AmerisourceBergen to launch $100m distribution JV in Brazil

AmerisourceBergen to launch $100m distribution JV in Brazil

AmerisourceBergen (ABC) plans to buy a minority stake in a Brazilian drug wholesaler and outlined plans for a $100m distribution services joint-venture in the rapidly expanding market.

ABC said it will buy a 20% stake in Profarma Distribuidora de Productos Farmacêuticos SA (Profarma) in a deal expected to close by the end of June and added that together the firms will share ownership of a new drug distribution business.

CEO Steven Collis, said: “With its long-term macroeconomic growth outlook, favorable demographics, and increasing access to healthcare services and specialty pharmaceuticals, the Brazilian market affords us a tremendous opportunity to expand our international offerings.

Profarma’s success in the wholesale distribution, chain and independent retail, and specialty markets, combined with our expertise in specialty distribution and manufacturer services provides a compelling opportunity to shape the delivery of healthcare in Brazil.”

The investment fits with the strategy ABC outlined at the J P Morgan Healthcare conference in January, when it highlighted strengthening and expanding its pharmaceutical distribution business internationally as a key goal for fiscal 2014.

Brazilian expansion

Expanding in Brazil is also in keeping with ABC’s plan as ISI Group analyst Ross Muken pointed out in a note to investors.

He said the investment and JV “provides the company with exposure to a faster-growing end market with long-term favorable demographics and income that is still highly fragmented. The modest investment announced today could also position ABC for a larger presence in the future.”

ABCs distribution services brand World Courier will not help develop the JV according to spokesman Bill Mellander, who told Outsourcing-pharma.com that: "World Courier is not currently tied to AmerisourceBergen’s joint venture announcement in Brazil though they are a key component of the company’s global strategy."

The Brazilian drug distribution services sector looks set to become more competitive with several firms – including World Courier rivals DHL and Marken – indicating that they intend to boost operations in the country in the next few years.

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