PE Firm CD&R Agrees To Buy UDG Healthcare In A $3.7B Deal


The private equity firm Clayton, Dubilier & Rice (CD&R) has agreed to pay $3.7 billion for UDG Healthcare, a provider of clinical, commercial, communication and packaging services to healthcare companies. The $3.7 billion cash offer represents a 21.5% premium to UDG Healthcare’s closing price before the deal’s announcement.


In a statement, CD&R partner Eric Rouzier said, "UDG has long established itself as a leading provider of high-value services to Pharma and Biotech companies globally, supported by a highly skilled workforce. CD&R has a strong record in partnering with management teams and we look forward to working with the UDG team to build on their success and help accelerate UDG's growth and the development of its services offering to clients."


Based on the acquisition price, UDG is valued at 17.2x EBITDA. CD&R is optimistic that some of the structural changes the firm will make to UDG’s operations will help to justify the multiple, including combining the company’s two divisions.


It’s also hoping that the increasing pace of innovation in the pharmaceutical industry will prove a major tailwind.