could give the group further acquisition opportunities in the healthcare field.
“For some time, DCC has believed that there is an opportunity to build a substantial pharma business, principally focused on established niche generic products that are a number of years post- patent expiry,” he said.
“Such products are well-positioned to benefit from the macro trend for healthcare systems to seek to meet the increasing demands of aging populations with more cost-effective healthcare solutions.
“In addition, the pharma market is fragmented, offering value-enhancing bolt-on acquisition opportunities, in particular where a strong platform has been established.
“Kent Pharma is an excellent strategic fit for DCC Healthcare’s existing pharma business and their combined strengths will create new growth opportunities for DCC,” he said.
Based in Ashford in south-east England, Kent mainly sells into retail pharmacies, but also to hospitals and international distributors and employs 304 people — 126 of whom are employed here.
The tie-up with DCC — dependent on Competition Authority approval — will create a company with combined revenues of €150m.
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