Sopharma Trading to acquire Serbian pharma distributor

Biggest pharma distributor in Bulgaria Sopharma Trading (SO5 BU) to acquire Serbian pharma distributor Lekovit, according to a filing by the former. The acquisition is subject to an antitrust approval.

Pharma stores acquisitions on the agenda

The deal is part of Sopharma Trading’s plans to expand in Serbia and gain market share. The Company began operations in Serbia in mid-2015 with an own product portfolio and is looking for ways to accelerate its market presence in the country as a way to diversify its operations.

Sopharma Trading is the biggest pharma distributor in Bulgaria – the biggest hospital provider and leading pharmacy distributor. The Company also provides full scope of healthcare services to pharmacies and hospitals – medicine, consumables, equipment, marketing and pre-distribution. Sopharma Trading is also pending regulatory approval for the acquisition of a pharmacy chain in Bulgaria – PharmaStore.

First 5 months of 2017 – 14% EBT rise

Sopharma Trading booked 8% y/y rise in sales and 14% y/y rise in EBT for Jan-May 2017, according to preliminary monthly data by the Company. The top line expanded 8.18% to BGN 270.7m while earnings before taxes added 14% to BGN 7m.

3.45% dividend yield from 2016 profits

Sopharma Trading (SO5 BU) shareholders approved BGN 0.30 gross dividend per share, according to the Company’s protocol from its regular shareholders meeting, held June 2nd, 2017. This yields 3.45% at current market quotes with an ex-dividend date on June 15th, 2017.

Debt financing for expansion approved in April

Earlier this year Sopharma Trading scheduled extraordinary general meeting to get debt financing approved – fueling expansion plans.

Shareholders approved new debt financing from various banks for a total of approx. BGN 54m to be used for acquisitions in Bulgaria and Serbia.

On 16 March 2017 Sopharma Trading announced that the company has reached an agreement and arrangement for the acquisition of Bulgarian PharmaStore pharmacies operations, with the intention of subsequently integrating them in the SOpharmacy store network.

Read more

Check ELANA Trading equity research reports