Ascendis to sell Bioscience businesses

Health and wellness group Ascendis Health said on Thursday it will sell three businesses in its Biosciences division to a consortium for R480m as part of a strategic review.

Ascendis said it will sell the Efekto, Marltons and Afrikelp businesses to a consortium of RMB Ventures, Nedbank Private Equity and certain members of Ascendis Biosciences division management.

“Following our strategic business review last year the Biosciences division was considered as noncore to the group’s strategy and was identified for sale,” said CEO Thomas Thomsen.

“While these Biosciences businesses are performing well, they serve a different set of customers and require capabilities and skills that are not core to Ascendis Health.”

The Ascendis share price jumped nearly 8% after the announcement and closed 1.58% up at R4.50.

Efekto manufactures and sells home and garden pesticides, fertilizer and plant food products. Afrikelp specialises in natural growth stimulants extracted from seaweed to improve quality and quantity of crops. Marltons, established more than 80 years ago, manufactures and distributes pet care and pet products.

Thomsen said the sale’s cash proceeds will strengthen the group’s financial position in the short term and be used to reduce debt and boost working capital.

Ascendis, which also has operations in Cyprus, Hungary, Romania and Spain, said the remaining businesses in the Biosciences division, Avima and Klub M5, may be considered for divestment in the short to medium term.

The group has been divesting noncore assets as part of a strategic review to improve cash generation, enhance profitability and accelerate organic growth. It announced the sale of its pharmaceutical manufacturing facility in Gauteng for R130m in December after the sale of its SA sports nutrition business for R54m in September.

In January, the group received an unsolicited offer for its Cyprus-based generic pharmaceutical business Remedica.