UDG to divest three businesses in €28.3m deal
The healthcare provider will offload its “specials” business because the operations are deemed to be non-core
Liam Fitzgerald, chief executive, addressing shareholders , at the UDG Healthcare AGM in Dublin earlier this month. The drugs distributor is set to divest three businesses in a deal valued at €23.3 million. Photograph: Eric Luke / The Irish Times
Drug distributor UDG Healthcare is to sell its so-called “specials” businesses and Arjun Products to Professional Compounding Centers of America, in a transaction valued at £23.5 million (€28.3 m).
The specials businesses comprise two companies: The Specials Laboratory Holdings and Craig & Hayward. These companies manufacture and distribute unlicensed medicines, known as “specials” for the community pharmacy and hospital markets in the UK. Arjun Products, which offers a range of dermatology creams, mineral supplements and ear & nose drops to the UK pharmacy market, will also be included as part of the transaction. The businesses generated profits before interest and tax of £2.6 million during the year to September 30th 2013.
The decision to sell the businesses was taken because the group decided “that the manufacture and distribution of specials falls outside the group’s core areas of operation”.
UDG will use the consideration from the deal to reduce its borrowings and increase its capacity to make future acquisitions in its core areas of operation. The carrying value of the assets is £33.5 million. A loss on disposal of £10 million will be recognised in the income statement in the current financial year.
It is expected that the transaction will complete by the end of February 2014.