SCA has entered into an agreement to acquire BSN medical, a leading medical solutions company, from the private equity group EQT. The purchase price amounts to Euro 2.74 billion on a debt- and cash-free basis. The completion of the transaction is subject to customary regulatory approvals. Closing is expected to take place during the 2Q 2017, as the company says in the press release received by Lesprom Network.

BSN medical develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics.
The acquisition is expected to be accretive to SCA’s earnings per share from year one. BSN medical has high cash conversion and an asset light business model.

“BSN medical provides an opportunity for SCA to expand our market presence through adding adjacent medical product categories with shared underlying market and customer characteristics of our incontinence business. This acquisition will significantly strengthen SCA’s customer offering, channel presence and market access. This will further strengthen and develop SCA’s global market leading position within incontinence products under the TENA brand. At the same time, the BSN medical business will benefit from SCA’s strong presence in healthcare and retail sales channels as well as SCA’s extensive knowledge in brand building and focus on digitalization,” says Magnus Groth, President and CEO, SCA.

In relation to the acquisition, SCA expects to realize annual synergies of at least Euro 30 million with full effect three years after closing. These include sales synergies from accelerated growth from cross-selling of BSN medical products and SCA incontinence products as well as cost synergies primarily in supply chain and administration. Restructuring costs are expected to amount to approximately Euro 10 million and are expected to be incurred in the first three years following completion.

Transaction costs amount to approximately Euro 25 million of which approximately Euro 15 million will be recognized as an item affecting comparability during 4Q 2016. The remaining costs will be recognized as an item affecting comparability during 2Q 2017.
The acquisition will be fully debt funded and SCA has committed credit facilities in place. SCA remains fully committed to retaining solid investment grade rating.