£26m turnover medical products firm swoops for Lancashire rival
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Advised on deals worth £300m in the first half of 2017
Bolton-based medical products manufacturer Vernacare has acquired Lancashire company Synergy Health Healthcare Consumable Solutions (HCS) from owner STERIS for an undisclosed sum.
The two businesses will come together under the Vernacare brand.
Vernacare is a provider of single-use infection prevention systems to the healthcare sector, and employs 180 staff across the UK and overseas.
Latest accounts for the company, for the year to April 2, 2017, show the company’s turnover was £25.7m, up 7% from the 2016 figure of £24m. The company made a gross profits of £11.17m compared to £10.66m the prior year.
Vernacare’s products are sold to more than 50 countries and used by over 94% of NHS Trusts.
The acquisition follows financial backing from Palatine Private Equity in October, 2015 to accelerate the development of the company’s global footprint, as well as supporting future acquisitions.
HCS manufactures products for wound care and surgery, as well as hygiene wipes under the market leading brands of Conti and AZO.
The company employs around 100 staff at its Chorley production facility and headquarters, and its Preston warehouse.
Matt Miller, chief executive of Vernacare, said: “This acquisition will significantly increase the size of our business, and demonstrates the commitment of our investors, Palatine Private Equity, to the continued growth of Vernacare.
“In particular, there is huge potential for further overseas growth, where we can expand Vernacare’s strong market presence by introducing new products. It will also give us the opportunity to work more closely and broadly within the NHS and UK independent healthcare markets, enhancing our market position.
“Operations and activities continue as normal across the existing Bolton, Chorley and Walton Summit facilities. We look forward to working together productively and collaboratively during this exciting period of opportunity and growth.”
A spokesperson from STERIS said: “Both STERIS and Vernacare believe that Vernacare can better grow HCS product sales through its broad distribution network and complementary product offering.”
Andy Lees, partner at Palatine, said: “This acquisition is a strategic move for Vernacare and provides the business with a number of expansion opportunities.
“The addition of HCS allows Vernacare to broaden its product range and branch out into new areas of the healthcare industry to support further growth. The company already has a large presence in the global market, and this new offering will only boost its exporting opportunities.”
A KPMG team led by Jonathan Boyers advised HCS on its sale. A Deloitte team led by Jodi Birkett and Paul Maddison provided financial due diligence on HCS and the enlarged group. Sean Beech and Avril Edney provided tax structuring advice and debt advisory services were provided by Nigel Birkett and Dave Grassby.
Yunus Maka and Lee Brierley of DLA Piper provided legal advice to Vernacare.
Tosca Debt Capital (TDC) also provided second lien debt facilities alongside HSBC senior debt to support the acquisition of Synergy Health HCS and is the first deal to be funded out of Tosca Debt Capital Fund II, which held its first close last month at about £100m and is expected to have a final close at c£250m before the end of the year.
Richard Williams, a partner at TDC, added “Our experienced team of eight professionals, all Manchester-based, remain committed to regional businesses and focussed on a relationship led delivery.
“This approach is resonating with the local business community and investors alike, as has been demonstrated by the full deployment of our £100m Fund I during 2016/17 and the successful fundraising for Fund II during the last few months.”
