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UDG Healthcare to be taken over by US PE firm in £2.6bn deal
12th May 2021 07:57
(Sharecast News) - UDG Healthcare said on Wednesday that it has agreed to be bought by private equity firm Clayton, Dubilier & Rice in a £2.6bn deal, as it reported a "strong" first half.
Under the terms of the transaction, UDG shareholders will receive 1,023p a share in cash. The acquisition price represents a premium of around 21.5% to UDG's closing share price on Tuesday.
UDG chairman Shane Cooke said: "While the UDG board remains confident in the long term fundamentals of the group, we believe that this is an attractive offer for UDG shareholders, which secures the delivery of future value for shareholders in cash today.
"The offer reflects the quality, strength and long term performance of UDG's businesses and its future growth potential. We believe that our people, our clients and our businesses will continue to prosper under the stewardship of CD&R."
The deal, which has been unanimously recommended by the board, is expected to close in the third quarter.
News of the takeover came alongside the company's first-half results, which showed that pre-tax profit rose 5% to $65.1m even as revenue dipped 5% to $661.4m.
UDG hailed a good performance across both parts of its Ashfield business, with adjusted operating profit up 7% and a continued strong performance from Sharp, with adjusted operating profit up 19%.
The group also lifted its FY21 guidance for constant currency adjusted operating profit growth. It now expects growth of between 12% and 14%, up from expectations of 11% and 13% growth previously. In addition, constant currency adjusted diluted earnings per share growth is now expected to be between 10% and 12%, up from previous guidance of 9% and 11%.
Chief executive officer Brendan McAtamney said: "We are pleased to report another strong trading performance, predominantly driven by underlying operating profit growth across both Ashfield and Sharp, supplemented by the benefit of recent acquisitions.
"We continue to expand the range of services we offer clients across many therapeutic areas including several Covid-19 related projects. Additionally, we continued to execute strategic acquisitions, committing $80m to date in FY21, expanding our capabilities in market access and patient support programmes, and further growing our presence across the UK, EU, and US."
At 1310 BST, the shares were up 21% at 1,018p.
Under the terms of the transaction, UDG shareholders will receive 1,023p a share in cash. The acquisition price represents a premium of around 21.5% to UDG's closing share price on Tuesday.
UDG chairman Shane Cooke said: "While the UDG board remains confident in the long term fundamentals of the group, we believe that this is an attractive offer for UDG shareholders, which secures the delivery of future value for shareholders in cash today.
"The offer reflects the quality, strength and long term performance of UDG's businesses and its future growth potential. We believe that our people, our clients and our businesses will continue to prosper under the stewardship of CD&R."
The deal, which has been unanimously recommended by the board, is expected to close in the third quarter.
News of the takeover came alongside the company's first-half results, which showed that pre-tax profit rose 5% to $65.1m even as revenue dipped 5% to $661.4m.
UDG hailed a good performance across both parts of its Ashfield business, with adjusted operating profit up 7% and a continued strong performance from Sharp, with adjusted operating profit up 19%.
The group also lifted its FY21 guidance for constant currency adjusted operating profit growth. It now expects growth of between 12% and 14%, up from expectations of 11% and 13% growth previously. In addition, constant currency adjusted diluted earnings per share growth is now expected to be between 10% and 12%, up from previous guidance of 9% and 11%.
Chief executive officer Brendan McAtamney said: "We are pleased to report another strong trading performance, predominantly driven by underlying operating profit growth across both Ashfield and Sharp, supplemented by the benefit of recent acquisitions.
"We continue to expand the range of services we offer clients across many therapeutic areas including several Covid-19 related projects. Additionally, we continued to execute strategic acquisitions, committing $80m to date in FY21, expanding our capabilities in market access and patient support programmes, and further growing our presence across the UK, EU, and US."
At 1310 BST, the shares were up 21% at 1,018p.