LONDON — UK holding group Huntsworth has agreed to sell to US private equity firm Clayton, Dubilier & Rice (CD&R) for around £400m, it was announced today.

The deal comes four years after Hunstworth began its turnaround under CEO Paul Taaffe. Results announced today reveal that the group's communications division — which includes Grayling, Citigate and Red — has finally returned to growth for the first time in a decade, up 3.3% in 2019 to £73.6m.

Of note, CD&R is known for its healthcare assets. Huntsworth's healthcare portfolio accounts for the majority of its £265m in 2019 revenue, and was up 4.6% in aggregate across its marketing, medical and immersive arms.

The PE firm pointed to this division as the key attraction for the acquisition, noting that "Huntsworth primarily targets the medical communications and healthcare marketing services markets in the US and Europe and provides services to a large and diverse portfolio of clients consisting primarily of pharmaceutical and biotechnology companies," and that it believes that "Huntsworth's underlying markets are attractive and underpinned by long term, stable pharma-related trends."

The deal values Huntsworth shares at a 50% premium to the stock's Monday closing price — or at £400m for the current issue share capital, and £524m in enterprise value.

"Huntsworth has transformed over the past few years into a growing and dynamic healthcare and communications group," said Huntsworth chairman David Lowden. "Our strategic focus has always been on investing to develop a full service, digitally driven offering to support our customers.

"Whilst we believe that Huntsworth is strongly positioned as an independent listed company, the all-cash offer from CD&R represents a compelling opportunity for shareholders to realise an attractive cash value in respect of their shares. In addition, the board believes CD&R will be an excellent partner for Huntsworth, its employees and customers."

The return to like-for-like revenue growth in the communications division reflects “the benefits of our strategy to streamline and rationalise operations,” according to the company’s results statement for the year to 31 December today.

As well as a lift in revenues, operating profit improved by 38% to £8.3 million, from £6 million in 2018.

Lowden said: “I'm delighted with the return to growth at our communications division, Constellation Communications, after many hard years of restructuring and re-focusing. The division is comprised of many smaller agencies across the globe all of whom have contributed to the turnaround, although some standout performances were seen in Citigate Dewe Rogerson in Asia and Grayling in the UK and Brussels, all of which achieved double-digit revenue growth.”

Overall group revenue for 2019 was £264.9 million, an increase of 18% on 2018, or 4% on like-for-like basis, with a 4% increase in like-for-like operating profit.

CEO Paul Taaffe added: "Huntsworth had yet another record year led by growth in our Medical and Immersive divisions and a return to growth in Communications. Organic revenue growth accelerated over the course of the year and the acquisitions of Kyne in Marketing and Creativ-Ceutical in Medical both contributed to 2019 performance and further enhanced our capability to attract larger and higher-margin client engagements. We have entered 2020 well positioned for another year of growth with strong momentum at the start of the financial year and an increased new business pipeline."

Huntsworth was founded by Lord Chadlington in 1990, before he retired in 2014.