Scapa Group in £29m wound care deal as profits slip
TECHNICAL tape specialist Scapa Group has bought a wound care products business for up to £29m as it sees continued growth in the healthcare sector, although overall profits have slipped.
The acquisition of New York-based EuroMed will see the Ashton-under Lyne based business make an initial cash payment of £24m, with a contingent deferred payment of up to £5m depending on performance.
EuroMed had sales of around £12.5m last year and Scapa said the acquisition is expected to be earnings enhancing in the first full year.
EuroMed specialises in developing and manufacturing gel-based advanced and consumer wound care products, including HydroSoft, an ultra skin-friendly hydrocolloid (gel) fixation technology whose low-trauma removal is ideal for fragile skin applications.
Last year Scapa made an organisational change from a cyclical European tape manufacturer, separating into two distinct businesses: healthcare and industrial.
The strategy has worked well – healthcare revenue increased 26.4% to £93.3m for the year to the end of March 2016 (2015: £73.8m).
That strong peformance helped overall group revenue grow 4.5% to £246.7m (2015: £236.0m), although pre-tax profits slipped to £9.8m (2015: £13.7m).
Heejae Chae, chief executive of Scapa, said: “We now have two resilient and robust businesses with an attractive outlook. Each business has its own clear, focused and distinct strategy that reflects and aligns to the dynamics of the markets in which it competes.”
The addition of EuroMed expands Scapa’s customer base geographically and broadens the group’s market accessibility in advanced wound care and consumer wellness.
Scapa said the deal plays to its strategy to increase its share of its customers’ total spend and become the outsourcing partner of choice as it sees an increasing trend towards outsourcing in the healthcare sector.
Chae said: “EuroMed has a strong and well established history of delivering high quality, innovative products and technologies which will bring added benefit to Scapa Healthcare’s customers in advanced wound care and consumer wellness. The acquisition further enhances our capabilities to be the single source for turn-key solutions to our global healthcare customers.”
