Belfast Telegraph

Irish healthcare giant still eyeing expansion in UK despite Brexit

By John Mulligan

The chief executive of UDG Healthcare has said he would have "absolutely no issue" with buying another UK business despite the looming EU exit.

The Irish company, listed on the FTSE 250, has made a number of acquisitions in the UK, including a deal in October last year to buy STEM Marketing for up to £84m.

But two years ago the firm sold its pharmaceutical distribution division - which included Sangers NI - to global firm McKesson.

Earlier this year UDG also announced that it would spend £9m on a new clinical packaging facility in south Wales.

On Brexit, chief executive Brendan McAtamney said: "We are sheltered a little bit because we provide that business for global clients as opposed to just UK-specific clients."

He spoke as UDG reported strong full-year results. Group net revenue rose 12% to $1.02bn and was 16% higher on a constant currency basis. Operating profit was up 12% at $129.3m. The figure was 17% higher on a constant currency basis.

At its Ashfield unit - which provides communications, advisory and clinical services - net revenue was 21% higher at $630.1m and up 13% on an underlying basis. The unit made an $81.6m operating profit, which was up 16%, and 5% higher on an underlying basis.

UDG Healthcare completed six acquisitions in the last financial year, involving capital commitments of more than $270m.

Mr McAtamney said that one potential "chunky" acquisition had come close to being finalised, but had not been sealed.

He added that UDG Healthcare could deploy between $450m and $500m for acquisitions while remaining within a two to 2.5 times comfort zone.

The boss said he has no preference for either a single large deal or continuing with bolt-ons.

"At the end of the day, honestly it doesn't make a whole lot of difference," he said. "With a transformative deal… the risk goes up with one.

"Being able to do six deals just de-risks it. That being said, if something came around, say a $200m to $300m deal, would we look at it? Absolutely. We have the capability to do that."

He said diversification of revenue and profits, both geographically and operationally, remains important to the group. UDG shares fell as much as 5%.

Belfast Telegraph

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