PaperAge Magazine

SCA to Acquire BSN medical for EUR 2.74 Billion

BSN medical BSN medical, with about 6,000 employees, develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics.

Dec. 19, 2016 - SCA has entered into an agreement to acquire BSN medical, a leading medical solutions company, from the private equity group EQT. BSN medical develops, manufactures, markets and sells products within wound care, compression therapy and orthopedics.

The purchase price amounts to EUR 2,740 million* 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 second quarter 2017.

BSN medical is an innovative medical solutions company with well-known brands such as Leukoplast, Cutimed, JOBST, Delta Cast, Delta Lite and Actimove which are long established brand leaders in their key markets. BSN medical has a strong go-to-market and supply chain with sales in more than 140 countries and production in 11 countries. BSN medical has approximately 6,000 employees.

“The BSN medical acquisition is an excellent strategic fit for SCA supporting our vision to improve well-being through leading hygiene and health solutions, two closely interlinked areas,” said Magnus Groth, President and CEO, SCA. “BSN medical has leading market positions in several attractive medical product categories and provides a new growth platform with future industry consolidation opportunities. Our incontinence business, with the global leading TENA brand, shares similar positive market characteristics, customer and sales channels, which provide opportunities for accelerated growth through cross-selling.”

“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,” Groth expained.

“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,” Groth added.

In relation to the acquisition, SCA expects to realize annual synergies of at least EUR 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 EUR 10 million and are expected to be incurred in the first three years following completion.

Transaction costs amount to approximately EUR 25 million of which approximately EUR 15 million will be recognized as an item affecting comparability during Q4 2016. The remaining costs will be recognized as an item affecting comparability during Q2 2017.

The acquisition will be fully debt funded and SCA has committed credit facilities in place.

Note: *Based on an estimated net debt as per December 31, 2016, of EUR 1,340 million.

SCA is a leading global hygiene and forest products company. The Group develops and produces sustainable personal care, tissue and forest products. To learn more, please visit: www.sca.com.

SOURCE: SCA (Svenska Cellulosa AB)