United Drug announces euro300 million war chest

Irish pharmaceutical and healthcare supply chain services supplier United Drug plc is in talks with several targets as it seeks to spend its war chest worth between €200 million [£135.8 million] and €300 million [£203.8 million].

“There are a number of arenas we are looking at,” United Drug’s acquisitions corporate development officer Liam Logue confirmed to M&A Deals. “At any time generally it is rare for us to be talking to less than half a dozen companies. There is a lot going on in the year. That is the case now.” Logue expected deals to be completed before the end of the year.

While Logue would not expand on the targets in negotiations with United Drug, he outlined the areas the company is looking at. The company plans to expand its pharmaceutical contract packaging and fulfilment business into continental Europe – it is already well established in the UK and Belgium – and adding ancillary services to its packaging division, such as contract manufacturing services. The company is also targeting growth in North America.

Typically, United Drug seeks niche companies with a deal value between €20 million to €100 million. “However, where there are more appropriate… opportunities we have no qualms with going bigger than that if we have to,” Logue said.

He believes there is ample opportunity for deal making in the market. “There is still a lot of fragmentation, a lot of private companies operating in the market, a lot of owner-managers and I think that is an opportunity for us as a consolidator within that,” he said.

Dublin-based United Drug’s acquisition hunt comes on the back of strong interims. For the six months ended March 31, 2007, the company posted pre-tax profits of some €29 million, up 16% year on year, while its turnover increased by 9% to €770 million.

In that six-month period, United Drug also acquired Pyramed, a UK-based distributor of medical devices, and the pharmaceutical packaging division of Belgian firm Budelpack International.

These acquisitions and results have been welcomed by the investor community, with United Drug’s share price climbing to €4.16 from €3.59 on November 30. This has pushed the company’s market cap to €941.6 million.

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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