25 May 2012

MDY soars on asset disposal

26/10/2011 Miles Nolan

Shares in healthcare investor MDY Healthcare (MDY) have almost quadrupled this morning, on news of a significant asset sale.

US listed healthcare giant C.R. Bard has acquired therapeutic temperature specialist Medivance for $250 million, which will yield a payment to MDY's 10.4 per cent stake of between £12.5 million and £13.125 million. The return is pretty impressive, given MDY only invested a total of $6 million in the company over the last few years. It also comes just a month since C.R. Bard acquired AIM listed cathether to stent manufacturer Clearstream for £43.8 million.

Completion of the sale is expected to take place in the final quarter of 2011, which will then allow MDY to repay its current debts of £1.65 million. This will leave the AIM counter with plenty of cash and one investment - Stanmore. Founded in 1949, this is an orthopaedic business focused on saving and restoring the function of limbs and joints. A UCL spin-out, it is on track to deliver sales of £7.5 million this year.

Further information with regard to the likely use of the proceeds will be made in due course. However, even after the rise MDY is valued at just £7.6 million. The reaction to the news today comes as little surprise, indeed at 44.5p, the shares probably have much further to go.

Tags: AIM market, Asset sale, C. R. Bard, Stanmore

Sector: Financial Services

Companies: MDY Healthcare

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