In interesting news on UK stocks, safety equipment manufacturing company Halma plc (GB:HLMA) is buying Rovers Medical Devices for €91 million to strengthen its cancer screening portfolio. Halma will pay an upfront cash consideration of €85 million, with the remaining €6 million to be given subject to meeting performance targets by March 31, 2025.
FTSE 100-listed Halma is a safety equipment company offering process safety, infrastructure safety, medical, and environmental solutions and analysis. Meanwhile, Rovers is a relatively smaller company that designs and manufactures sample collection devices used for preventing and diagnosing cervical cancer.
Further Details of the Deal
One of Rovers’ important products is the cervical cancer screening device Cervex-Brush. Rovers delivered revenue of €12 million in Fiscal 2023. Furthermore, Rovers generated a return on sales of more than double that of Halma’s targeted range of between 18% to 22%. Rovers sells its products mainly to medical diagnostic companies. Halma will host Rovers as an independent unit within its Healthcare business, with existing management intact.
Halma is hoping that Rovers’ leading cancer screening devices will strengthen its position in the cancer diagnostics market. Also, Rovers’ future growth is anticipated to be driven by the accelerated global cervical cancer screening rates, which is also in line with the WHO’s (World Health Organization) mission to detect cervical cancer in its early stages.
Is Halma a Good Stock to Buy?
Today, Jefferies analyst David Farrell reiterated a Sell rating on HLMA shares with a price target of 1,950p (14.8% downside potential).
With one Hold and one Sell rating, HLMA stock has a Moderate Sell consensus rating on TipRanks. The Halma plc share price target of 2,225p implies 2.9% downside potential from current levels.
