UDG agrees to buy two companies in New York for $82m
UDG Healthcare has agreed to pay $82.4m (€70.7m) to buy two US companies.
It is acquiring Create NYC, a healthcare creative communications company, and SmartAnalyst, a strategic consulting and analytics firm with offices in New York, London and Gurugram, India.
UDG is paying a total of up to $58.4m for Create NYC, with $17m of that being paid upfront, which represents an acquisition price of 2.5 times earnings before interest and tax.
There is a possible earn-out of $41.4m over five years, with up to $23.5m payable after three years and the remainder after five years.
Last year, Create NYC generated operating profits of around $7m and is expected to now deliver a return on capital (ROCE) employed in excess of UDG's target of 15pc within three years. UDG CEO Brendan McAtamney said Create NYC utilises a "unique, disruptive model" that gives clients "high-impact, on-demand flexible marketing support with a flat fee structure".
The business was founded in 2009 by Natalie McDonald, who remains as CEO. Create NYC employs 43 people in-house. The business will become part of UDG's Ashfield Communications unit.
The acquisition is in line with Ashfield's strategy to expand into areas of differentiated but aligned adjacencies to its core scientific communication capabilities, UDG said.
It said that for Create NYC, Ashfield provides the opportunity to diversify its client base and expand internationally.
UDG is paying a total of up to $24m for Smart- Analyst. The deal includes an initial consideration of $18m, with an earn-out of up to $6m payable over the next three years, based on achieving agreed profit targets. SmartAnalyst is also expected to deliver a ROCE over the group's 15pc target over the next three years.
Based in New York, SmartAnalyst is a strategic consulting and analytics business focused on the pharma and biotech sector.
Founded in 2001, it has 135 employees based across its three international offices. It provides services to pharmaceutical and biotech companies to support disease, asset, and portfolio-level decisions.
SmartAnalyst also provides Health Economics and Outcomes Research services, which uses evidence-based data and analytics to demonstrate the value of products and to support market access and reimbursement with payers.