Businessman Dragos Pop, who owns 50% in pharmaceuticals distributor ADM Farm, which posted a 60 million-euro business last year, has stated that he is considering both the possibility of selling a stake in the company and of merging with another distributor.
Over the past year, distributors in the pharmaceutical industry have started a race to raise capital from stake sales, loans and floatation on the Stock Exchange.
The most important transactions include the takeover of 60% in Farmexpert by the German ANZAG group, the sale by businessman Adrian Tarus of all Dita group shares to Gedeon Richter, as well as the merger of Montero and Tamisa Trading.
"The suppliers (drug distributors) are trying to adapt towards European payment terms. Some of them are shortening their terms even though the revenues on the market are lower. Then there are also investments required to apply the Good Distribution Practice norms (GDP, which will be enforced at the beginning of next year)," said Dragos Pop, who explained why distributors need to raise capital.
ADM's investment project this year entails spending 4 million euros in order to increase the number of drugstores owned by the company to 30. ADM will also spend 2 million euros to double the logistics capacity in Bucharest, an investment that will start this year and end next year. The company's logistic capacity now stands at approximately 5,000 square metres, with its biggest warehouse located in the capital.
The necessary funds for these investments will come from bank loans.
The businessman specified that he had received partnership offers from a number of investors but did not provide any further information on the matter. Dragos Pop's partner in the distribution and retail business is Alin Mihai Iosep, according to the latest data available.
In first half of this year, ADM Farm made 1.5 million euros in profit, six times higher against the same time in 2006. Turnover went up by 61% to 45 million euros, which allowed the company to revise its financial results upwards. Dragos Pop now forecasts ADM will derive turnover worth 100 million euros in 2007.
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