Consort Medical goes to Sweden

Four years of solid share price growth from Consort Medical came to an abrupt end this time last year, when demand fell for the inhaler used with partner Mylan's generic version of the asthma drug Advair; an explosion at one of its plants earlier this year only made matters worse. Presumably the UK company now believes that a full recovery will be a long time coming: it has tolday agreed to a buyout from Recipharm pitched at £10.10 per share, a 39% premium to Friday’s close but substantially below where the stock was trading for most of 2018. The private Swedish pharmaceutical manufacturer’s offer values Consort at £505m ($646m) or £626m including its debt. Recipharm’s opportunistic move is driven by a desire to grow its sales to SEK8bn ($817m) by 2020: Consort is forecast to have revenues of $386m that year, according to EvaluateMedTech’s sellside consensus. The pharmaceutical services sector has seen much consolidation in the past few years, so it was perhaps inevitable that a weakened Consort would fall prey to a bid; still, shareholders who remember the heady days of 2018 might be disappointed. 

Consort's business
  Global sales ($m)  
Segment 2019 2020e  2022e  2024e  CAGR
Bespak - drug delivery devices 161 166 183 201 +5%
Aesica - pharma CMO 209 220 234 248 +3%
Total revenues 370 386 417 449 +4%
Source: EvaluateMedTech.

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