Investment memorandum

Company: FM
Industry: Wholesale and retail distribution of pharmaceutical and par pharmaceutical products

Investment merits

– Growth market potential. Market has a serious potential growth form both perspectives in depth and in breath:
– It growth approximately 20% per each year reaching in 2009 to about USD 150 million;
– It has a serious potential in consumption of drugs per capita lacking on this indicator seriously even behind its neighbors

– Very diversified client portfolio. FM’s client portfolio is diversified so that the largest clients has no more than 2% of its total share in total revenue;

– Year by year increasing of revenue. In 2009 and increasing of revenue of 31% as compared to 2008, in spite of the financial difficult situation;

– Consolidation phase. Currently, Market follows the consolidation phase of the retail pharmacies and now is the perfect time to take this opportunity.

Company profile

The Company started its business with the distribution of the pharmaceutical products in, as well as homologation of products and promotion of products over the country.
– In 2003, it started to distribute the cosmetic products in the mass market.
– In 2005 it built its own office and warehouse conformed with the national state requirements for the pharmaceutical products.
– In 2007 it started the development of its own pharmacy net. Currently it has a network of 17 pharmacies and few more are in the process of opening. Total leased area for pharmacies is about 2100 m2 with the average price per m2 being $12.
– In 2009 it got the license for the customs warehouse for the pharmaceutical products for non GMP products according to the new rules approved by the Government.

FM has a share of about 5% of the total market of pharmaceutical products in. Currently the company

has a staff of 95 persons, out of which:
Management – 6; Pharmacy net – 60; others – 30
Business model

FM is a distributor of pharmaceutical, par pharmaceutical and cosmetic products. It purchase producers mainly from Ukraine, Russia, Serbia, South Eastern Asian countries and distribute them in via its own retail channel as well as to other pharmacies, hospitals, supermarkets.


Until 2007, FM mostly concentrated on the wholesale business, selling its products mainly to the pharmacies on the market.

In spite of the difficult situation on the market due to the financial crisis, FM increased its revenue in 2009 to about $6 million. It is worth mentioning that by the end of 2009, the exchange rate of currency (lei) against dollar seriously devaluated by about 10%. Otherwise the revenue for 2009 would be even higher by 10% in dollar currency.

Since 2002 FM every year has been increasing its revenue. The main drivers of the revenue is the establishment of its own retail channels starting with 2007, diversification of the customer portfolio, participation in the state tenders.

The product portfolio is rather diversified so that no one of the group of products has a dominant share. This is a very important factor because selling to retailers, own and foreign it is important to have a very large portfolio of product pipeline.

FM sells to about 70% of pharmacies all over, 100% of hospitals, 100% of distribution companies as well as all biggest supermarkets – Metro, Green Hiils, etc.

Fig: The breakdown of sales as per sales channels is as follows:
2006 2007 2008 2009

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