CD&R Agrees to Buy UDG Healthcare for About $3.9 Billion


Clayton, Dubilier & Rice agreed to buy UDG Healthcare Plc for a sweetened offer of about 2.8 billion pounds ($3.9 billion) in cash after winning the backing of key shareholders.

The price amounts to 1,080 pence a share, the companies said in a statement Tuesday. Last week, CD&R said it was considering raising its offer to that level after some of Dublin-based UDG’s largest investors complained that a previous bid was too low.

The pace of health-care acquisitions has accelerated during the pandemic, and UDG, which provides a range of services to pharmaceutical customers in about 25 countries, said last month it’s supporting clients in bringing Covid-19 treatments and vaccines to market. UDG said Tuesday it has not received offers from any other bidders since CD&R submitted its original bid.

Shares of UDG rose 0.5% to 1,071 pence in early London trading. The stock has climbed 37% this year.

Shareholder Backing

CD&R’s said its improved bid has the backing of UDG’s largest shareholder, Allianz Global Investors, which had criticized the initial offer as “opportunistic,” as well as Kabouter Management LLC. The companies made no mention of activist investor Elliott Investment Management, which recently built up a position in UDG.

The opposition to the initial offer reflects a wider concern that private equity companies are taking advantage of lower market valuations owing to Brexit and the pandemic to try and buy firms for less than they are worth.

CD&R has also set its sights on WM Morrison Supermarkets Plc, making an approach with a proposed 5.5 billion-pound offer for Britain’s fourth-largest grocer earlier this month. The supermarket rejected it, however, and said it significantly undervalued the business.

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