UDG continues acquisition spree with $35m healthcare buy
UDG Healthcare's strategy of expanding through acquisitions shows no sign of slowing after it snapped up another bite-sized business in a $35m deal that helped drive a 1.3pc rise in the healthcare services provider's share price.
The purchase of Cambridge BioMarketing, a firm that focuses on orphan and rare disease drug launches, marks UDG's second acquisition in as many weeks and the fifth in its financial year.
While the buying spree looks set to continue, the company's ability to pursue transformational deals looks limited following recent consolidations within the sector.
UDG chief executive Brendan McAtamney told the Irish Independent at the publication of its interim results earlier this year that identifying or "sourcing" potential targets, rather than competition in the sector, represented the greatest challenge to M&A. The acquisition of Cambridge BioMarketing follows the $32m purchase of Vynamic LLC last week, a US-based healthcare industry management consulting firm - UDG's first foray into this segment of the market.
In a note to clients, Merrion Private stressed that while "these acquisitions may seem insignificant in size when looked at individually, accumulatively they are attractive bolt-on deals for UDG's North American division and re-enforces [the] group's strategy of investing in the US market".
The broker also noted the takeover of Cambridge BioMarketing deal "provides a platform for growth, specifically in Cambridge, Massachusetts and Oakland, California, both of which have a strong biotech presence." UDG will pay $30m upfront and the remaining $5m in a year, if agreed financial targets are met.
UDG's share price closed at £8.50.