Ascendis Health acquires Respiratory Care Africa for R145 million

Dr Karsten Wellner

Group CEO Dr Karsten Wellner says, "We are excited about the integration of RCA into our group, as it falls neatly in line with our stated growth strategy of acquiring mature, well managed brands with excellent organic growth potential. It will strengthen our existing Pharma Med division, through complementary synergies with Surgical Innovations, our existing medical device business, allowing us to become a leading provider of medical devices throughout South Africa and also abroad."

RCA is a 15-year-old medical device business, which distributes and services a range of capital equipment and related surgical consumables, specialising in critical care. It holds key agencies for medical equipment catering to the intensive care unit, neonatal intensive care unit and the operating theatre. The company employs over 100 highly trained staff achieving compound annual revenue growth of circa 18% over the last five years. The business is also well positioned to expand into sub-Saharan markets with activities already in Botswana, Namibia, Mozambique, Zimbabwe and Malawi. Sean Reitz, the founder and CEO of RCA, has entered into an employment contract with Ascendis to continue driving the business forward.

RCA is well positioned to take advantage of planned new private hospital builds and expanding requirements in the public sector.

"RCA is a strong cash generative business in a market sector with a high barrier to entry, offering low volume, high value products with aligned specialist services. We envisage immediate positive benefits in the fields of procurement, servicing, sales and marketing, which could lead to other targeted acquisitions in this sector, as we push towards a further improved customer focus by providing turnkey client solutions. It is an important milestone for the Pharma Med division and for the company in general, as it adds, alongside our strong organic growth, approximately 18% to our published earnings per share for the 6-month period ended 31 December 2013 and thus contributes towards our continued success," he concludes.

For more information, go to www.ascendis.co.za.