LONDON: Huntsworth plc, the healthcare and communications group, has announces the acquisition of 70% of Creativ-Ceutical S.A.R.L. (CC), a Luxembourg company, from 100% shareholder Avicenne Invest S.A., a company connected to CC’s founder Pr Mondher Toumi for an initial cash consideration of €15.5 million; and the acquisition of 85% of Kyne Communications, LLC and Kyne Communications Limited through direct and indirect interests from founder and majority shareholder David Kyne and his wife Jacqueline Kyne together with associates for an initial cash consideration of $17.4 million.[the_ad id=”31605″]The Group also announced a successful placing raising gross proceeds of £16.3 million to part-fund the acquisitions, with the balance (approximately £12 million) to be funded from existing debt facilities. The Group expects both acquisitions and the placing together to be accretive.
CC is a strategic market access, health economics and outcomes research consultancy. The business will sit within the Group’s Medical division and will continue to be led by founder Pr Mondher Toumi, one of the global leading experts in this increasingly strategic important area in the development of new drugs. The business is headquartered in Luxembourg with principal operating units in Poland, Tunisia and Paris. It serves global pharmaceutical and biotech clients but also governmental organisations including the World Bank and the European Commission.
The consideration for 70% of the equity of CC consists of an initial cash consideration on closing of €15.5 million, together with two tranches of deferred consideration payable: the first in 2020 based on EBITDA for the year to 31 December 2019; and the second in 2021 based on a multiple of EBITDA for the two years ending 31 December 2020, both pro-rata for the 70% equity stake.
The initial cash consideration will also be subject to adjustment for working capital and net cash as at completion. Equal put and call options will be held over the 30% minority interest, exercisable in April of each year commencing in 2023 and allowing for the sale or purchase of the minority interest on a multiple of EBITDA, plus a payment in respect of any distribution payable in respect of the year in which the option is exercised, pro-rata for the 30% equity stake.
Huntsworth is entitled to settle any deferred consideration and any consideration due under the put and call either in cash, by the issue of ordinary shares in the Company or by a mixture of cash and the issue of shares. The maximum aggregate consideration (excluding any adjustment to the initial consideration for working capital) payable by Huntsworth for 100% of the equity of CC is capped at €75 million.
CC generated revenues of c. €10.6 million and operating profits of c. €4.1 million in the year to 31 December 2018. CC’s gross assets were c. €16.4 million as at 31 December 2018.
KYNE is a health communications agency providing public relations and patient advocacy services to a broad range of pharmaceutical and biotech clients, as well as working with a number of foundations to support their goals on disease awareness and eradication.
The business will sit within the Group’s Marketing division and will continue to be led by founder David Kyne. It is a recent winner of several industry awards for its work and was named the Holmes Report 2018 Boutique healthcare agency of the year. KYNE operates from principal offices in New York, Los Angeles, Dublin and London.
The consideration for 85% of the equity of KYNE consists of an initial cash consideration on completion of $17.4 million together with a net asset adjustment (if applicable) payable after completion and deferred consideration payable in 2021 based on a multiple of EBITDA for the two years ending 31 December 2020, pro-rata for the 85% equity stake.
Equal put and call options will be held over the 15% minority interest, exercisable in April of each year commencing in 2023 and allowing for the sale or purchase of the minority interest on a multiple of EBITDA, pro-rata for the 15% equity stake. Huntsworth is entitled to settle any deferred consideration and any consideration due under the put and call either in cash, by the issue of ordinary shares in the Company or by a mixture of cash and the issue of shares. The maximum aggregate consideration (including any net asset adjustment (if applicable)) payable by Huntsworth for 100% of the equity of KYNE will be capped at $70 million.
KYNE generated revenues of c. $10.2 million and operating profits of c. $1.3 million in the year to 31 December 2018. KYNE’s gross assets were c. $3.5 million as at 31 December 2018.