Clinigen ‘global footprint’ acquisition could cost £100m
BURTON upon Trent-based pharmaceuticals plc Clinigen Group is acquiring Link Healthcare in a deal which could cost £100m.
Link is a specialist pharmaceutical and medical technology business focused on the Asia, Africa and Australasia (AAA) region.
Clinigen will initially pay £44.5m but the deal price could reach a maximum of approximately £100m based on achievement of milestones.
The Midlands firm said the acquisition will significantly strengthen Clinigen’s global footprint and position in the AAA region with Link’s three key hubs in Singapore, South Africa and Australia and local operations in Hong Kong, Japan and New Zealand.
It said it will also will gain excellent local knowledge and expertise with Link’s well-established pharmaceutical and medical technology customer bases, access to local target customers of pharmacists and key opinion leaders in these regions.
Link is being acquired on a debt-free cash-free basis with the initial consideration of £44.5m comprising £22.25m in cash and the allotment of 3,102,558 new Clinigen shares, payable at completion.
The additional deferred consideration of up to £55.5m in cash depends on earn out targets being achieved in the years ending 30 June 2016 and 2017.
For the financial year ended 31 March 2015, Link achieved revenue of £31.6m and EBITDA of £4.2m.
The acquisition is expected to be immediately earnings enhancing.
John Bacon, group chairman and founder of Link, will be joining the Clinigen Board as a non-executive director upon completion of the acquisition.
Peter George, chief executive officer of Clinigen, said: “This strategic acquisition is a key step in our ambitions to strengthen and broaden our international distribution network across the AAA region – Asia, Africa and Australasia.
“Link, which is located in the three key hubs of Singapore, South Africa and Australia, has excellent local knowledge and connections as well as established customers.
“There is a strong, and increasing, demand for hospital-based oncology, anti-infective, orphan and other crucial drugs in pharmerging markets. Link will enable us to directly supply much needed, but not always licensed, medicines into these growing markets.
“Link will also support our underlying philosophy of getting the right drug to the right patient at the right time regardless of the location anywhere in the world.”
Clinigen also released its final results today which showed that in the year to June 30 revenue increased by 45% to £184.4m (2014: £126.6m).
Gross profit increased by 30%, mainly driven by 25% growth in Clinigen Specialty Pharmaceuticals’ gross profits and the acquisition of Idis Group Holdings in April.
Underlying EBITDA was up 20% to £32.3m (2014: £26.8m).
