UDG forks out $14m to settle McKesson legal row
UDG Healthcare has paid $14.4m (€12.9m) to settle a legal spat with US drug-distribution giant McKesson that related to the latter's acquisition in 2016 of the firm's distribution business in Ireland.
Speaking to the Irish Independent, UDG Healthcare chief executive Brendan McAtamney said that the board took a decision to settle the case as it would have been "very distracting" for management and investors.
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McKesson paid €400m to acquire UDG's distribution business on the island of Ireland.
Earlier this year at UDG Healthcare's annual general meeting, Mr McAtamney told shareholders that he believed the claim by McKesson was "pretty weak" and had no merit.
The US firm was attempting to use warranties and representations made by UDG at the time of the sale to recoup some of what it had paid for the business.
Mr McAtamney said the settlement represented less than 3pc of the price paid by McKesson.
"It would have been very distracting," he said of the reasons for settling the case. "It would have always come up on analyst calls, so the board and the executive just took a decision to settle it and move on."
He was speaking as UDG Healthcare, a Ftse-250 company, reported a solid set of first-half results and two more acquisitions.
While total net revenue for the period was down 4pc at $548.3m (€491.7m), it was 1pc lower on a constant currency basis. Its adjusted operating profit was 1pc higher at $68.3m (€61.2m), which was up 3pc on a constant currency basis.
The company said it agreed to pay up to $88.6m (€79.4m) to buy US-based strategic healthcare management consultancy Putnam, with $60m being paid up front. It has also acquired UK firm Incisive Health, a policy and communications consultancy, for up to £13.6m. UDG's two divisions are Ashfield, which provides communications and advisory, as well as clinical and commercial solutions to clients, as well as Sharp, a pharmaceutical packaging business.