Cordiant in £113m health acquisition
Cordiant Communications Group (CCG), parent company of Bates Worldwide, Scholz & Friends and 50 per cent owner of Zenith Media Worldwide, has acquired US healthcare marketing company, Healthworld Corporation, in a share deal worth £113m.
CCG intends to use Healthworld Corporation – which specialises in direct-to-consumer advertising campaigns for prescription drugs – to build a global healthcare marketing network in the 70 countries it operates in.
Advertising and marketing in the healthcare sector is increasing, particularly in the US following the relaxation of the Food & Drug Administration rules in 1997. Agencies are positioning themselves for similar deregulation in Europe.
CCG operates healthcare marketing agencies in the US, UK, Italy and Australia under the Healthcom brand. Bates UK has a healthcare arm called Health@Bates which handles Roche and Warner-Lambert.
The group’s existing healthcare operations will be aligned under Healthworld in a new division of Bates Worldwide. The Healthworld management will continue to run the business.
Michael Bungey, chief executive of CCG, says: “We already work for some of the world’s leading healthcare companies through Bates Worldwide. Joining up with the Healthworld team gives us an outstanding opportunity to become the leading global healthcare marketing business.”
Healthworld Corporation made pre-tax profits of $7.4m (£4.6) in 1998, up from $4.9m (£2.8m) the year before, on revenues of $63.7m (£39.8m).
CCG is offering 6.602 shares for each Healthworld Corporation share in a tax-free exchange, valuing the company at £113m. The deal should be completed in the first quarter of next year, subject to shareholder approval.
