UDG sells stake in UniDrug

UDG Healthcare has sold its 50 per cent stake in healthcare supply chain specialist UniDrug to joint venture partner Alliance Boots.

The sale will allow UDG Healthcare to pay down its debts and to concentrate on other areas of its business, the company said in a statement.

UDG sold its stake for a cash consideration of $82m (€66m). The company received a net after tax profit contribution from UniDrug of €5.6m in fiscal year 2013.

UDG chief executive Liam Fitzgerald said that UniDrug had been a very successful investment for his company.

He added that its fit with UDG's core supply chain services in Northern Ireland and the Republic of Ireland was less close than before. This was due to the ongoing convergence of the pre-wholesale and wholesale markets in the UK, he explained.

“The opportunity to exit the joint venture allows UDG Healthcare to release over €80m to both reduce debt and for further investment in areas of our business which fit strategically with the future development of the group.”

Post-disposal, UDG's supply chain services division will remain an Alloga partner (pre-wholesaling) in the Republic of Ireland, and will continue to work with Alliance Boots on that basis.

The cash injection will allow UDG to follow its M&A strategy in two of the group's more profitable businesses.

Ashfield Commercial and Medical Services provides outsourced multichannel communications to healthcare professionals and patients in 22 countries. UDG created this division earlier in 2014 by bringing together a number of its agencies, later adding Galliard and Nyxeon.

Sharp Packaging Services provides pharma contract packaging and clinical trials materials services.