United Drug makes second EU packaging purchase
purchase as the Irish services firm continues to pursue expansion
across the continent.
For €15.4m United has agreed to acquire Pharma Logistics Investments (PLI), based in Heerenveen in Northern Holland. Under the deal United has also agreed to pay an additional €5.5m based on achievement of agreed targets over the next three years. PLI provides its packaging services primarily for generic pharmaceuticals and healthcare products throughout Europe and currently employs 125 people, all of whom will remain with the business. United Drug's Chief Executive, Liam FitzGerald said he plans to invest further in the new business to "facilitate its future growth". "PLI complements our existing packaging businesses, Budelpack in Belgium and TD Packaging in the UK and expands our geographic reach in contract packaging", he said. Indeed, although United's core business is that of a pharmaceutical wholesaler, FitzGerald has been forthcoming with his plans to move the company into new areas on the international stage through a strategy of both organic and acquisitive growth. In April this year the firm made its first foray beyond Ireland and the UK into mainland Europe, with the purchase of Budelpack, and the company's latest acquisition of another packaging firm in Europe comes as no surprise. At United's annual general meeting at the end of February, FitzGerald said that he would specifically be targeting take-over opportunities with contract packaging firms and medical and scientific companies and indicated that the firm would have around €150m to throw at such deals over the coming year. Sparking the company's metamorphic plans is the fact that over the past decade European pharmaceutical wholesalers have been facing tough times. Margins continue to be squeezed as a result of government efforts to reduce the increasing financial burdens of drugs on public health care expenditures and as a result, the industry has experienced considerable consolidation in order to remain economically viable. "The current model of purely relying on re-sale price earnings on pharmaceuticals is no longer sustainable, however, the industry as a whole is not evolving," FitzGerald told Outsourcing-Pharma.com at last year's annual general meeting of the European Association of Pharmaceutical Wholesalers (GIRP) in Budapest. "Pharmaceutical wholesalers in Europe need to evolve to meet the changing pharma market and a world of opportunity awaits for those willing to think beyond their traditional business model and move to compete in the outsourcing arena."
