STOCKHOLM: Swedish medical technology and life sciences investor MedCap AB on Friday reported a 32% rise in its third-quarter adjusted core earnings, driven by robust organic growth and contributions from recent acquisitions.
The company, which buys and develops small- and medium-sized life science companies, said adjusted earnings before interest, taxes and amortisation (EBITA) rose to 91.1 million Swedish crowns ($8.4 million) from 69.1 million a year earlier.
Group net sales for the quarter jumped 21% to 501.5 million crowns, with organic growth accounting for 9% of the increase.
“Overall, the Group delivered a very strong third quarter with good net sales growth and a 32-percent increase in adjusted EBITA,” Chief Executive Anders Dahlberg said in the report.
The performance was bolstered by its Assistive Tech business, which saw sales surge 32%, and the July acquisition of Danish firm XGX Pharma, which helped lift the Specialty Pharma division’s sales by 10%.
For the first nine months of the year, adjusted EBITA increased 14% to 272.8 million crowns on a 14% rise in net sales to 1.52 billion.
MedCap, which listed on Nasdaq Stockholm’s Mid Cap segment, has been actively expanding through acquisitions. It completed the purchase of Danish company Danrehab in February, XGX Pharma in July, and Dutch firm LivAssured on Oct. 1.
The acquisition strategy has impacted the company’s balance sheet. Net debt, including lease liabilities under IFRS 16, stood at 356.5 million crowns at the end of September, compared to 75.0 million a year earlier, largely due to a contingent consideration liability for the XGX Pharma acquisition.
Despite the higher debt, the company’s cash and cash equivalents were healthy at 358.7 million crowns.
Looking ahead, CEO Dahlberg expressed confidence, stating that the prospects for finding interesting acquisition opportunities were still good and that the company aimed to increase the use of its “strong balance sheet to create long-term shareholder value.”
($1 = 10.8012 Swedish crowns)