United Drug adds $102m to war chest

UNITED DRUG has boosted its war chest for future acquisitions by raising $102 million (€83m) in new borrowing.

The company, which is the biggest pharmaceutical wholesaler in the country, said yesterday it had successfully placed loan notes with a group of British and US insurance companies. The notes, which are unsecured, will be repayable between 2011 and 2016. Some of the new funding will be used to pay off existing loans taken out at higher rates.

Finance director Barry McGrane said the debt issue had introduced a new group of investors to United Drug and improved the company’s financial structure. The new package means United Drug’s debt will be spread out over a longer period and will make it easier for the company to service debt repayments.

The company has made good progress in managing its debt in recent years, reducing net debt to less than €50m at the end of March after selling its headquarters on Dublin’s Belgard Road to bring in €25m.

Davy analyst Jack Gorman said the new package significantly increased the company’s ability to make acquisitions and blended well with its track record of organic growth. The company saw pre-tax profits increase by 21% to €19.4m in the six months to March after turnover went up 15% to €618m.

The company has already set out plans to expand its non-wholesale divisions in Britain and mainland Europe.

Approximately 40% of sales come from the core wholesale pharmaceutical division, but its other businesses specialising in distribution outsourcing, sales outsourcing and medical equipment distribution continue to grow.