Scapa in £15m health care swoop
BONDING materials manufacturer Scapa Group has revealed a strategic acquisituion of a British company operating in the woundcare market.
The Manchester listed company is buying Wiltshire-based First Water for an initial £11.3m, rising to £15.3m dependant on performane over the next three years. The deal will be funded from existing cash reserves and bank facilities.
First Water, located in Ramsbury, has unaudited gross assets of £4m. Underlying EBITDA for the 12 months to 31 January 2015 was £900,000 on sales of £5.4m.
It has built a reputation as one of the leading designer-manufacturers of advanced wound dressings and skin adhesives. Its patented adhesive polymers and dressing designs allow it to offer its OEM partners – typically multinational woundcare and consumer wellness companies – unique and compelling products for a wide range of clinical and commercial applications.
Scapa said it sees growth potential in the outsourced healthcare sector abd the addition of First Water’s patent portfolio and technological know-how to its materials, coating and conversion capabilities “significantly enhances the value proposition to our customers.”
First Water’s management team will remain within the enlarged group.
Scapa chief executive Heejae Chae: “The acquisition of First Water further enhances our strategy in healthcare to provide turn-key solutions as a strategic outsourcing partner to our global customers.
“First Water has a strong track record of delivering proven proprietary innovations and technologies which Scapa can now offer to our customers in consumer wellness and advanced woundcare markets in addition to expanding our offering in the medical device and drug delivery markets. Combining Scapa’s strengths in material coating, converting and packaging with First Water’s R&D and innovation capabilities will enable us to provide a unique one stop solution to our customers.”
Justin Barnes and Phil Andrews, co-owners and directors of First Water, added: “Becoming part of Scapa’s rapidly growing global Healthcare business is a very exciting new chapter in First Water’s development.”
Meanwhile, Scapa said in a brief trading update, that it is expecting another strong year “despite currency headwinds” and that trading profits will be ahead of market expectations.
The company said it would issue a pre close update on the 9 April 2015.
A team at Deloitte in Manchester, led by Richard Bell and Paul Maddison, provided buy side financial due diligence, while Mark Stevenson and Anna Keogh provided tax due diligence. Legal advisers were Elia Montorio (corporate) and David Thompson (tax) from DLA Piper.
