DCC buys Kent Pharmaceutical

DCC has bought UK generic drugs business Kent Pharmaceutical for an initial €68.1 million.

The deal, which is conditional on approval from Irish competition authorities, is expected to transform the UK business of DCC Healthcare.

Kent manufactures generic formulations of well-established drugs such as amoxicillin and penicillin V, which are used to treat bacterial infections. It employs 304 people, including 126 at its Athlone Pharmaceuticals antibiotics plant in Ireland.

The company reported sales of €89.9 million last year, and adjusted earnings before interest, tax, depreciation and amortisation of €10.7 million.

The companies expect to complete the deal early next year, with the benefits feeding through to DCC’s 2014 financials.

Management stands to make a further €6.7 million from the acquisition if Kent hits certain targets over the next three years.

DCC chief executive Tommy Breen said the acquisition was a material step forward for DCC Healthcare.

“For some time DCC has believed that there is an opportunity to build a substantial pharma business principally focused on established niche generic products that are a number of years past patent expiry.

“Such products are well-positioned to benefit from the macro trend for healthcare systems to seek to meet the increasing demands of ageing populations with more cost-effective healthcare solutions,” said Mr Breen.