(Alliance News) - UDG Healthcare PLC has agreed to be taken over in a deal that values the healthcare services provider at GBP2.78 billion, it said Wednesday.
Nenelite Ltd, an affiliate of private equity manager Clayton, Dubilier & Rice, offered to buy UDG for 1,023 pence per share, representing a premium of 22% to Tuesday's closing price of 842.0p.
This values FTSE 250-listed firm's share capital at GBP2.61 billion and implies an enterprise value of GBP2.78 billion. It also implies a 17.2x enterprise value multiple to UDG's adjusted earnings before interest, tax, depreciation and amortisation.
UDG directors unanimously recommended the offer to shareholders. Kabouter Management LLC, with a 5.5% stake, has provided a letter of intent to vote in favour of it.
The scheme document is expected to be posted to shareholders within 28 days and the acquisition declared effective in the third quarter, subject to shareholder acceptances and regulatory approval in Austria, Germany, Russia and the US.
"UDG has transformed since disposing of its supply chain business in 2015, through a combination of sustained long-term organic growth and strategic bolt on acquisitions, adding additional capabilities and expanding the UDG group's geographic footprint into a leading healthcare services provider," commented UDG Chair Shane Cooke.
"While the UDG board remains confident in the long-term fundamentals of the group, we believe that this is an attractive offer for UDG shareholders, which secures the delivery of future value for shareholders in cash today."
UDG also reported first-half results to March 31 on Wednesday.
Pretax profit rose by 5% to USD65.1 million from USD62.3 million a year before, despite a 5% revenue decline to USD661.4 million from USD693.6 million.
It declared no interim dividend, compared to 4.46 US cents a year ago, due to the takeover offer from CD&R.
UDG also announced the acquisition in April of Nuvera LLC, a US-based healthcare consultancy specialising in patient support programmes. The price tag will be up to USD36 million.
UDG raised its guidance for all of financial 2021 due to the Nuvera purchase. It now expects adjusted operating profit to grow by 12% to 14% at constant currency, improved from 11% to 13% previously, from USD165.3 million in financial 2020. Adjusted diluted earnings per share is expected to grow by 10% to 12% at constant currency, compared to 9% to 11% before, from 47.71 US cents.
For the first half, adjusted operating profit was USD90.0 million and adjusted diluted EPS was 25.55 cents.
UDG Healthcare shares were up 22% early Wednesday at 1,027.00 pence each in London. The wider FTSE 250 was up 0.5%.
By Tom Waite; thomaslwaite@alliancenews.com
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