Johannesburg - Ascendis Health had received the green light from the Competition Commission to proceed with the 100 percent acquisition of pharmaceutical business Akacia Healthcare for R345 million, the health and care brands company announced yesterday.
The share price was trading 0.58 percent higher yesterday to close at R22.60.
Ascendis Health entered into an agreement to purchase Akacia in November.
Read: Ascendis benefits from its expansion
The company said the Akacia deal would strengthen Ascendis’ position in the prescriptions and consumer health markets, while adding leading brands, such as the probiotic Reuterina – which is ranked number one in the antidiarrhoeal market, with more than 30 percent market share, as well as household brands such as Sinucon and Sinuend, which are in the top three brands in the cold and flu market.
Ascendis chief executive Karsten Wellner said the deal had had to pass a few conditions before getting the go-ahead. “The competition commission of South Africa had already given their unconditional approval on February 17. However, there were a few conditions precedent with the sellers which were not fulfilled, and which were closed this week,” Wellner said.
In its interim results from December to March, the group said its profit rose to R147m from R88m. Headline earnings grew 48 percent to R131m, with headline earnings per share up 37 percent to 49c.
Backed by a solid balance sheet, Ascendis Health is eyeing further acquisitions both in South Africa and internationally, despite the slowdown in the local economy.
“In order to have a natural hedge against imported inflation due to a weak rand, we need at least 30 percent of our sales to come from hard currency-based sales. We have not reached that yet. Therefore, we are pushing hard right now to achieve that via export growth into hard currency markets and acquisitive growth in Europe and Australia,” Wellner said.
In South Africa, the company was aiming for 10 percent growth, as well as “strategic bolt-on acquisitions” to add to its health and care platforms, he said.
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