Seton poised for pounds 40m expansion in Europe

Seton Healthcare, the medical products group, is planning its first acquisition outside Britain in a deal that could be worth up to pounds 40m, say industry sources.

The company, which sells non-prescription brands like Woodward's gripe water and hi-tech wound healing gels, is believed to have shortlisted five private healthcare companies in northern Europe as potential bid targets. Seton was apparently close to striking a deal with a German company recently, but was unsatisfied with the quality of the deal. Among Seton's target markets are Belgium, Holland, Germany and Scandinavia. Analysts say the company has banking facilities to fund a deal of around pounds 40m without issuing paper.

Seton is believed to be looking to buy a medical products rather than over-the-counter drugs company, with strong, complementary brands in Seton's core areas of wound care, compression treatment and incontinence care. Seton exports around 18 per cent of its sales, using third-party distributors, but is known to be keen to sell directly into Europe to capitalise on the fast-growing hospital products market.

Seton is the UK's second-largest wound care group behind Smith & Nephew, but is a relatively small player outside the UK.

Analysts said that acquiring a business in Europe would give Seton the infrastructure to build a significant non-UK business. "Seton has the critical mass to benefit from a move outside the UK. Selling directly rather than through distributors would give Seton controls over marketing and prices," one analyst said.

People & Business, page 24

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