H2 Equity Partners to pay EUR 23m for UDG Healthcare's Aquilant
UDG Healthcare announced the sale of its Aquilant division to H2 Equity Partners, a European private equity firm, for a total potential net consideration of up to €23m ($27m) on Wednesday.
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The FTSE 250 company described Aquilant as a “leading distributor” of specialist medical, pharmaceutical and scientific products and services, including outsourced sales, marketing, distribution and engineering services to clients in the Republic of Ireland, the UK and the Netherlands.
Aquilant represented around 4% of UDG Healthcare's operating profits in the six month period ended 31 March.
Following the disposal of its United Drug Supply Chain businesses to McKesson in April 2016, UDG said it had now exited all of its lower margin distribution businesses.
In line with its strategy, proceeds from the transaction would be used to fund the continued development of its higher growth and higher margin divisions, Ashfield and Sharp.
Under the terms of the transaction, the total proceeds receivable by the group would be up to €23m.
That would comprise an initial cash consideration payment of €20.5m, and deferred consideration of up to a further €2.5m payable in cash, based on the achievement of gross profit targets by Aquilant in the 2018 and 2019 financial years.
UDG said it would recognise an impairment charge of approximately $10m on the asset value of Aquilant as at 31 March, and a charge of about $34m relating to the recognition of accumulated foreign exchange losses held in equity.
For the year ended 30 September last year, Aquilant generated net revenue of $96.3m and operating profit of $6.4m, and had gross assets of $126.5m.
“We are pleased to announce the sale of Aquilant to H2 Equity Partners,” said UDG Healthcare chief executive officer Brendan McAtamney.
“This transaction will provide new opportunities for Aquilant employees and I'd like to extend my thanks to all employees of Aquilant for their ongoing commitment to the business and, on behalf of the board, I wish them every success in the future.
“The sale of Aquilant is consistent with the group's strategy to focus on its higher growth, higher margin international healthcare services businesses.”
