Healthcare group United Drug has acquired privately-owned British medical sevices supplier, New Splint, for £7 million sterling (€11.4 million).

The purchase has been made entirely in cash, with the reserves coming from a United Drug share placing made earlier this year.

An additional £1 million, conditional upon the achievement of agreed profit targets, will be paid to New Splint's founders at the end of April 2003.

New Splint represents a further step for United Drug into the area of contract distribution outsourcing, an operational approach which sees a company contracting out its distribution function to another party.

The Hampshire-based company supplies and distributes medical devices, mainly orthopaedic implants, throughout the UK.

New Splint has exclusive distribution agreements in the UK with a number of international medical manufacturers.

United Drug's chief executive, Mr Liam FitzGerald, said yesterday that the New Splint deal was "strategically significant".

"What we've been saying for a long time is that we're focusing on developing our contract distribution outsourcing and our contract sales outsourcing," said Mr FitzGerald.

"One of those areas is in medical equipment. New Splint is a specialist in orthopaedic implants. It's a large step forward in a market that we're not heavily involved in."

United Drug is on the look-out for additional acquisitions, Mr FizGerald said, adding that "a number of discussions" were ongoing at this time.

These potential buys were also in contract distribution and contract sales outsourcing, he said.

While the UK was "the obvious next step" in this process, continental Europe also presented significant possibilities, Mr FitzGerald said.

He added that the company was particularly interested in developed healthcare markets such as Germany, France and Scandinavia.

"We've declared very openly that the company will continue to internationalise," said Mr FitzGerald. "We do have an active search process."