United drug buys UK firm for £7.4m

Pharmaceutical company United Drug has acquired a British medical distribution business, Endoscopy, in a deal worth up to £7.4 million (€10.82 million).

Shares in United Drug rose 1.459 per cent to close at €13.91 on the Dublin market after the company made the transaction public yesterday morning. In the past year, United Drug has spent some £30 million buying three other businesses in the British market.

The company's strategy is to expand its medical and scientific and contract sales outsourcing units through acquisitions. To facilitate such transactions, chief executive Liam FitzGerald indicated recently that it would be prepared to more than double its balance sheet gearing, which currently stands at about 20 per cent, to fund the right deals.

Endoscopy comprises two companies, Endoscopy UK Ltd and Mediscope Ltd, which specialise in the sale and technical support of equipment to visually examine hollow body organs. Clients include public and private hospitals throughout Britain.

The companies are based near the Forest of Dean in Gloucestershire. According to United Drug, they differentiate themselves from rivals by providing a "superior" level of service. "Endoscopy will continue to service its clients through its experienced management team and sales infrastructure," United Drug said.

The consideration comprises an upfront payment of £6.1 million in cash plus an additional payment of £1.3 million depending on the achievement of agreed profit targets in the next 12 months.

"The acquisition of Endoscopy further demonstrates our ability to grow our medical and scientific business successfully in the UK through bolt-on acquisitions of high-quality companies that add value to United Drug's offering and meet the growing demand for cost-effective outsourced services from healthcare manufacturers," said Mr Fitz-Gerald.

United Drug's medical and scientific unit is known in Britain for introducing the "DaVinci" surgical robot to the private hospital sector. The robot facilitates the use of minimally invasive surgery techniques in cardiac surgery and and gynaecological and infertility operations.