Cork-based Healthcare 21 sold to Swedish group in €245m deal

Cork-based medical equipment supplier Healthcare 21 Group has been acquired by Swedish peer AddLife in a deal worth up to €245 million, delivering a multimillion euro payday for its founder Owen Curtin and the company's top managers.

The initial purchase price total is €240 million, of which 74 per cent is being paid in cash and 26 per cent is being settled by way of newly-issued so-called class B shares in Stockholm-listed AddLife. A further sum of €5 million may also be payable, subject to certain conditions.

AddLife said that the deal gives the Swedish group a foothold in the Irish and UK markets, as well as giving it “access to a very attractive customer base in clinical segments in which we have a high level of expertise and a portfolio of proprietary brands”.

In a separate statement published on the Irish company's website, chief executive Tara Kearney said: "This is an exciting development for Healthcare 21, our 450 employees, our suppliers, our customers and all stakeholders. It accelerates growth opportunities for us, and positions Healthcare 21 for the next stage of our journey. Being part of a larger European healthcare group will allow Healthcare 21 to deliver an expanded product and service offering."

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Heathcare 21 doubled in size in 2018 by taking over medical distributor Aquilant from UDG Healthcare. The transaction also saw Aquilant's financial backers, UK private equity firm H2 Equity Partners, take a 49.9 per cent stake in Healthcare 21.

Mr Curtin, who founded the business in 2002 and remains chairman, Ms Kearney, fellow executive director David Frederick and other senior management own the remainder of the business.

Mr Curtin, a former Fianna Fáil Cork city councillor and unsuccessful Progressive Democrat for Cork South-Central in the 1987 general election, sold a company called Southern Hospital Products to healthcare distributor BM Browne the following years for shares in the acquirer.

BM Browne was bought by DCC a decade later, becoming part of the publicly- quoted conglomerate's Fannin healthcare subsidiary. Mr Curtin left Fannin in 2003 and was soon followed by colleague Ms Kearney.

Financial performance

Healthcare 21 recorded sales of about €171 million last year, with Ireland and Northern Ireland accounting for approximately 56 per cent and Great Britain for the remainder.

The group has grown organically and through acquisitions. Earnings before interest, tax, depreciation and amortisation (ebitda) amounted to about €20 million.

For 2020 the group reported positive Covid-19 non-recurring revenue of approximately €6 million, according to AddLife.

The existing management team will remain with the company, and the shares that certain senior management receive in AddLife are subject to a lock-up until 2024 while other sellers are subject to a 12-month lock-up from the date of the takeover, it said.

The AddLife business model is for their group companies to continue to operate independently on a stand-alone basis in their business areas and regions under their own brands. The deal will boost the Swedish company’s net sales by 29 per cent, it said.