UDG Healthcare announced strong results at their AGM; Brendan McAtamney is the man behind it.
UDG Healthcare announced this week it expects adjusted earnings per share to increase by 18 to 21 per cent in 2018, ahead of last year’s earnings per share of $37.1c for year-ended 30 September, 2017. The increase was driven by strong trading in the first quarter and gains from the US tax reforms, with a reduction in the headline US federal corporate tax rate to 21 per cent from 35 per cent. A significant portion of UDG’s earnings come from the US part of its business. Operating in 24 countries, with over 9,000 staff, UDG has a €2.4bn market value.
The company, which provides outsourced sales and marketing, drug distribution and packaging services to healthcare companies, said the increase in pre-tax profit in the first quarter on last year was also helped by acquisitions. The company made six acquisitions in 2017, worth a total of €230 million, and announced four were performing in line with expectations.
A natural fit
The man behind the impressive results announcement is CEO Brendan McAtamney. McAtamney stepped into the role of chief executive of healthcare services provider UDG at the company’s AGM in February 2016, taking over the role from previous CEO Liam Fitzgerald. Brendan had joined the London-listed company as COO in 2013, from another global healthcare company, Abbott.
With a BSc from Maynooth and an MBA from UCD, and experience within the pharma industry, he was well placed to head up UDG, with its recognised brands, Ashfield and Sharp and their growing footprint in North America. His main priority, according to an interview with The Times of London recently that the right talent is his main preoccupation, and said, “In a services business, it’s all about the people.”
Having worked closely with Liam Fitzgerald he was already closely involved in the fundamentals of the business and the ongoing development of strategy including M&A activity. Formed in Ireland in 1948, as United Drug, UDG was in the main a distribution company until 2000. UDG Healthcare has evolved extensively over the past 20 years, in large part due to M&A activity and internationalisation. The company has completed 14 deals and deployed $500m since 2012.
The acquisitions approach
In an interview with Pharma Boardroom this time last year, Brendan said, “Generally speaking, we have a simple three-lens approach to asset acquisition. First is the strategic fit of the capability, second is the financial return and third is the cultural fit, as we are a people-based company.”
In relation to Ashfield, provider of contract services to the Irish pharmaceutical industry, he told Pharma Boardroom, “Our strategy is to build capabilities from the clinical line to the commercial line, meaning from market access, to advisory and consulting, then to content communications and finally to commercialization. We are looking to do that in major markets of the US, Europe and Japan, which are still by far the largest value drivers of the pharmaceutical market today, and will remain so. We aim to have leadership positions in those markets, so we are focused on building capabilities in those key geographies to ensure we deliver on this objective.”
Serialisation (the tracking and tracing of prescription drugs) is an important business area, with Sharp, the packaging and serialisation division, one of the key parts of the group. Brendan said last year “In Sharp we are focused more on capital expenditure. We have recently completed a $45 million expansion of our production capacity in the US, increasing our capacity by 30%, which gives us great opportunities for growth.”
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