Hi, everybody, and most welcome to this short presentation. We are very proud today at AddLife because we have today announced a fantastic acquisition of Healthcare 21, and we would love you to hear a few words about this acquisition that we have done today. We can change slide. I just wanted to show you, this is me, Kristina Willgård, who is presenting together with Tara Kearney, our CEO at Healthcare 21. You are somewhere in this call, Tara.
Yeah.
You will come in the presentation and tell everybody a little bit more about Healthcare 21, which I think is good, and you can ask questions directly to Tara.
Great.
Okay, so this week is for us a quite different week. It's not normally that we at AddLife do two large acquisitions within a week. Actually, in the autumn, 1st of October, I think we did four acquisitions in one day, but they were rather small compared to what we have done during these three, four days. We have, I see a lot of people coming in. We have had the opportunity to find fantastic companies which we think have great strategic fit with AddLife, and the fit is very different for the two acquisitions. Last week we press released the acquisition of Vision Ophthalmology Group, and that was really an expansion into a new niche, which is ophthalmic surgery. That's a niche within MedTech where we haven't been before, but we have seen that as a very interesting niche with good growth opportunities in a lot of markets.
Today we are extremely proud to present the geographic expansion into Ireland and U.K. with Healthcare 21. Both these two companies will, of course, strengthen the platform for the whole of AddLife, give us a good opportunity for further growth, both organic but also through further acquisitions. It has also a good opportunity to increase the networking between the new companies. We have, as you know, some 30% in AddLife is own branded products, and of course we will try to sell them into the new geographies where we are. Of course we also would like to see the opportunities to use the common suppliers and share them within new countries as well. It's a lot of opportunities, but these two acquisitions are not counted from any synergy angles.
It's just a good strategic fit, and if we find any good synergies on the sales side, of course that is really rewarding from these two. From an AddLife perspective, this really also gives a big step from being a Nordic player to a full European player. And what I think is very great with both these acquisitions is that we keep the strong local management in both acquisitions, and they are really important for us to set this platform for the further growth. And we think the match with both these local management has been fantastic over the two acquisitions that we have done. You can change play. Just a few words about Healthcare 21, and then Tara will come later into more details. As I said, it's a strategic expansion into Ireland and the U.K.
We have been looking at especially U.K. for a number of years because the U.K. and Irish market is a very sizable market, as you see, close to EUR 14 billion of size in MedTech. And we all know that there's a lot of good opportunities in these markets, so we have been actively looking there. But of course the Brexit has also made it a bit hesitation from our side to see when to approach this market, but now we got the opportunity with Healthcare 21. The company reported last year EUR 171 million in net sales. I think Tara will come back because the pro forma net sales are actually a little bit lower due to two different reasons. As I said, excellent strategic fit. Healthcare 21 has activities both in our MedTech and in our LabTech segment, but mostly it's MedTech oriented.
The company has a very strong customer and supplier base, really long-term agreements. More than 95% of all agreements on the supplier side are exclusive, which is fantastic that you know really from year-over-year what sales you will achieve on a big part of the business. We have very common ideas about adding value. We are both AddLife and Healthcare 21 talking about added values, not a box mover, but really give further values to our customers and also, of course, to our suppliers why they use us as a distributor in the system, and we have excellent strategic fit when it comes to the corporate culture.
I mentioned the strong and experienced management, and Tara, please later you can introduce yourself, but you actually been, I'm not sure if it was number one or number two who was hired into this company, but at least you and your team have been with the company for a number of years. We can change slide. As I said, this step with HC21 gives us a big change in AddLife. On the left side you see the net sales that we reported in 2020. Sales outside of the Nordic market was then 35%. If we now summarize this more illustrative, you see that now 55% of our sales are out of the Nordic market. So this is really a transformation from a Nordic player to a European player.
Of course the European market is bigger, gives us opportunities, and the platform for further growth has really increased a lot due to these two larger acquisitions. Change please. Tara, can you please jump in now?
Great, I will. Thank you, Kristina. Tara Kearney, CEO of the Healthcare 21 Group. It gives me great pleasure to be here with Kristina on this call today because the future prospects for Healthcare 21 under the AddLife umbrella, it's just a great day for our business. I have a couple of slides which I hope will give you an overview of who we are and how we operate our business. As Kristina said, we're a specialist outsource sales, marketing, and solutions provider to the healthcare industry across the U.K. and Ireland. Now I suppose I'll probably simplify that a little bit in terms of using this slide to actually explain probably a little more and in greater detail what we do. We were founded in 2003, and as Kristina said, I was a number one employee within this business.
I've been with the business, I suppose, building it from the ground up, starting from zero sales to where we are today. I've had multiple roles with it within our company, and I have 23 years experience in the healthcare industry. I've definitely, for sure, in terms of background in various roles. We're headquartered in Cork in Ireland, and as Kristina mentioned, we're a number one provider to healthcare institutions across Ireland and U.K. When you actually look at, I suppose, the distribution market, we are number one in terms of that player and that provider. Kristina mentioned in terms of our net sales. What I have here is a pro forma sale of EUR 153 million and an EBIT number of EUR 21 million. Our COVID impact in our business last year, we actually ended up with a positive result.
If I look at COVID, I don't think any business probably got through the last year unscathed, but because of the mix of products which I will speak to in this slide, because we have such a broad mix, everything from the home care setting across to the hospital theaters and out into laboratory and industry, we have a very, very broad mix. So for us, COVID has positives and negatives. And what we also did was we exited out of what we classify as just a pure distribution box moving business, which was high on the revenue line, which really wasn't contributing very much on the EBIT line. So looking at our staff numbers, we have 450 employees, and why that's important to me, and I know you've probably heard from various presentations, Kristina, from Kristina in the past, is our people are key to our success.
So we share that value and that ethos with AddLife, and that was obviously one of the key, I suppose, drivers in terms of this, I suppose, this acquisition today. And that, I suppose, culture of engagement, transparency, and ownership, and we have a really, really, as Kristina mentioned, long-term experienced team. We have great tenure in our management team, and that's all across the business, whether that's in procurement and operations or whether it's in our business managers on the ground, because we work a specialized model out towards our customers, and I speak to that with the therapeutic areas. Looking at the split of our business across Ireland and U.K., we're looking at 60% in Ireland, 40% in the U.K., which may seem unusual when you look at the size of the markets because there's obviously a large difference.
Ireland will be our home country because that's where we're founded. We set up our U.K. business in 2012. Even without, I suppose, I know we talk about some synergies across product ranges over the next few slides, but even without that, the U.K. for us has huge market potential in terms of size and scale, and that's always a driver within our business. We have 104 leading healthcare supplier partners, and they're key to us because Kristina mentioned the long-term partnership agreements that we have with them, which is quite unusual and quite rare in our industry. If I look at even the tenure of the suppliers within our business, most of our key suppliers are with us over 10 years, and we operate long-term agreements with them from three to five years.
The reason in terms of we operate a very proven successful model, we're very open, very transparent with our supplier partners, so therefore we get that trust and engagement back. Looking at our customer base, we have 3,500 customers across the group, and our customers are everywhere, I kind of mentioned already. We obviously service the public, private, and when I look at, so acute and non-acute, which is what we classify as primary care or community care type businesses, and we provide product and/or services into every single healthcare institution in Ireland and U.K.. What I suppose is more important than that, though, is we are listed on all of the relevant framework and contract agreements within the product areas that we serve.
What that also does, we spoke about longevity in our supplier relationships. What that does is also gives you certainty of supply into the customer as well when you're on customer contracts of anything from a two to four to even we've one agreement within our business, which is a 10-year agreement with the customer. That's the type of business area that we service. We've over 30,000 product lines, and the product areas that we're in is predominantly what we classify as medical devices. We're usually in the kind of mid to the higher market, and we're not really in terms of a, once we operate a single-use device, we're not really at a consumable type area. If I look at what we classify as therapeutic areas, what that is, is probably within our business, we refer to those really as our divisional structures.
So, if I look at the U.K., our divisional structures are very small: cardiovascular, endoscopy, digital imaging, and what we look for in the therapeutic areas is to be number one or number two player in that market. And the reason then our supplier partners will be number one or number two product brands in each of the areas that we service. And I mentioned already our history is, I suppose, longer within Ireland, so therefore we have a larger number of therapeutic areas in Ireland as well. And where we have been really successful as a business and how we have grown our business is the growth within our business is first and foremost we look at organic growth, but we also look at onboarding new products, entering into new market segments as well. So it's something we're really good at and been really successful in.
The other key area within our business is technical services. We have EUR 25 million in revenue in technical services. So we have over 108 installation and/or technical services engineers within our business. So we service every type of equipment from the bed, the hoist, the mattress in somebody's home to theater equipment to endoscopy and a large range of products in between. But what we are is we're not a size-fits-all provider of service. We specialize in what we do. I suppose, and especially for, I suppose, looking at the call that we're on today and obviously you as all the investors in AddLife, which now obviously is in Healthcare 21 as well, we have consistent revenue in each growth, which is obviously key and core to any business success. And that's delivered by a decentralized scalable model. So again, that's where we see a fit with AddLife.
Within our business, we have standalone infrastructure within Ireland, North and South, and then in the U.K. also. And then what we have within that is we have group functions. So if I look at finance, HR, quality, procurement, those type of functions, and what they do is ensure consistency of standard. So even, as I said, there's always areas for growth within our business. So if you look at, I suppose, our compound growth over the last three years, we have attained, just if I just look at our organic revenue, we've attained over-market organic growth. The organic growth within our business is traditionally anywhere between 4%- 5%- 6%, and we're achieving minimum 7% year on year. So we're above the industry norm in our organic business, and obviously in terms of the EBIT as well.
But what we're also really good at, which I haven't mentioned, is acquiring companies. We've acquired a number of businesses ourselves over the last couple of years. And what we do is we look for, and as Kristina you mentioned there, is it a strategic fit or is it a synergistic fit? And we've looked at both models, and we've had acquisitions of types as well. But because of the nature of our business and the way we look at our business as our platform for growth and the way that we have our business structured is we're also scalable. So we can onboard new products, we can onboard new market segments, can onboard new suppliers, we can onboard new companies and make that work within our business. And therefore we don't just, you can see the EBIT that we've acquired that we've achieved out of the acquired companies.
So we're really, really good at that synergistic fit and obviously looking and making sure we're acquiring the right businesses to give us and allow us, I suppose, that. The one other area in terms of our growth and the one thing in our business as well is technology and the use of technology and how that can obviously help support us into the future, but also how we can look at that synergies, those costs, how we can expand and grow and develop our business at the top line level, but not at the cost level. And last year we implemented computer-assisted technology whereby now in our finance department, all of our invoices and all of our supplier things are now automatic. So again, the saving there, the efficiency there, and what we can do then in terms of the scalability of our business.
Another area for us was paperless engineering. So our engineers are all on tablets, they're no longer on paper. And we received, in the year that we actually implemented that, we did a 35% increase in productivity in that year alone. So again, it's something that we look at and implementing in any of the acquisitions going forward as well. And then, as I said, our growth historically has come from organic, obviously, onboarding new product from existing suppliers, onboarding new product from new suppliers, and then onboarding acquisitions as well. So we have a, probably, as we call it, like a three-pronged approach towards when we look at growth and achieving growth in our market. Do you want to go on to the next slide?
I know K ristina, obviously from the AddLife perspective in terms of the strategic fit between our businesses, but I'm probably looking at this from a slightly different perspective because I'm looking at two of the best-in-class healthcare organizations and now, as Kristina said, no more with the European footprint rather than a Nordic footprint. For us to be part of that European organization that's fully aligned with cultures and values, that's a long-term owner for our business, which is really big from our perspective in terms of we've grown a really, really strong, healthy, sustainable business over the years. We were looking for an acquisition partner in AddLife that would continue that into the future and strengthen, and obviously in terms of this decentralized scalable business model that's there, it fits with ours as well.
And I do see significant opportunities, and they're probably only high-level discussions, Kristina, that we've had yet, but for AddLife's own branded product. We have a new market with new market territories in Ireland and U.K., and they may even be new some new market segments for us, but that's what we're good at. We're really good at onboarding new products and new suppliers. So I think there's huge opportunities there. Like Kristina, we were just talking just as we were coming on the call, there's a new opportunity literally in the market as of today to bring in the own branded AddLife products into the U.K. So it's significant. So that's how live this is and how real this is for us in this business.
And I definitely think we've obviously had a lot of supplier communications with this acquisition, and it really offers as well in terms of that opportunity for existing suppliers, both on the Healthcare 21 side of the business and also the AddLife side because you're now giving them new territories as well and access to new territories, which sometimes is really, really, really difficult to find a good provider that's going to support your product in the right ethical way. And now in terms of that pan-European footprint, because there is no one European distribution provider today, especially when you're looking at new entrants, new entrants, especially if I'm looking at any American providers looking for a solution across Europe, for me, this is just, this is something that we in our business have been looking for the last number of years.
So for us, I suppose it's a continuation of what we're doing, but today is a great start within our business for sure. And look, I'm not sure if you've probably gathered my excitement and my enthusiasm from today, but it is. This is a new start, a new chapter in our journey with AddLife. And I'm incredibly proud of what we've achieved as a business, and it's a we, it's not a me in terms of our team, and they're all fully committed. Kristina, I know I've met with our management team this morning, and everybody's excited as we are. So it's a great day to be part of the Healthcare 21 Group. And do you know what? It is business as usual.
As I said, we need to get out there, we need to deliver the promise, we need to deliver the numbers that we've put down in terms of our business modeling and our business plans, and as I kind of say, and probably now you're saying it's probably onwards and upwards from here.
Thank you, Tara. Well, it's great to hear that you promised to deliver. We like that. Okay, let's go further on. It will probably be questions in the end, so just a few words about the transaction. We closed today here around noon, as you saw, because of the press release. The purchase price was EUR 240 million, 74% in cash, and 26% was newly issued Class B shares, around four million shares, and that became a dilution of 3.5%.
It's an opportunity to get an additional cash consideration 2024, depending on the profits that are made in 2022 and 2023. The EBITDA multiple in this case is around 14, and as we all know, normally we have multiples around 7, 8, but again, normal acquisition for AddLife is companies with sales of SEK 100 million, SEK 150 million. And this is a company much, much larger, and we get a much larger step into a new geography, so for us, we think it was a good multiple, and we got a good opportunity to get into the U.K. and Ireland. Next slide, please. So we have just done some illustrative financials in this case. We will, in the Q1 report on April 2021, give you more information on the pro forma accounts.
So far, you can see that if you see actual 2020, AddLife as such did some SEK 5.3 billion in sales and a margin of 15.2%. If we summarize the acquisition of both VOG and Healthcare 21, you get to some SEK 7.7 billion in sales. It's a 46% growth. And the EBITDA ends up around SEK 1.1 billion. That's a 40% growth. So these two acquisitions really put in much more power into the AddLife group. And therefore also, we think it's very important to have these calls so you can get some more questions since we are doing the acquisitions right now. With that, I suggest that we open up for questions. Please, if somebody has anything to ask us.
Jon Hyltner here. Can you hear me?
Yes, Jon. Hello.
So super interesting, of course. And I wonder if you could, if you describe Tara's business in terms of, I heard it was a lot of framework agreements. How does it work in the U.K. and Ireland compared to the Swedish procurement handling? If you could elaborate a bit, please.
The public procurement. Yeah, Tara, you can discuss a little bit about it.
Yeah, I'm happy to take that one. It's actually slightly different in both markets. So I start with the U.K. The way the U.K. market works typically is they issue out to market what they classify as a framework agreement. What they do is those agreements are usually anywhere between a two- to four-year agreement. They're hardly ever in shorter periods than that. What they do is in the U.K., then they qualify you as a supplier. So therefore, they qualify the product. So obviously, there's certain criteria you need to meet to get on a framework, but it's getting really, really, really harder now to actually get on the frameworks with all the level of regulation and quality guidance that actually you now need to support actually a tender.
As well as that, you need financial backing as well in terms of size and scale of a business. That being one. Once you qualify a tender, what they do is they rank the product, so your product then is ranked number one or two or three, depending what you can do with any if I take a larger framework, say like a wound care framework, you could have even anything up to 50 lots on that. Never going to have every single product on every single framework. But what you do is for us, it's having the critical portfolio that we want listed. Then hence I mentioned like at the moment around 189 framework agreements in the U.K. and Ireland for all of the relevant products that we're in.
Because especially in the U.K., if you're not listed on the framework agreement, you cannot access the market. Again, it acts as a barrier to entry. Again, any new entrant looking to come into a particular space, if they're not on the framework agreement, they can't supply. Sometimes we would get inquiries through that and new products into our portfolio as a result of that because suppliers can't actually get access to the market themselves. That's the way the U.K. works. If I look at, and Northern Ireland is somewhat similar, but Northern Ireland probably takes more of a shape of Southern Ireland. What happens there is again, it's like a typical framework agreement anywhere again from two to four years, sometimes up to five. What they will do in that instance is they will qualify the supplier as a first phase.
Then what happens is there's usually a next step. That next step is what we classify then as a tender or a contract or a tender agreement. Those tender agreements can be at a local level or a national level, depending on the type of product. And I'd probably qualify that like gloves would be at a national level because it's a fairly generic product. If I look at a surgical instrument, that might be at a local level because it's more specialized with clinical preference. So then what they do is they would award onto that contract and tender, and therefore then you're the provider, you're the sole supplier on that product tender. But we do have some frameworks like the U.K. that are ranked for some of our products. So it's probably, I don't mean to confuse the message, but it's not as simple.
We operate both models in Ireland. It's predominantly a framework model in the U.K., but the main message here is that it is critical to be on these frameworks because it's really, really difficult to access the market if you're not.
Okay. Is it, if I've understood it correctly for the Swedish market, sometimes a lot of tactics that you price certain products in a framework agreement pretty low to get in on other volume products that you might price higher? Maybe it doesn't work this way anymore. You can correct me if I'm wrong, Kristina. But what's the dynamic where you operate? Is there a lot of tactics in that sense? And is it really tricky? Do you need some public procurement skill to be successful?
Yeah, actually that's a very good question because the way that we operate our business, as I said, we work with a divisional structure. We work with specialization. So we're never going to be the lowest product provider in terms of price because we're at that mid to higher end product range and portfolio. As I said, we're the number one or number two product provider into each of the areas that we're in. So it's a bit of skill with both because what you need to do, especially when you're looking at a specialized, say, medical device and/or equipment or instrument, then what you need to do, you need to do a lot of background work with the clinicians. So you need to get to market well before the tender is ever even issued or published.
You need to ensure, obviously, that they're aware of the product, they're familiar. Any trialing even potentially sometimes may even occur even pre-tender. So then when it comes to a tender situation, then they're very aware of the product, its features and benefits, what can it do. And then you have to be, I suppose, the right price point for what in terms of what that product will gain in market. So we'll never be the cheapest. But so yes, but what we would have within our business then is we would have very, very good relationships with, I suppose, what we classify as the procurement or category managers in the different areas. So obviously, you need to work with them so they're familiar as well of what the features and benefits are in the market of various products and product types as well.
So and then we have our clinical sales teams on the ground in terms of the specialization because for us, it's not, I think, as we mentioned with Kristina, it's about adding value. It's not just about selling product. Anybody can move a box. Anybody can sell a product. So it's the pre-before and then it's the support afterwards. And that's where largely we have a lot of clinical nurse educators and staff. We have a huge technical service engineering team, which I mentioned. We have very specialized in-house customer service personnel to manage some of, I suppose, the procurement of some of the products and managing that customer service that supply chain through because it's not a one-size-fits-all model for a wheelchair for somebody in the community to a microscope that's in the laboratory. So the service levels are different for all.
So Jon, if I should conclude somewhat, it's quite similar to the way we do in the Nordics. It's a lot of similarities because we are not box movers. We are adding value. So we really have to be tactical. We really have to make sure that the customer prefers us. And we are not very seldom we sell on price. We sell on added value. And that's the same with Healthcare 21. But of course, the systems are a little bit different, but in general, very similar, I would say.
Okay, good. And then the final one on the organic growth profile, you mentioned that you stepped away from some low-margin business. So if you look at the focus areas you're still in, what type of growth have you had? And looking forward, what type of organic growth is reasonable to assume? And what's happening in the market? Is it a big backlog in the whole system? So probably organic growth should be higher, or are the finances so strained now that it will be tougher to get the same type of growth?
Yep. Great question. I suppose, first of all, the business that we exited, that was something that we inherited through an acquisition, and that was really box moving, low margin. I'm talking 4% margin, 10% margin. You really, in terms of it didn't add value to the business, and there was a working capital cost to it as well, so it didn't add value. If you look at the organic growth in market, what we are still seeing right now in Ireland and the U.K. is we are still seeing a bit of a COVID impact right now in 2021, but we did budget in for that, and when I say that, the throughput within the hospital system in the U.K. and Ireland has slowed when we look at what we classify as your elective surgery type patient.
So when I spoke about endoscopy, cardiovascular, surgical, all of those are theater-based products. And then some of our other products will be based on throughput, like monitoring and thermometry and wound care. They're all based then on throughput through the system as well. So obviously, that really hasn't picked back up yet. There isn't as much strain in this health service as there were probably previously in the last few months. But what we are seeing, what we will see towards what we're seeing really in the second half of this year is that we'll start to pick up in terms of what we classify as the typical business. What we're also hearing, in terms of our hearing as well, is that because the waitlists have now, there was always waitlists.
I'm sure it's probably the same in Sweden in terms of the health service, as those waitlists have doubled and tripled over the period of time that we've now lived through in the last 12 months. That's time to continue. It's not sustainable. Thank you again.
So we'll see as an investment in the next growth.[crosstalk]
Yeah.
And market support as well in terms of that growth that's there in the industry and what we're seeing. And there will be, like at the moment, as I said, the organic growth within our industry is anywhere between four and five. We are still seeing that, and we're above that norm right now. So we do see that growth. But when I say that, because we have such a mix of products in our portfolio, the growth in some products could be 20%. The growth in others might be four if I'm looking at a really just stable business that we're just managing through its life cycle. And then if I look at our technical services, that's a really high revenue, high margin business. And so that's another area for us to focus as well. And if I just conclude that one.
Thank you.
Sorry, Jon. If I conclude, I mean, what we see is really that Healthcare 21 has more or less the same average organic growth as AddLife has had for many, many years, around 7%, which I think is very healthy in a market if the growth is. Well, I would say AddLife before this was the market growth 3%-5%. And now when we're stepping into the U.K., perhaps the market growth is somewhat higher. So we are still above average market growth, which I think is really amazing. And same in the rest of AddLife. The elective surgery will have to step up during the summer or after the summer. So I think we see positive when we see more elective surgery, hopefully in the books as well. But right now, they are, of course, not according to budgets.
All right. Very clear. Thank you. That's all for me.
Thank you, Jon. Okay, everybody. I think we have had a 35-minute sort of short update. If you have questions, don't hesitate to call me or mail me or something, and we will try to give as much information as possible, and within a few weeks, of course, we will have our Q1 report, and there you can read much more and get more information about the financials from both these acquisitions, actually, but we are very proud and excited to summarize this call, to have the opportunity to grow in U.K. and Ireland, and to grow to be a really European player together with Tara and her team in Cork, so thank you, everybody, and wish you all a good day. Bye-bye.
Thanks, Kristina. Bye-bye.