(Alliance News) - UDG Healthcare PLC on Tuesday said it has agreed to be bought by Clayton Dubliner & Rice LLC, after the US private equity firm returned to the table with an improved takeover offer.
UDG said it has agreed final terms with CD&R on an offer that values the Dublin-based private healthcare provider at GBP2.76 billion.
Under the deal terms, UDG shareholders will be entitled to receive 1,080 pence for each share, up 5.6% from the previous offer of 1,023p per share. The offer represented a 28% premium on the healthcare provider's closing price of 842p on May 11, jumping to 1,016p the following day.
On Tuesday morning, the stock was up 0.5% in London at 1,071.00p. It is up 37% so far in 2021.
The offer price suggests an implied enterprise value around 18 times UDG's adjusted earnings before interest, tax, depreciation and amortisation of USD228 million in the financial year that ended March 31.
CD&R plans to combine UDG's Ashfield business with its own Huntsworth unit to create a global pharmaceutical services provider, as announced in May.
The acquisition will be funded through debt provided under committed third party debt financing, and the buyers equity financing.
Last Friday, CD&R began to consider raising its takeover offer to GBP2.76 from GBP2.61 billion after after at least one major shareholder had said the bid was too low.
UDG noted that CD&R has the support of 11% of shareholders, including Allianz Global Investors and Kabouter Management, for the final offer. Other institutional shareholders of UDG also have indicated their willingness to vote in favour of the deal.
UDG directors unanimously recommend the acquisition to shareholders, the company said.
"The UDG directors believe that the UDG group is well positioned for future continued success and that the long-term prospects of the group are strong as an independent listed entity. Nevertheless, the UDG directors recognise that uncertainties exist, many of which are beyond UDG's control," it explained.
UDG has called shareholder meetings for July 22 to approve the deal.
By Scarlett Butler; scarlettbutler@alliancenews.com
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