Monday 22 January 2018

United Drug denies hurting $80m Catalent sale process

Irish firm sued over alleged breach of non-disclosure agreement

John Mulligan

John Mulligan

UNITED Drug has rejected allegations made in a US court by a firm controlled by private equity giant Blackstone that it damaged an $80m-plus (€62.4m) sales process by publicly revealing confidential information about the planned disposal.

The Irish company, whose interests range from drug distribution to marketing and packaging, was sued in the US last year by Catalent Pharma Solutions for unspecified damages.

United Drug has just filed its answer to the complaint in a New York court and insists that the Catalent allegations are without merit.

In November 2011, United Drug chief executive Liam FitzGerald told investors during a conference call that Blackstone had put Catalent's pharmaceutical packaging division up for sale.

Clients

Mr FitzGerald told the callers that the Catalent unit was underperforming and that United Drug had been picking up business from Catalent clients.

United Drug has a subsidiary in the US called Sharp Corporation, which has also been sued in the same action by Catalent.

United Drug had been among the frontrunners to buy the Catalent unit, which had been expected to fetch as much as $80m.

Ultimately United Drug didn't buy it and it was sold for less than the estimated price tag.

Catalent has alleged that Mr FitzGerald publicly disclosed the sale process despite United Drug having signed a non-disclosure agreement.

It also alleges that he "disparaged Catalent's business".

Catalent also claims Mr FitzGerald impaired the sales process.

Catalent said that "in an obvious, overt and bad-faith effort to drive down the value of the US packaging business and profit from the highly confidential and sensitive business information that they received", Sharp and United Drug breached the non-disclosure agreement.

"The complaint fails to state a claim upon which relief can be granted," say United Drug and Sharp Corporation in their latest court filing.

In August last year, United Drug filed a motion to have the case against it dismissed. In January, the judge hearing the case dismissed that motion.

She ordered that all discovery related to the case has to be made by June 1. The trial is slated to begin on July 29.

United Drug shifted its stock market listing to London last December in its bid to gain wider exposure to the investment community. Its shares have risen nearly 60pc in the past year.

The company made an €84.4m operating profit in its last financial year.

Releasing an interim statement last month, the company predicted that it expects its earnings per share to rise by between 5pc and 8pc this financial year.

Irish Independent

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