The recession may be on its way out but there are still few sources of financing available and thus there is the kind of opportunities that a recession provides. This is probably the approach guiding the Fuhrer family, who think that the time is right to expand overseas.
The Fuhrer family owns Israeli drug distributor NeoPharm Medical Supplies Ltd., which because it is stable and cash-rich despite the recession, can afford to consider global conquests in a recessionary world.
For its first overseas acquisition, the Fuhrer family have chosen UK pharmaceutical company Goldshield Group plc (LSE: GSD:L). By Israeli standards the proposed $330 million purchase is huge. NeoPharm's previous acquisition was of Israeli company Promedico for several dozen million dollars.
It is very rare indeed to see an Israeli company proposing a purchase this large, and even when an Israeli biomed firm is acquired by an international giant the amount is not this big.
NeoPharm has annual revenue of about $300 million and its cash situation is good, although this purchase will still be an enormous financing challenge for the company. It is reasonable to assume that it will implement leveraging with only between $100-150 million coming from the pockets of the Fuhrer family.
From the strategic point of view, this is a deal which shows great imagination for the expansion of NeoPharm's activities. Goldshield Group's main business is the distribution and marketing of pharmaceutical products. The fact that it owns some of these products is in contrast to NeoPharm, which prefers to outsource production to manufacturers in Israel, will enable the Fuhrer family to expand their capabilities as well as their geographical scope of activities.
Published by Globes [online], Israel business news - www.globes-online.com - on September 15, 2009
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