Pharmaceuticals distributor Montero, one of the top ten players in its industry has budgeted its 2010 business at a level four times higher than the 100m euros estimated for this year, because of new acquisitions on the distribution segment.

"We will not be able to cope on the pharmaceuticals market if we remain at the same scale. An organic growth is extremely costly and this is why capital transactions (mergers and acquisitions) are one of the few strategies likely to succeed in the long term. We are currently in talks with two companies (i.e. for strategic alliances)," explained Flavius Hadadea, general manager of Montero, quoted by zf.ro.

He did not care to reveal the names of the companies Montero was considering for acquisitions.

The move would not be Montero's first transaction on the distribution segment. The company recently announced the takeover of Tamisa Trading from businessman Anthony Trevor Gibbs. However, the deal with Tamisa was more complicated because the actual payment was conditioned to the attainment of certain performance indicators in the coming year, which includes both turnover and receivables. Montero SA ended 2006 with a turnover worth 55 million euros, whilst Tamisa Trading posted revenues worth 25 million euros. Both companies are seeking to attain a consolidated turnover of 100 million euros in 2007.

Montero is also considering expanding outside Romania in the near future, in particular in Serbia and the Republic of Moldova.

"We have started a series of surveys with a view to expanding our business in the region- in Serbia and Moldova, and are presently involved in the process of assessing the possibilities of expanding in these two countries," said Flavius Hadadea

In addition, the company is considering acquiring mature businesses, as well as starting a business from scratch. "We will implement a business model that works in Romania onto another market in the region, which will be specially tailored to that country. We will use the results obtained from this expansion, such as in negotiations for the acquisition of larger volumes from suppliers and better commercial terms," said Flavius Hadadea.

As a result, Montero joins two other domestic players that announced plans to expand their businesses in the region, A&D Pharma and Relad.

As far as other Montero group investments are concerned, Hadadea explained that they would entail developing logistics centres throughout the country, which are larger than the already existing ones. Montero also has an ongoing investment in Chitila.

"In Chitila we have a 92,000-square metre investment, of which 40,000 square metres are allocated to facilities. The work is in progress and the first facility will be completed by the end of September, when Montero will move there," Flavius Hadadea added.

To fund these projects, Montero is in talks to take out a syndicated loan worth "tens of millions of euros". Montero officials did not care to reveal the banks they were in negotiations with. Montero accounts for 5% of the pharmaceutical distribution market.