TIDMUDG
RNS Number : 3448T
UDG Healthcare Public Limited Co.
03 July 2018
UDG Healthcare announces the acquisition of two US-based
businesses
for a combined consideration of up to $82.4 million
03 July 2018: UDG Healthcare plc ("the Group"), a leading
international healthcare services provider, is pleased to announce
the acquisition of Create NYC, a New York-based disruptive creative
communications agency and SmartAnalyst, a New York-based strategic
commercialisation consulting and analytics business, for a combined
consideration of up to $82.4 million. Both companies are dedicated
to the healthcare market.
Create NYC
Create NYC is an innovative New York-based healthcare creative
communications agency, offering the tactical execution of sales and
marketing materials for its international pharmaceutical clients.
Create NYC's offering comprises a unique, disruptive model which
gives its clients high impact, on-demand flexible marketing support
with a flat fee structure. This approach complements the more
traditional agency model.
The core value proposition of Create NYC's on-demand model means
it can deliver its service with a faster response time and at a
highly competitive price. The company utilises a qualified hub of
outsourced resources to deliver its high quality creative work.
Founded in 2009 by Natalie McDonald, who remains with the company
as CEO, Create NYC employs 43 people in-house. The business will
become part of Ashfield Communications.
US Pharmaceutical companies spend $25 billion annually on
promotion including marketing and advertising. As market dynamics
change due to the increased complexity of drugs, increasing
competition, regulation and rising prices there is a demand from
pharmaceutical clients for greater efficiency from their marketing
and advertising spend. Create NYC's capabilities play strongly into
this market opportunity.
Create NYC is being acquired for a total consideration of up to
$58.4 million, with $17 million paid upfront (approximately 2.5x
EBIT), and an earn out of up to $41.4 million over five years
($23.5 million payable after three years and $17.9 million payable
after five years).
The acquisition of Create NYC is in line with Ashfield's
strategy to expand into areas of differentiated but aligned
adjacencies to its core scientific communication capabilities. For
Create NYC, Ashfield provides the opportunity to diversify its
client base and expand internationally.
For the year ending 31(st) December 2017, Create NYC had gross
assets of $9.1 million, which generated operating profits of
approximately $7 million. It is expected to deliver a return on
capital employed in excess of the Group's target of 15% within
three years. The transaction completed on 2(nd) July 2018.
SmartAnalyst
SmartAnalyst is a US-based strategic consulting and analytics
business focused on the pharmaceutical and biotech sector. The
company was founded in 2001 and has 135 employees based across
operations in New York, London and Gurgaon, India. SmartAnalyst
provides strategic consulting services to pharmaceutical and
biotech companies to support disease, asset, and portfolio level
decisions. SmartAnalyst also provides Health Economics and Outcomes
Research (HEOR) services, which uses evidence based data and
analytics to demonstrate the value of products and to support
market access and reimbursement with payors. HEOR is a high growth
area, driven by market dynamics such as the increasing complexity
of drugs, the changing landscape of market access, cost and
regulatory pressures, and the increased scrutiny of real world
outcomes.
The acquisition of SmartAnalyst is in line with Ashfield's
strategy to expand its advisory service proposition for its
healthcare clients and follows the acquisitions of STEM in October
2016 and Vynamic in July 2017. SmartAnalyst provides Ashfield with
access to commercial development decision makers, as well as
infrastructure in India. Ashfield will provide leverage and
opportunities to grow Smart Analyst's customer base outside the US
through Ashfield's global business.
SmartAnalyst is being acquired for a total consideration of up
to $24 million. This includes initial consideration of $18 million,
with an earn out of up to $6 million payable over the next three
years, based on the achievement of agreed profit targets. The
acquisition is expected to deliver a return on capital employed in
excess of the Group's target of 15% within three years. The
transaction completed on 29(th) June 2018.
Both transactions will be financed from existing cash and debt
facilities and are expected to be earnings accretive.
Commenting on the announcement, Brendan McAtamney, CEO of UDG
Healthcare plc, said:
"We are delighted to announce these two acquisitions, which
further expand the services we offer our healthcare clients. Create
NYC adds innovative, creative services within Ashfield
Communications and SmartAnalyst expands Ashfield's advisory pillar,
adding new capabilities in strategic consulting and the high growth
area of Health Economics and Outcomes Research.
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."
For further information, please contact:
Investors and analysts:
Nigel Clerkin Keith Byrne
CFO Head of IR, Strategy & Corporate
UDG Healthcare plc Communications
Tel: + 353-1-468-9000 UDG Healthcare plc
Tel: + 353-1-468-9000
Business / Financial media
Lisa Kavanagh / Jack Hickey
Powerscourt
Tel: + 44-207-250-1446
Notes to Editors
About UDG Healthcare plc:
UDG Healthcare plc (LON: UDG) is a leading international partner
of choice delivering advisory, communication, commercial, clinical
and packaging services to the healthcare industry, employing 9,000
people with operations in 24 countries and delivering services in
over 50 countries.
UDG Healthcare plc operates across three divisions: Ashfield,
Sharp and Aquilant.
Ashfield is a global leader in commercialisation services for
the pharmaceutical and healthcare industry, operating across three
areas of activity: advisory, communication, commercial &
clinical services. It focuses on supporting healthcare
professionals and patients at all stages of the product life cycle.
Ashfield provides field and contact centre sales teams, healthcare
communications, patient support, audit, advisory, medical
information and event management services to over 300 healthcare
companies.
Sharp is a global leader in contract commercial packaging and
clinical trial supply chain solutions services for the
pharmaceutical and biotechnology industries, operating from
state-of-the-art facilities in the US and Europe.
Aquilant is leading distributor of specialist medical and
scientific products, providing outsourced sales, marketing,
distribution and engineering services to the medical and scientific
sectors in the UK, Ireland and the Netherlands.
The company is listed on the London Stock Exchange and is a
constituent of the FTSE 250.
For more information, please go to: www.udghealthcare.com
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END
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