TIDMUDG
RNS Number : 1811N
UDG Healthcare Public Limited Co.
21 October 2016
This announcement contains inside information
UDG Healthcare acquires STEM Marketing Limited for up to
GBP84m
The leading global provider of commercial, marketing and medical
audits to pharmaceutical companies
21 October 2016: UDG Healthcare plc (the "Group"), a leading
international provider of healthcare services, announces that it
has acquired STEM Marketing Limited ("STEM"), the leading global
provider of commercial, marketing and medical audits to
pharmaceutical companies for a total consideration of up to GBP84m
($103m).
Transaction highlights:
-- STEM is the leading global provider of commercial, marketing
and medical audits to pharmaceutical companies. This unique service
uses a proven, evidence based methodology to quantify and benchmark
organisational alignment and quality of execution to create
practical action plans to accelerate brand performance.
-- STEM is a global business offering services across 35
countries including the US, EU, Japan and China and its customers
include 18 of the top 20 largest pharmaceutical companies.
-- Highly cash generative, high margin business with strong growth in recent years.
-- Significantly expands Ashfield's service offering and
capabilities in the commercial and clinical services market and
complements Ashfield Healthcare Communications global offering.
-- In line with UDG's strategy to grow both organically and via
acquisition with a focus on high growth areas.
-- For the year ending 31st December 2015, STEM had gross assets
of GBP13.5m ($16.5m) which generated EBITDA of GBP5.5m ($6.7m).
-- Upfront acquisition multiple of 8.1x EBITDA based on the
current trading performance of STEM.
-- The acquisition will be financed from existing cash
facilities and is expected to be immediately accretive to earnings.
Additionally, the acquisition is expected to deliver a return on
capital employed in excess of the Group's target of 15% within 3
years.
Commenting on the announcement, Brendan McAtamney, Chief
Executive of UDG Healthcare plc said:
"STEM is an excellent strategic fit for UDG and is wholly
aligned with our global growth strategy of expanding our market
leading positions providing services to the pharmaceutical sector.
The acquisition of STEM, a business with an established global
footprint and strong growth opportunities, will enable us to
provide new services to our clients, which are highly complementary
to those already delivered by our Ashfield business.
We place great emphasis on cultural fit when looking at
potential acquisition opportunities and STEM comes with an
excellent management team, which will become an important part of
our client offering and the wider UDG Healthcare Group."
Commenting on the announcement, Rob Wood, Chief Executive of
STEM said:
"We are delighted to begin an exciting new chapter for STEM as
part of the UDG Healthcare Group. We wanted a partner who would
help us to accelerate our global performance. Our new working
relationship with UDG will not only facilitate geographic expansion
but will also enable further client offerings and most importantly
provide our employees with broader career options and widen our
talent pool."
Structure of the Transaction:
STEM is being acquired for an initial consideration of GBP55m
($67.4m) upon completion (comprised of a GBP50m ($61.3m) cash
payment and GBP5m ($6.1m) in UDG Healthcare plc ordinary shares)
subject to adjustments for cash and normalised working capital. An
additional consideration of up to GBP29m ($35.5m) (comprised of a
GBP24m ($29.4m) cash payment and GBP5m ($6.1m) in UDG Healthcare
plc ordinary shares) is payable over the next three years.
Contingent on the achievement of pre-defined financial targets,
the first instalment (up to GBP5m ($6.1m)) will become payable
within six months of completion with the remainder (up to GBP24m
($29.4m)) payable within three years of completion.
The ordinary shares issued as part of the initial consideration
will be subject to customary "lock-up" arrangements. The exact
number of ordinary shares in UDG Healthcare plc to be issued as
part of the initial and deferred consideration, will be determined
based on the average share price of the Group in the 15 days
trading post completion.
ENDS
For further information, please contact:
Investors and Analysts:
Alan Ralph Keith Byrne
CFO Head of Investor Relations,
UDG Healthcare plc Strategy & Corporate
Tel: +353-1-468-9000 Communications
UDG Healthcare plc
Tel: + 353-1-468-9000
Media:
Business / Financial media:
Lisa Kavanagh / Jack Hickey
Powerscourt
Tel: +44-207-250-1446
About UDG Healthcare plc:
Listed on the London Stock Exchange, UDG Healthcare plc (LON:
UDG) is a leading international partner of choice delivering
clinical, commercial, communication and packaging services to the
healthcare industry, employing over 7,000 employees at operations
across 20 countries including the US, UK, Ireland and Germany.
UDG Healthcare plc operates across three divisions: Ashfield
Commercial & Medical Services, Sharp Packaging Services and
Aquilant Specialist Healthcare Services.
Ashfield Commercial & Medical Services is a global leader in
commercialisation services for the pharmaceutical and healthcare
industry, operating across two broad areas of activity: commercial
and clinical services, and healthcare communications. It focuses on
supporting healthcare professionals and patients at all stages of
the product life cycle. The division provides sales teams,
healthcare communications, telesales, nurse educators, medical
information, pharmacovigilance (drug safety), regulatory and event
management services to over 300 healthcare companies in 18
countries.
Sharp Packaging Services is a global leader in contract
packaging and clinical trial packaging services for the
pharmaceutical and biotechnology industries, operating from state
of the art facilities across the US and Europe. Sharp is also a
world leader in 'Track and Trace' serialisation services, which
will require all prescription drugs to have a unique serial code
for authentication and traceability.
Aquilant Specialist Healthcare Services is a leading provider of
outsourced sales, marketing, distribution and engineering services
to the medical and scientific sectors in the UK, Ireland and the
Netherlands.
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 STEM:
Established in 2007, STEM has developed into a global business
spanning 35 countries worldwide, working for 18 of the top 20
largest pharmaceutical companies. Offering a unique 'audit' service
which can be applied to a pharmaceutical company's marketing,
medical, market access or account management functions, STEM has
fast become an essential and vital tool enabling operational
insight. In 2016 STEM was awarded the Queen's Award for Enterprise
in International Trade.
In terms of commercial performance, STEM has grown rapidly since
incorporation. During this time, the company's strategy has been
four fold; repeat business, geographic penetration, portfolio
penetration and service extension.
STEM has built a database which is now regarded as the industry
standard globally, made up of more than 30,000 customer facing
staff and 150,000 customer interactions which are benchmarked
against more than 100 KPIs to drive field teams' performance
interactions.
For more information please go to: www.stemmarketing.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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