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Key highlights
- UDG Healthcare PLC, a leading international healthcare services provider, announces that it has entered into a conditional agreement for the sale of certain assets, including:
- - United Drug Supply Chain Services businesses[1] that form part of UDG Healthcare's Supply Chain Services Division; and
- - MASTA Business, which forms part of the Ashfield Commercial & Medical Services Division, to McKesson, for an aggregate cash consideration of €407.5 million on a cash and debt free basis.
- The Disposal is consistent with Group strategy to focus on its higher growth, higher margin international healthcare services businesses and progresses the Group’s transformation to a more focused international healthcare services business
- The Disposed Businesses will be better positioned to prosper under the ownership of McKesson, a leading international wholesale and retail group
- The Continuing Group is extremely well positioned to develop and strengthen existing market positions in Ashfield, Aquilant and Sharp, and capitalise on the increasing demand for their services
- The net proceeds from the Disposal will facilitate increased investment in higher growth areas both organically and via acquisition. A portion of the net proceeds will be used to repay part of the Group's outstanding debt
- Leadership Transition as CEO, Liam FitzGerald, announces plans to retire in March 2016 and Board nominates COO, Brendan McAtamney, as his successor.
Commenting on the Disposal, Peter Gray, Chairman of UDG Healthcare said:
“Today’s announcement is the culmination of 15 years of strategic development by the Group. It gives us the resources to continue building our higher margin, higher growth divisions, while placing our legacy United Drug Supply Chain Services business in the ownership of a global leader who will bring new opportunities and strengths to that business, its staff and its customers, to whom we extend our thanks for their long standing loyalty.”
The Disposal constitutes a Class 1 transaction for the purpose of the Listing Rules and is conditional upon, inter alia, the approval of Shareholders at an Extraordinary General Meeting and, the approval from the applicable regulatory authorities. The transaction is anticipated to complete by 31 March 2016.
A circular containing further details of the Disposal, including the notice of the Extraordinary General Meeting to seek Shareholders' approval for the Disposal, is expected to be sent to Shareholders shortly. The General Meeting is to be held at 12 noon on 13 October 2015 at The Clyde Court Hotel, Lansdowne Road, Ballsbridge, Dublin 4, Ireland.
CEO Transition
Following the negotiation of this transaction, Liam FitzGerald, the Group Chief Executive Officer since 2000, has informed the Board that he plans to retire on March 31 2016 after 23 years with Company. Having been aware over the last number of years of Mr. FitzGerald’s early retirement aspirations, the Board has been actively involved in succession planning and has nominated Brendan McAtamney, Group Chief Operating Officer since 2013, as his successor.
“It has been my privilege to lead this company for 15 exciting years,” said Mr FitzGerald, “and I believe now is the right time for new leadership to take the Company forward. Since 2000 we have been on a journey to transform the Group and move into new higher-growth outsourced pharmaceutical service areas and geographies. Today’s announcement marks the completion of that transformation, albeit subject to shareholder approval. It’s a good time to pass of the baton to Brendan, and to move to a different phase in my career.”
The Board has asked Mr FitzGerald, and he has agreed, after 31 March 2016 to remain as a consultant and a director until 30 September 2016 to support the transition, and to continue to provide his experience to the Company as it invests further in its key services.
“Liam has achieved what very few CEOs have successfully done, and transitioned the Company over a long period and through difficult times from its original core business into new and growing service areas and geographies,” said Chairman, Peter Gray. “He has been very transparent with the Board regarding his aspirations, and has ensured we have a strong succession plan in place. Brendan McAtamney, who joined us in 2013 with broad pharmaceutical and international market experience, has been a great addition to the team, and we are delighted to have him ready to step forward for a seamless transition.”