UDG raises earnings growth forecast, sees deal paying off

Reuters - UK Focus

* Expects EPS to grow 5-9 pct vs prior view of 2-5 pct

* Sees KnowledgePoint360 revenue of $100 mln, EBITDA of $16mln a year

* Ashfield first-half operating profit rises 36 pct

* Shares rise as much as 3.25 pct (Adds CEO comments; updates share movement)

May 14 (Reuters) - Healthcare services (NasdaqGS: HCSG - news) provider UDGHealthcare Plc raised its full-year earnings per sharegrowth forecast as it expects the recent acquisition ofKnowledgePoint360 to boost its commercial and medical servicesbusiness.

The company, which provides outsourced sales and marketing,drug distribution and packaging services to healthcarecompanies, now expects adjusted EPS to grow 5-9 percent on aconstant-currency basis, compared with its prior forecast of a2-5 percent growth.

Shares in the company rose 3.25 percent in early trade,pushing the stock into the list of top percentage gainers on theFTSE-250 Midcap Index.

UDG Healthcare (LSE: UDG.L - news) , earlier known as United Drug, boughthealthcare communications business KnowledgePoint360 for $144million in late February to expand in the United States andEurope.

The company said adjusted operating profit rose 2 percent to45.0 million euros ($62 million) in the six months ended March31.

This growth was driven by a 36 percent jump in operatingprofit at its Ashfield Commercial and Medical Services division,which houses KnowledgePoint360.

"We are encouraged by the performance of Ashfield which weestimate will be the group's largest profit contributor fromH214 onwards," Goodbody Stockbrokers analyst David O'Brien saidin a note.

Ashfield division provides sales teams, telesales, nurseeducators, medical information, healthcare communications andevent management services to healthcare companies in 22countries.

UDG Healthcare Chief Executive Liam FitzGerald told Reutersthat he expects KnowledgePoint360 to bring in revenue of $100million and EBITDA of about $16 million a year.

KnowledgePoint360 was UDG Healthcare's biggest acquisition.

"Given the size of the KnowledgePoint360 deal, there will bea period of consolidation now before we look to grow thebusiness through acquisitions in the future," Fitzgerald added.

KnowledgePoint360 provides medical education, publicationsupport and scientific content development to globalpharmaceutical companies.

Revenue rose 2.34 percent to 1.04 billion euros in the sixmonths ended March 31, the company said.

Davy Research analyst Jack Gorman said in a note to clientsthat the addition of KnowledgePoint360 should ensure strongearnings acceleration for the company in the second half of theyear.

Shares in UDG Healthcare were up 1.8 percent at 366.7 penceat 1050 GMT on the London Stock Exchange (Other OTC: LDNXF - news) . The stock has nearlydoubled in value since the company delisted from the Irish StockExchange in late 2012. ($1 = 0.7296 Euros) (Reporting by Roshni Menon in Bangalore; Editing by Sunil Nairand Don Sebastian)

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