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Bunzl acquires four firms and sells healthcare arm

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Goods supplier Bunzl has gifted investors an early christmas present, raising its full-year profit guidance as it continues to weather macroeconomic headwinds and the fading Covid-era boom in PPE sales.
Goods supplier Bunzl has gifted investors an early christmas present, raising its full-year profit guidance as it continues to weather macroeconomic headwinds and the fading Covid-era boom in PPE sales.

Bunzl has acquired four businesses and has agreed to sell its UK healthcare division.

The specialist distribution group, which sells global businesses a variety of products from coffee cups to cafes, food wrap to supermarkets, and cleaning materials to hospitals, said the transactions would be profit neutral.

The FTSE-100 firm said it would sell its UK healthcare arm – which generated £216m in revenue in 2021 – to Dutch healthcare giant Mediq.

Bunzl said it acquired Toomac Ophthalmic & Solutions, a distributor of ophthalmology products in New Zealand, in November.

It also agreed to acquire GRC, an exclusive distributor of innovative medical technology devices in Australia, in October.

The two deals see Bunzl snag firms that specialise in surgical products, as it looks to broaden its healthcare business offering in New Zealand and Australia.

Bunzl also acquired VM Footwear, a Czech Republic-based company that distributes PPE and own brand footwear.

The fourth firm was PM Pack, distributor of packaging products in Denmark, with a particular focus on food processor customers.

The Bunzl deals reflected the firm’s focus on “optimal capital allocation across the group,” Frank van Zanten, chief executive officer of Bunzl, said.

He added: “The announced acquisitions are highly complementary, expand our product offering in each country, and all achieve double digit margins, with their profits offsetting the expected profit contribution from the announced disposal.”

The announcement comes ahead of Bunzl’s full-year trading update on Wednesday, when the company is expected to impress investors.

Analysts have anticipated that the company will have done well despite cost inflation and supply chain disruption.

Bunzl is expected to post a 20 per cent year-on-year increase in pre-tax profits to £689m for the year, according to investment platform AJ Bell.

The group’s sales between July and September rose by more than 18 per cent year-on-year, it shared in October. It also said then that strong revenue growth was expected for the full year.