MCBRIDE PLC 22 September 1999 McBride plc EXPANSION INTO THE U.K. OVER THE COUNTER PHARMACEUTICAL MARKET McBride plc ('McBride'), the leading European supplier of retailer brand household and personal care products announced today an offer to purchase the 80% of the equity of Wrafton Laboratories Limited ('Wrafton'). Wrafton is the leading independent European over-the-counter ('OTC') pharmaceutical contract manufacturer, supplying multi-national branded goods companies and is a fast growing major supplier of retailer brand OTC pharmaceuticals to UK retailers. The offer which values the whole of the equity at £21.6 million is structured to provide McBride with 80% of the equity share capital with the three founder directors retaining 20%. McBride has received irrevocable undertakings to accept the offer from Wrafton shareholders owning in excess of 90% of the equity share capital to be acquired (excluding the 20% being retained by the founder directors). McBride will be in a position to acquire any outstanding minorities. The consideration comprises an initial payment of £17.3 million for 80% the share capital of Wrafton payable in cash on completion. An additional payment for the remaining 20% of the shares will be made at a future date and based on the profit performance of the company. The three full time directors Mr Brian Sherwin, Mr Mike Forfitt, and Mr Doug Birghall, will remain with the business and have signed new employment contracts and will own the 20% of the equity not being acquired. A strategic review by McBride of the opportunities for expansion of its product range identified OTC medicines as an important and growing market sector. The purchase of Wrafton is McBride's first strategic move outside its existing household and personal care sectors and will provide a base from which to build its business in the OTC medicines market. The acquisition of Wrafton will increase the Group's sales in UK by 10% and provides a platform for future growth in this dynamic sector. The UK OTC market was estimated to be worth around £1.6 billion at RSP in 1998 and grew by 6.9% versus 1997. The UK is one of Europe's largest OTC markets and the combination of higher NHS prescription charges, the increased propensity of consumers to self-medicate and the growing awareness of the efficacy, safety and value of OTC pharmaceuticals will ensure continued growth. Wrafton operates in the three main sectors of the OTC market, namely oral analgesics, gastro-intestinal, and cold/flu remedies, all of which are experiencing solid growth. In addition, UK supermarkets have strategically grown their share of traditional chemist products as a source of growth. Part of their product offer is the development of retailer brand alternatives. Over the last two years UK grocers have raised their share of the OTC market from 28% to 34% and within these sales retailer brand has increased from 18% to 21%. The most recent audited accounts for Wrafton are for the year ended 30 April 1999. These accounts showed a profit before taxation of £1.75 million on turnover of £25.8 million. The net assets of Wrafton at 30 April 1999 were £3.3 million. The estimated net debt at acquisition is £2.5 million. Commenting on the acquisition, McBride's Chief Executive, Mike Handley, said: 'The purchase of Wrafton is an exciting opportunity for McBride and makes us the leading European independent supplier of contract and retail brand OTC pharmaceutical products. Wrafton's technical and manufacturing expertise will enable McBride to benefit from the expansion of this growth sector. We expect that Wrafton will be earnings enhancing in its first full year as part of McBride.' Contact: Mike Handley, Chief Executive 01494 607050 Terry Monks, Group Finance Director 01494 607050 McBride plc Andrew Dowler 0171 831 3113 Financial Dynamics


Mcbride (MCB)
UK 100

Latest directors dealings