18th Aug 2014 06:49
LONDON (Alliance News) - UDG Healthcare PLC said Monday that it has sold its 50% stake in UniDrug Distribution Group Limited to its joint venture partner Alliance Boots in a cash deal worth GBP66 million or EUR82 million.
The international provider of healthcare services said that following the transaction United Drug Supply Chain Services will remain an Alloga partner in pre-wholesaling in the Republic of Ireland and will continue to work with the pharmacy-led health and beauty group on this basis. "We will also continue our long term relationship for wholesale service provision to Alliance Boots in both Northern Ireland and the Republic of Ireland," said the company in a statement.
UniDrug was founded in 1996 by UDG Healthcare and Alliance Boots as a 50:50 joint venture. The company provides pre-wholesale supply chain solutions to the healthcare industry in the UK, offering specialist storage, fulfilment and distribution services.
In its fiscal 2013, UDG Healthcare said it received a net after tax profit contribution from UniDrug of EUR5.6million. The carrying value of the UniDrug investment is EUR12million and a gain on disposal of EUR70million is estimated.
UDG said the disposal proceeds will be used for general corporate purposes and debt pay down.
"UniDrug has been a very successful investment for UDG Healthcare. With the on-going convergence of the pre-wholesale and wholesale markets in the UK, UniDrug has a reduced fit with UDG Healthcare's core Supply Chain Services operations in the Republic of Ireland and Northern Ireland. The opportunity to exit the joint venture allows UDG Healthcare to release over ?80million to both reduce debt and for further investment in areas of our business which fit strategically with the future development of the Group," said UDG Chief Executive Liam FitzGerald.
Earlier this month UDG Healthcare reported that operating profit and group revenue in its fiscal third quarter and the first nine months of its financial year were ahead of the previous year on the back of a strong performance for its Ashfield Commercial and Medical Services arm.
The FTSE 250-listed company reiterated its full-year guidance for constant currency adjusted diluted earnings per share to be 5% to 9% ahead year-on-year in its full-year to September 30.
By Alice Attwood; [email protected]; @AliceAtAlliance
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