RCA is a 15-year old medical device business which distributes and services a range of capital equipment and related surgical consumables, specializing in critical care. They hold key agencies for medical equipment catering to the intensive care unit, neonatal intensive care unit and the operating theatre. The company employs over 100 workers and have achieved a compound annual revenue growth of roughly 18 percent over the last five years.
The business is well positioned to expand into sub-Saharan markets with activities already in Botswana, Namibia, Mozambique, Zimbabwe and Malawi, according to a news release from Ascendis. RCA Founder/CEO Sean Reitz will remain in a top management position, though his exact title is not yet clear.
“We are extremely 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," Group CEO Dr. Karsten Wellner said. "RCA 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 planning to take advantage of new private hospital builds and expanding requirements in the public sector. It also has been identified as a complementary distributor to the existing medical device division, which will enhance Ascendis’ ability to service hospitals, clinics and government tenders within a growing market.
The acquisition is subject to the regulatory consent of the South African Competition Authorities.
“RCA is a strong cash generative business in a market sector with a high barrier to entry offering products with aligned specialist services. We envisage immediate positive benefits through the integration with Surgical Innovations 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," Wellner said. "RCA is an important milestone for the Pharma Med division and for Ascendis in general as it adds, alongside our strong organic growth, approximately 18 percent to our published earnings per share for the six-month period ended Dec. 31, 2013.”