Huntsworth Agrees GBP400 Million Cash Offer From US Private Equity

(Alliance News) - Huntsworth PLC on Tuesday posted a rise in 2019 profit and said that it has ...

Alliance News 3 March, 2020 | 10:46AM
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(Alliance News) - Huntsworth PLC on Tuesday posted a rise in 2019 profit and said that it has agreed to a cash takeover offer valuing the company's share capital at GBP400 million.

CD&R Artemis UK Bidco Ltd, an entity formed by US private equity Clayton Dubilier & Rice LLP, will pay 108 pence per share in cash for healthcare and communications firm Huntsworth. This represents around a 50% premium to the company's 72.0p per share Monday closing price.

On Tuesday morning, shares in Huntsworth were up 51% at 109.00p in London.

The implied enterprise value of the acquisition, intended to be implemented through a court-sanctioned scheme of arrangement, is GBP524 million.

The deal has been unanimously recommended by Huntsworth's directors. Clayton Dubilier has received irrevocable undertakings from Merian Global Investors (UK) Ltd and Hargreave Hale Ltd- holding a combined 14% take in Huntsworth.

Letters of intent to vote in favour have also been received from Aberforth Partners LLP, Kabouter Management LLC and Kames Capital, holding a combined 22% stake. With these and director acceptances, Clayton Dubilier has acceptances representing 37% of Huntsworth's share capital.

Huntsworth's 2019 pretax profit totaled GBP29.8 million, up 4.2% from GBP28.6 million. This resulted from an 18% revenue rise to GBP264.9 million from GBP225.0 million, including a 32% rise in Marketing revenue to GBP108.3 million from GBP82.0 million and 32% Medical revenue rise to GBP45.1 million from GBP34.2 million, thanks to acquisitions.

The company has proposed a final 1.85p per share dividend, taking the total for 2019 up 13% to 2.6p per share from 2.3p per share.

Huntsworth Chief Executive Paul Taaffe said: "Huntsworth had yet another record year led by growth in our Medical and Immersive divisions and a return to growth in Communications. Organic revenue growth accelerated over the course of the year and the acquisitions of Kyne in Marketing and Creativ-Ceutical in Medical both contributed to 2019 performance and further enhanced our capability to attract larger and higher-margin client engagements.

"We have entered 2020 well positioned for another year of growth with strong momentum at the start of the financial year and an increased new business pipeline."

On the takeover offer, Taaffe said: "Whilst we believe that Huntsworth is strongly positioned as an independent listed company, the all-cash offer from CD&R represents a compelling opportunity for shareholders to realise an attractive cash value in respect of their shares."

By Anna Farley;

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Huntsworth PLC

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