Halma has acquired a company which makes devices for early detection and prevention cervical cancer.
The FTSE 100 manufacturer of health and safety products has reached an agreement for Rovers Medical Devices to receive up to €91m. Rovers Medical Devices is the world’s leading producer of brushes that are used to collect cell samples for the treatment of cervical cancer. The company is based in Netherlands and its products are sold in over 90 countries.
The World Health Organisation is increasing its efforts to detect cervical cancer. This will increase demand for Rovers’ products.
Halma acquires the company for €85 million upfront and up to €6 millions in performance-based payments. The extra cash payment will be based on Rovers’s performances until the end March of next year. The deal will be financed through Halma’s existing debt facility.
Marc Ronchetti (47), the 47-year-old group chief executive officer of Halma said: “Rover is going to broaden our range of products and services in women’s healthcare, as well as strengthen the position of the healthcare sector in cancer diagnostics.
We are excited about the possibilities we see for increasing Rovers’ positive impact on public healthcare. The World Health Organisation has a strategy to speed up the detection of cervical cancer. We expect that the growth in the future will be driven by the global increase in cervical screening rates.
According to a HSBC analysis, Rovers could increase Halma’s total revenue by 0.5 percent and its adjusted operating profit by 1.4 percent.
Stephen Klepp said that the transaction was in line with Halma’s business strategy and looked like a Halma deal. As the importance of cervical cancer screenings increases, so too should Rovers’ role as a distributor of sample collection brush.
The broker Shore Capital said that the market for cervical cancer was a growing one and the screening rate is likely to rise, particularly in developing countries, due to the low screening rate.
Halma shares closed at £22.99, down 0.1 percent or 3p.