UDG buys US firms Create NYC and SmartAnalyst for €71m

Healthcare services provider UDG Healthcare has announced the acquisition of two healthcare-focused firms in the US for up to $82.4 million (€70.8 million).

The company said it had agreed to buy healthcare creative communications agency Create NYC for a total consideration of up to $58.4 million, and strategic consulting and analytics business SmartAnalyst for up to $24 million.

The new firms will complement UDG's existing offering. UDG Healthcare employs 9,000 people with operations in 24 countries. It works across three divisions: Ashfield, Sharp and Aquilant.

“Both transactions meet all of UDG’s acquisition criteria – they are a good strategic and cultural fit; meet our target financial hurdle rates; and involves an expansion of our current capabilities,” said Brendan McAtamney, chief executive of UDG Healthcare.

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Create NYC offers clients high impact, on-demand flexible marketing support with a flat fee structure, allowing the company to deliver its service with a faster response time. Founded in 2009, it employs 43 people. The business will become part of Ashfield Communications.

For the year ending December 31st, 2017, Create NYC had gross assets of $9.1 million, and generated operating profits of about $7 million.

Some $17 million of the purchase price will be paid up front, with an earn out of up to $41.4 million over five years.

SmartAnalyst provides strategic consulting services to pharmaceutical and biotech companies to support disease-, asset- and portfolio-level decisions. Founded in 2001, it has 135 employees across its operations in New York, London and India. The company also provides health economics and outcomes research services, a high-growth area of the market driven by the increasing complexity of drugs, cost and regulatory pressures.

The purchase price is divided into an initial consideration of $18 million, with an earn out of up to $6 million payable over three years, based on meeting profit targets.

“The acquisitions of Create NYC and SmartAnalyst add exciting capability to Ashfield’s portfolio,” Davy analysts said in a note. “They also further UDG’s strategy of growing Ashfield’s presence in both the communications and advisory space as well as the US market, while reinforcing its ability to transact at attractive multiples.”