* CD&R to buy Huntsworth for 108p/share
* CD&R sees attractive pharma-related trends
* Huntsworth full-year pretax profit up 27%
* Shares soar more than 50% on news
(Adds analyst comments, background, advisers, updates shares)
By Yadarisa Shabong
March 3 (Reuters) - U.S.-based private equity firm Clayton,
Dubilier & Rice has agreed to buy British healthcare marketing
and services company Huntsworth for about 400 million pounds
($511 million) in a bet on continued strong growth in global
healthcare markets.
Clayton, Dubilier & Rice (CD&R) said on Tuesday it would pay
108 pence a share in cash for Huntsworth, which
provides marketing and medical communications services to
pharmaceutical companies.
That's a 50% premium to the stock's closing price on Monday.
However, Huntsworth shares surged beyond the bid price to as
high as 110.7 pence, suggesting some investors think a
counter-bid is possible for the fast-growing British firm.
"This looks an excellent price for the bidding company" said
Peel Hunt analysts, who have a target price of 120 pence for
Huntsworth shares. "This modest valuation ... (leaves) the door
ajar for speculation on the potential for a competing approach".
CD&R said Huntsworth's underlying markets, the United States
and Europe, were attractive and underpinned by stable pharma
industry trends, adding it intended to help Huntsworth with
future acquisitions.
"Our vision for Huntsworth is shared with management, who
have demonstrated an ability to drive organic growth and execute
accretive add-on acquisitions," said Liam Fitzgerald, adviser to
CD&R funds.
In a separate statement, Huntsworth reported a 27% jump in
pretax profit for 2019, as its communications division returned
to growth and its medical arm went from strength to strength.
"Healthcare remains our focus for growth and investment, as
it continues to be a fast-growing sector led by increasing
global demand for new drugs to help ageing populations," said
Huntsworth chief executive Paul Taaffe.
"This demand is driving a complex marketplace that requires
a combination of higher margin consultancy services, medical
affairs and more effective marketing".
The acquisition is the latest by a U.S. private equity firm
in Britain, where a drop in the value of the pound has spurred
dealmaking since the country voted to leave the European Union.
Buyout firm Advent, for example, is taking British defence
and aerospace group Cobham private, while Blackstone is buying
Madame Tussauds owner Merlin.
Huntsworth's directors were advised by Rothschild & Co on
the financial terms of the deal, while BofA Securities, Houlihan
Lokey and RBC Capital Markets were among advisers to CD&R.
($1 = 0.7822 pounds)
(Reporting by Yadarisa Shabong in Bengaluru; Editing by Bernard
Orr and Mark Potter)
