UDG Healthcare sells stake in supply JV to partner Alliance Boots

Mon Aug 18, 2014 3:50am EDT

Aug 18 (Reuters) - UDG Healthcare Plc said it had sold its 50 percent stake in a healthcare supply chain joint venture to partner Alliance Boots Holdings Ltd for 82 million euros ($110 million).

Dublin-based UDG said it expected to use part of the proceeds of 70 million euros to pay down debt.

The joint venture, UniDrug Distribution Group Ltd, provides pre-wholesale supply chain services to the healthcare industry in the UK, including storage, fulfilment and distribution.

The deal provides much-needed liquidity for UDG's acquisition strategy in its more valuable sales and marketing and packaging divisions, Jefferies analysts said in a note.

UDG Chief Executive Liam Fitzgerald said the convergence of the pre-wholesale and wholesale healthcare markets in the UK meant that the UniDrug business was no longer a good fit with UDG's core supply chain operations in Ireland and Northern Ireland.

Shares of UDG, former United Drug, were down 0.6 percent at 342.5 pence in early trading on the London Stock Exchange on Monday.

($1 = 0.7469 euros) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Ted Kerr)