3i exclusive for SSL unit

3i has reportedly beaten off competition from Morgan Stanley Capital Partners and Apax Partners in the bidding to acquire SSL’s medical division in a deal worth up to £275m.

SSL International, the UK-listed healthcare group, is reported to have entered into exclusive negotiations over the sale of its medical division, with 3i expected to pay up to £275m for the business.

The UK-listed private equity firm has beaten off competition from Morgan Stanley Capital Partners and Apax Partners, according to UK newspaper The Times. The three firms were asked to table final offers for the unit earlier this month.

 

Today, a spokesperson for SSL declined to comment on the identity of the bidder, but confirmed that “extensive due diligence” had been carried out. An announcement on the sale is expected at the end of the year.

 

At the beginning of 2003, SSL said it was planning to focus on its consumer businesses, which account for around 55 per cent of the group’s operations. Investment bank NM Rothschild is coordinating the sale of the medical division, which includes such brands as Regent surgical gloves and Hibi antiseptics and has annual sales in excess of £200m.

 

In a statement yesterday, the company confirmed that it had received “substantial levels of interest” in the business.

 

As part of its disposal strategy, the firm announced the sale last month of its Marigold industrial rubber gloves business to French group Comasec for up to £22m. SSL announced a 10 per cent drop in pre-tax profits for the six months to 30 September to £9.5m. Sales were up by three per cent to £317.7m, on a strong performance by Durex.

 

SSL International, which was formed by the merger of London International Group and Seton Scholl in 1999, has faced a number of difficult episodes since the 1999 merger, including accountancy scandals and allegations of trade-loading. SSL has admitted that for the 1999 and 2000 financial years its sales were overstated by £22m and profits before tax and exceptionals by £19m.

 

The overstatement of results was discovered during the internal investigation into trade loading – the practice of offering big discounts to key customers at the end of the financial year to increase sales bookings for the year after from these customers.