Pegasus on growth, integration and sale to UDG

AshfieldIn April, the Brighton-based healthcare specialist was acquired by FTSE 250-listed healthcare outsourcer UDG Healthcare, becoming part of UDG’s Ashfield Healthcare Communications arm and ending Pegasus’ 24-year existence as an independent firm. Looking at the stats, one can see the attraction. The acquisition followed a period of impressive growth at Pegasus: revenue rose from £5.8m to £8.9m between 2013 and 2015. The sale price was £16.8m, with a £10.1m initial payment followed by £6.7m deferred over a three-year earn-out. Hackett declined to discuss more financial details. But Keith Hunt, managing partner at corporate finance agency Results International, estimates that it probably represents a multiple of around five times EBIT (earnings before interest and tax), rising to between six and nine times earnings during the earn-out phase. It is a fairly typical price, based on the age­ncy achieving net margins of around 20 per cent.

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