Mediwatch agrees to be acquired in £8.5m deal
WARWICKSHIRE medical technologies business Mediwatch is to be acquired by Canadian firm Laborie after agreeing terms on an £8.5m deal.
The deal follows an initial approach from Laborie a month ago.
It is to be effected by way of a scheme of arrangement under part 26 of the Companies Act between Mediwatch and its shareholders. The deal is subject to shareholder approval.
Laborie is a portfolio company of Audax Private Equity Fund III, a private equity fund affiliated with Audax Management Company. It is a multinational developer, manufacturer and marketer of medical equipment and consumables used in the fields of urology and women’s health.
Its UK base is in Bristol.
The boards of Laborie and Mediwatch believe that a combination of Mediwatch and Laborie would create a comprehensive diagnostic product line that will meet the varied needs of physicians around the world and build a customer service network providing comprehensive technical support to customers around the world.
They also believe it will drive economies of scale across the supply chain.
Brian Ellacott, CEO of Laborie, said: “We believe that combining Mediwatch’s product portfolio with Laborie’s best in class R&D capabilities and sales network will enable us to better serve physicians and hospitals around the world.
“We expect to continue to build a suite of leading-edge products organically and through opportunistic acquisitions.”
Omer Karim, Chairman of Mediwatch, added: “The proposed acquisition by Laborie will bring many advantages for both the Mediwatch and Laborie businesses and the board believe the fit between the businesses is good.
“Although, the benefits of the corporate restructuring we have undertaken in the last 18 months are starting to come to fruition, we believe that the future outlook for our customers and employees would be significantly enhanced if we were part of a larger group.”
In June Mediwatch announced a disappointing set of results. The Rugby-based business said trading in the six months to April 30 was down at £4.9m (2012: £5.1m) which the group said was attributable to a decline in its UK market and the continuing slow growth of the US economy.
It said revenue in the UK (which services Europe and the rest of the world) had declined and, following the failed attempt to partner with Genesis in a move to boost sales, its UK sales team had been restructured to reduce cost.
Birmingham-based advisory firm Cattaneo played a key part in the deal.
The firm’s Charles Cattaneo, who is a non-executive director at Mediwatch, said: “We are delighted to have found a partner for Mediwatch that can take the business forward to its next stage in its development.
“The offer price, representing around 28 times the market estimate earnings for the year just ended, reflects the strength of the combined business which will offer a comprehensive diagnostic product portfolio with technical support across the world as well as a platform for accelerated innovation through the combination of two leading research and development teams in their fields.”
Mediwatch was advised by David Facey, Katy Birkin and Liz Yong of SP Angel and legal advice was provided by Amerjit Kalirai of Field Fisher Waterhouse. Laborie was advised by Daniel Adams (Investec) with legal advice provided by Christian Lowis and Daniel O’Gorman of DWF in Birmingham.
