THE march of US private equity into London listed shares continued today with a £2.6 billion bid for UDG Healthcare.
Clayton, Dubilier & Rice is paying 1023p a share for the healthcare outsourcing business, a more than 20% premium to the price last night.
That premium seems indicative of the view that foreign investors value many UK businesses more highly than the City does.
And that private equity is sitting on a huge cash pile -- $1.7 trillion worth by some estimates – that it is looking to deploy post pandemic.
Healthcare deals in particular are likely to prove attractive at the moment.
UDG, which is headquartered in Dublin, specialises in healthcare advisory, communications, commercial, clinical and packaging services.
UDG Chairman Shane Cooke said: “We believe that this is an attractive offer for UDG shareholders, which secures the delivery of future value for shareholders in cash today.”
The shares moved in to line with the bid price, indicating that the market expects the deal to go through.
UDG has two divisions - Ashfield and Sharp - and employs about 9,000 people in 29 countries.
CD&R partner Eric Rouzier said: "UDG has long established itself as a leading provider of high-value services to pharma and biotech companies globally, supported by a highly skilled workforce.”
CD&R was founded in 1978, making it one of the most long-standing private equity houses. It has stakes in B&M Retail, Hertz and Kinko’s among many others.
UDG also reported half-year results to the end of March, showing profit up 10% at $82 million on revenue down 5% at $664 million.