Johannesburg - Ascendis Health [JSE:ASC] announced that it has agreed to acquire the majority of The Scientific Group, comprising its diagnostics business (SG Diagnostics), for R283.7m in a structured cash and shares deal.
“SA and global health care swiftly embrace the benefits of new diagnostic and preventative technology and SG Diagnostics offers Ascendis an immediate and resilient presence into this highly specialised market. In addition, SG Diagnostics is a well-managed, high growth and strongly cash generative business,” said Ascends CEO Dr Karsten Wellner.
The deal excludes the Scientific Group medical devices business, which represents a minor part of the business. It will be sold back to the selling shareholders.
The medical devices businesses within the Pharma-Med Division of Ascendis Health have been important drivers of growth for Ascendis, via the established platform of Surgical Innovations and the recently acquired Respiratory Care Africa business (Ascendis Medical).
“This acquisition represents an active and growing market within the local and international holistic health care industry with exports accounting for 40% of SG Diagnostics’ sales and particularly strong sales growth experienced in both Botswana and Zambia, providing us with new channels through which we can accelerate our African expansion and export strategy,“ said Wellner.
“This is a meaningful value added deal for Ascendis as SG Diagnostics would have contributed a further R32.8m profit after tax towards Ascendis’ earnings on a historic annualised basis, resulting in a pro-forma 12% increase in our published June 2014 annual earnings per share and making our medical platform a very well positioned representing leading brands.”