Fast-growing Ascendis Health has hit the ground running again on the acquisitions front, snapping up three deals in three days.
On Wednesday, the healthcare conglomerate announced the acquisition of two offshore businesses, which will grow its exposure in the European market.
Ascendis, with a market capitalisation of R9.1 billion (at time of writing), will acquire Cyprus-based nutraceutical company Natural Health Pharma (NHP) for up to €49.1 million (R679 million) and Romania-based Sunwave Pharma for €16.35 million (R255 million).
Sunwave, which specialises in marketing its products directly to the doctor community, marks Ascendis’ foray into Eastern Europe.
Ascendis CEO Karsten Wellner, says Sunwave gives it an attractive platform to enter high growth over-the-counter markets in Romania and Eastern Europe.
Wellner says Ascendis has already identified multiple potential synergies and cross-selling opportunities with its existing wellness and over-the-counter ranges. Both deals will be funded through cash.
The acquisition of Sunwave and NHP follow its announcement on Tuesday that it will acquire the Southern African veterinary operations of Cipla India for R375 million. This follows the decision by Cipla India to divest in its veterinary operations to focus on human healthcare in SA.
The veterinary operations are segmented into Cipla Vet (companion animals) and Cipla Agrimed (commercial animals), selling a wide range of animal medicines including antibiotics, ectoparasiticides, antimicrobials, endoparasiticides and endectocides.
Wellner says the animal health businesses would allow it to expand into the veterinary drug market, which has high margin products.
Ascendis has three divisions: the consumer brands division (nutraceuticals, complementary medicines, sports nutrition and derma-cosmeceuticals), pharma-med (prescription and over-the-counter drugs, medical devices) and phyto-vet (plant and animal health and care).
The company’s acquisitions over the past year have largely focused on its consumer brands division but Ascendis has been determined to grow its phyto-vet division.
“We put the rods out and the fishes [potential deals] keep biting,” says Wellner on its latest deals.
He says the company’s quiet corporate activity in recent months was due to banks that didn’t want Ascendis to conclude deals until it integrated its newly acquired businesses Remedica (Cyprus-based pharmaceutical manufacturer) and Scitec (European sports nutrition business) into existing ones.
The focus will be on bolt-on acquisitions in Europe, emerging markets and in SA. In its arsenal is approximately R750 million in funds available for acquisitions in the next 12 months.
Its latest pair of acquisitions was announced along with its interim results. For the six months to December 31, Ascendis grew its revenue by 66% to R3.1 billion while its normalised Ebitda increased by 89% to R541 million.
Its headline earnings per share declined by 15% to 41.4 cents due to the 46% increase in shares issued to fund its acquisition Remedica and Scitec.
Ascendis grew its dividend per share by 16% to 11 cents per share.
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