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AmerisourceBergen eyes M&A as takeover war chest grows

By Nick Taylor+

01-Aug-2011

AmerisourceBergen is looking to buy pharmaceutical packaging and distribution assets using some of the $2bn (€1.4bn) it has accumulated.

Strong sales have helped AmerisourceBergen grow its cash reserves by 20 per cent over the past year and the company now plans to spend some of its money. Pharma distribution and packaging services companies are being targeted, and AmerisourceBergen is willing to spend big on the right business.

While we historically have been very comfortable in the $200m to $300m range, we will consider something larger if it made good strategic sense”, said Steven Collis, CEO of AmerisourceBergen, in a conference call with investors.

Distributors of speciality products, such as plasma-derivatives, and providers of consulting services are also being pursued. Although AmerisourceBergen is looking at companies across a range sectors, all takeover target will have common characteristics.

Our criteria for acquisitions are as follows: they should increase our value offering to existing customers, both up and down the channel; they should be within our established core competency; and they should increase shareholder value”, said Collis.

If AmerisourceBergen is unable to find a company that meets these criteria it will consider returning money to shareholders, either through increased share repurchases or dividends.

Q2 results

Collis discussed acquisitions in a conference call following release of AmerisourceBergen’s second quarter results. Operating income was up more than 10 per cent as AmerisourceBergen benefited from strong sales of oxaliplatin, gemcitabine, and docetaxel at its speciality generics unit.

However, AmerisourceBergen has sold the last of its oxaliplatin inventory and, with Sanofi striking a deal to extend exclusivity, will be unavailable until August 2012. Collis also expects docetaxel and gemcitabine sales to “moderate” as more suppliers enter the market and reimbursement declines.

After spiking at the start of trading, shares in AmerisourceBergen slipped to close down slightly following release of its second quarter results.

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