UDG off­loads Aquilant fi­nal dis­tri­bu­tion busi­ness for €23m

Irish Independent - Business Week - - Front Page - John Mul­li­gan

UDG Health­care has sold its Aquilant di­vi­sion for €23m to pri­vate equity firm H2 Equity Part­ners.

The unit, which rep­re­sented about 4pc of UDG’s $67.4m (€58.1m) op­er­at­ing profit dur­ing the six months that ended in March, has been un­der pres­sure dur­ing the third quar­ter.

Aquilant, which dis­trib­utes spe­cial­ist med­i­cal equip­ment in Ire­land, the UK and the Nether­lands, was per­form­ing “well be­hind” com­pared to the third quar­ter in the pre­vi­ous fi­nan­cial year af­ter the ter­mi­na­tion of two con­tracts, ac­cord­ing to a trad­ing up­date from UDG Health­care.

“Fol­low­ing the dis­posal of the group’s United Drug sup­ply chain busi­nesses to McKes­son in April 2016, the group has now ex­ited all of its lower mar­gin dis­tri­bu­tion busi­nesses,” it added.

Pro­ceeds from the dis­posal will be used to fuel growth at UDG’s higher-mar­gin di­vi­sions, Ash­field and Sharp.

H2 will pay an ini­tial €20.5m in cash for Aquilant, and a de­ferred cash con­sid­er­a­tion of €2.5m.

UDG said the group will also recog­nise a $10m (€8.6m) im­pair­ment charge re­lated to the Aquilant sale, and also a charge of about $34m (€29.3m) re­lated to the recog­ni­tion of ac­cu­mu­lated for­eign ex­change losses held in equity.

“The sale of Aquilant is con­sis­tent with the group’s strat­egy to fo­cus on its higher growth, higher mar­gin in­ter­na­tional health­care ser­vices busi­nesses,” said UDG Health­care CEO Bren­dan McA­tam­ney.

UDG’s Sharp busi­ness is in­volved in the pack­ag­ing of phar­ma­ceu­ti­cals, while Ash­field pro­vides a broad range of out­sourc­ing ser­vices.

UDG said its group trad­ing per­for­mance in the third quar­ter was ahead of last year.

It said Ash­field’s com­mu­ni­ca­tions and ad­vi­sory arm also ben­e­fited from ac­qui­si­tions, while the di­vi­sion’s com­mer­cial and clin­i­cal busi­ness ex­pe­ri­enced a chal­leng­ing quar­ter.

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