Major new UK company as Seton and Scholl merge
This article was originally published in Clinica
Seton Healthcare is continuing its drive for growth by merging with high street footcare company Scholl, to create Seton Scholl Healthcare - "a major new UK healthcare group", which will have annual sales of around £300 million ($498 million). The terms of the merger value Scholl at around £343 million.
Seton will have the majority shareholding of 53.1% in the new company, with Scholl holding the remainder. Scholl's chairman, Stuart Wallis, will be chairman of the new company and Seton's Iain Cater will be chief executive. The companies expect that Seton Scholl Healthcare will qualify for the London Stock Exchange FTSE 250 Index.
In the past year, Seton has made seven acquisitions for a total of more than £45 million. The acquisitions include DePuy's UK incontinence care division, now called ThackrayCare, Seton's largest purchase to date, which it bought last June for £22 million,.
The new deal is expected to result in "considerable strategic, commercial and financial synergies", which should lead to substantial cost savings and improvements in sales in the short and medium term, the companies claim.
Seton and Scholl both have healthcare and consumer brands. Seton produces incontinence care and woundcare products, as well as over-the-counter (OTC) consumer products. Scholl produces compression hosiery in addition to footcare and footwear.
The new company will have four main business areas - footcare, OTC products, wound management and incontinence care. Around three-quarters of its turnover will derive from Scholl's footcare and Seton's OTC products.
Seton has also released its figures for the year ended February 1998. A revised sales policy led to static sales growth, excluding the acquisitions. Profitability, however, was up as increased efficiency, lower levels of working capital and improved profit margins began to take effect.
The UK company's revised strategy is aimed at spreading sales more evenly over the financial year and reducing wholesaler stock levels. The company says that demand for its products from end-users continues to be strong. It expects to complete the transition to the new strategy by the end of the year.
When the sales of the acquired companies are included, Seton's turnover increased by 14% to £117.6 million. Operating profit rose 25% to £28.8 million, while pre-tax profit was £24 million, compared with £19.8 million the previous year.
Oldham-based Seton recently acquired EMS Medical Group's urology business for £3.5 million. The business involves mainly the manufacture and distribution of catheters.