UDG Healthcare has €500m for acquisitions after rise in profits
UDG Healthcare has a potential war chest of €500m for acquisitions after announcing a rise in profits in the year to the end of September.
The Irish drug sector services business has €130m in cash on the balance sheet and with additional debt could spend in the region of €500m, chief financial officer Alan Ralph said.
"We would like to do more acquisitions, but we'll buy the right assets rather than any assets," he said.
Add-on deals would be assessed to complement the Dublin-based company's shift from drug distribution to higher margin outsourced services for the pharmaceutical sector. Acquisitions would have to meet management targets, including being in line with its shift into higher margin services and deliver a return of 15pc of capital employed in three years, he said.
An in-house mergers and acquisitions team in the US and Ireland is being used to evaluate deals, he said.
UDG, headed up by ceo Brendan McAtamney (inset), yesterday reported operating profit growth of 8pc to €104.2m for the 12 months to the end of September. Full-year revenue from continuing operations were €943.1m.
The company provides outsourced services to the pharmaceutical sector, including packaging, sales and communication services.
Expansion is likely to be focused on the US, which now accounts for 52pc of profits.
The company proposed a 5pc dividend increase, for a full-year dividend of 11.5 cent. Shares fell 5.6pc to 621.48 each.