UDG Healthcare in $22 million deal for US management consultancy Vynamic

24 July 2017 Consultancy.uk 3 min. read

Pharmaceutical conglomerate UDG Healthcare has sealed a $22 million deal to purchase American management consulting firm Vynamic. The fee could rise a further $10 million depending on Vynamic’s post-sale performance.

Dublin-listed UDG Healthcare has completed the purchase of US-based healthcare management consultancy Vynamic, in a deal worth up to $32 million including additional fees. Vynamic’s primary service offerings include brand strategy, planning and launch, advanced commercial operations capabilities, strategic transformation and integration, product design and implementation, change leadership and business intelligence and analytics. The firm has meanwhile received multiple national commendations for its work, including being named a top IvyExec boutique management consultancy in the United States in 2016.

The acquisition of the consulting firm Vynamic will see the Philadelphia-headquartered company integrated into UDG's Ashfield division, which provides the pharma and healthcare industries with commercialisation services. This latest deal for Vynamic will see UDG pay $17 million of the $22 million fee up front, with the potential for a further $10 million (£8 million) if triggered by certain post-sale profit targets.

UDG Healthcare reported in May that it had put in a solid performance in the first half of the year, upping its full-year guidance by 2%. Revenues rose by 8% in the six months to March 31st to $578.9 million, while operating profit rose by 13% on a constant currency basis to $58.8 million. They subsequently saw profits before tax climb by 19% to $52.9 million, further emboldening the business’ drive for reinvention, with the company formerly known as United Drug now wielding a war chest of between $500-$600 million, as the group seek to supplement their organic growth with a heavy campaign of acquisitions.

UDG Healthcare in £22 million deal for US management consultancy Vynamic

The pharmaceutical industry has spent more than $2.4 trillion on mergers and acquisitions over the past ten years. Across the previous decade, the industry has been responsible for an average of 9% of total global M&A deal activity, and this deal comes as the Ashfield division and UDG both see to expand their advisory services to the healthcare industry and follows the acquisition of STEM in October 2016. It is the Group’s first management consultancy acquisition and offers services which are highly complementary to the existing range of services provided by Ashfield. After selling their legacy distribution businesses in order to focus on higher margin areas meanwhile, UDG also indicated it had received competition clearance for purchase of Sellxpert, a German contract sales outsourcing business. UDG will pay $14.4 million for the business, on top of the deal for Vynamic. 

UDG Healthcare chief executive Brendan McAtamney said, "Vynamic is an excellent fit for UDG Healthcare, both strategically and culturally, and demonstrates our strategic commitment to developing our market-leading positions through geographic and services expansion."

Vynamic Founder and CEO, Dan Calista meanwhile commented, “Joining UDG Healthcare creates tremendous value for our clients and the people of Vynamic. We will have additional capabilities to service clients around the world, while creating new career opportunities for our people in a company culture that aligns with Vynamic’s values.”