Shares in international healthcare services provider UDG Healthcare soared over 20% in London trade today after it said it has accepted a takeover bid that values the firm at £2.61 billion.
The firm said it has agreed to an approach, backed by US private equity firm Clayton, Dubilier & Rice, that will see it sell shares at a more than 20% premium on its closing price in London yesterday.
UDG, which has its headquarters in Dublin, specialises in healthcare advisory, communications, commercial, clinical and packaging services.
It has strong market positions in the pharma services space and it employs around 9,000 people in 29 countries.
Both its Ashfield and Sharp businesess operate in large and growing markets, underpinned by continued growth in new drug development and approvals, increasing therapeutic and drug complexity and continued outsourcing from pharma and biotech clients.
The deal is expected to be declared effective during the third quarter of 2021, subject to the requisite approvals of UDG Shareholders and regulatory approvals.
UDG Chairman Shane Cooke said the company has transformed since disposing of its supply chain business in 2015, through a combination of sustained long term organic growth and strategic bolt on acquisitions.
"While the UDG board remains confident in the long term fundamentals of the group, we believe that this is an attractive offer for UDG shareholders, which secures the delivery of future value for shareholders in cash today," Mr Cooke said.
"The offer reflects the quality, strength and long term performance of UDG's businesses and its future growth potential.
"We believe that our people, our clients and our businesses will continue to prosper under the stewardship of CD&R, " he added.
UDG Healthcare also today reported half year results to the end of March, which show thats its adjusted operating profit before tax increased by 10% to £82.4m from £75m the previous year.
Revenue for the six month period dipped by 5% to £661.4m from £693.6m
UDG reported a good performance across both parts of Ashfield with adjusted operating profit up 7% against a strong comparative period, while it also saw a continued strong performance from Sharp with adjusted operating profit increasing by 19%.
UDG said its board is not proposing an interim dividend for 2021.
Chief executive Brendan McAtamney said the company's strong trading performance was predominantly driven by underlying operating profit growth across both Ashfield and Sharp, supplemented by the benefit of recent acquisitions.
"We continue to expand the range of services we offer clients across many therapeutic areas including several Covid-19 related projects," the CEO said.
"Additionally, we continued to execute strategic acquisitions, committing $80m to date in FY21, expanding our capabilities in market access and patient support programmes, and further growing our presence across the UK, EU and US," he said.
"Looking ahead, our businesses remain resilient, supported by their market leading positions and compelling service offerings, underpinned by excellent long-term market fundamentals," he added.