Rumors having been circulating the past few months regarding if private equity company Apax will sell its medical courier company, Marken, or inject additional funding into it. It looks like Apax has until the end of this month to decide.
Apax started discussions with Marken's lenders in January as the company breached its December loan covenants due to a deterioration in performance. Problems escalated in February following an independent business review from Deloitte. By March, the business was breaching its covenants again. Lenders have given Apax an emergency extension that expires at the end of this month.
In 2001, Marken had sales of approximately $200m. However, the company's capital structure and historic over-reliance on a small group of pharmaceutical companies has hampered its ability to operate and invest.
Still, somehow, the company appears to be in an expansion mode. This year alone it has opened offices in South Korea and 3 offices in India - Pune, Hyderabad and Bangalore. Earlier this month it also acquired the European kit building operations from LabCorp Clinical Trials.
With offices around the world including Brazil, Argentina, Singapore, Japan, South Africa, Canada, US and China it would make an interesting acquisition for a company looking to expand further into the pharmaceutical/clinical trials logistics market - particularly within the emerging markets.
The pharmaceutical logistics market is consolidating - AmeriSourceBergen acquired World Courier earlier this year, Kerry Logistics acquired Taiwan pharmaceutical logistics company, Trustspeed Medicine Logistics and UPS acquired Italian pharmaceutical logistics company Pieffe Group.
For those companies looking to enter this market, there are numerous specialized pharmaceutical logistics companies to pick from including Celesio's Movianto division. Earlier in March, Bloomberg had stated that DHL was in discussions with Celesio for the division however, according to Celesio, it is currently in talks with several potential suitors.
Niche pharmaceutical logistics companies will find it increasingly difficult to compete against larger logistics companies. Although these niche players are very knowledgeable on the pharmaceutical market and needs, the larger logistics companies have the benefit of providing additional services and locations that many of the smaller niche players do not offer. Also, transportation costs may be lower for larger logistics providers.
