12 FLEXIBLE, VERSATILE, RESILIENT | MEDIA talk
UK MEDIA M&A
The COVID-19 pandemic has brought health to the fore, and it is not surprising to see a vibrant healthcare communications market as a result. The sector has been forced to quickly adapt to problems of limited accessibility and communication, by adopting digital mechanisms to communicate with patients and even in the provision of health needs. This rapid shift towards digitalisation will be a boon for understanding patient needs, and the amount and quality of data will also serve to improve marketing strategies. In one of the more significant deals struck in H1, the US-based PE firm Clayton, Dubilier and Rice (CDR) announced a take-private offer for Huntsworth Plc, a healthcare communications group, in March valuing the public company’s entire equity at GBP £399.7 million. The cash offer, which placed close to a 50% premium on the company’s share price at the time, was recommended by Huntsworth’s board and completed in May after passing the critical hurdle of getting approval from the High Court of Justice.
CDR already holds stakes in a number of healthcare-focused marketing services businesses and is likely to view Huntsworth as a strong platform to expand this presence. PE also played a supporting role in the management buyout (MBO) of Fishawack Group, a medical communications agency headquartered in Knutsford, UK. In a deal that completed in April, London-based Bridgepoint Advisers announced that it was undertaking the MBO in conjunction with the existing management of Fishawack for a total consideration of GBP £240 million. The company was acquired from LDC who exited Fishawack after backing an MBO in 2017 for GBP £38 million, a relationship which bore considerable fruit in terms of acquisitions and growth. The transaction will allow Fishawack to pursue further growth and market access, with the company making an immediate move to acquire US-based consulting firm Skysis.
Several factors are likely to affect UK M&A in the near future. The impending reality of Brexit is only now beginning to take form as it undecidedly approaches on the horizon. The odds of anything but a relatively limited agreement covering critical areas of trade, and leaving significant negotiations to carry on into the year ahead, are being reduced by the week. In addition, the pandemic has led to a raft of activity as the government explores options to shore up its own finances following their substantial stimulus measures. Investors in the UK will be monitoring the outcome of Chancellor Rishi Sunak’s surprise review of Capital Gains Tax (CGT). Carried interest is likely to be considered, as are a variety of alternative measures, all of which will make the review of interest to PE and other investors, but even a simple change in the level of CGT could have direct bearing on M&A.
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