quick look at M&A from a NPH perspective.. First of all IMO you should not buy or hold a stock on buy out speculation alone …fundamentals are the most important. However recent rumours I heard today, at another Canadian med marketer , which is supposedly meeting Knight on something, suggest a look is warranted here. I see four categories of potential buyers for NPH as follows…
#1 -Canadian Medical marketer (Valient, Knight, Merus etc):
I have predicted a consolidation will occur in this space which IMO makes this the biggest chance for buy out moves…The other 8 CDN med marketers, do not really understand the generics space well though (unlike NPH management) , as they are not traditional pharmacists, so they may watch closely to see revenues build… but they are watching NPH as it progresses now and likely see the value of the very unique and large generic niche NPH operates in…. While I am not hoping for a buyer , especially this early, I can see how NPH could really be an asset to a larger company marketing branded products in Canada…The question would be which of the branded players sees how the generics platform, that NPH is building, can be leveraged to their benefit , and add value to, their current and future branded product business…..
#2-financial companies (Private Equity, Onyx etc):
There are hundreds of financial companies that look for chances to take over under valued companies with the intent of using them as a base for add on acquisitions or turn arounds..With the collapse of the energy market as a home for Canadian investment ..this scenario is more likely than usual IMO..
-#3-big generic pharma (Actavis, Teva, Apotex):
Big pharma may make a bid, but IMO it would be more to stem their loss of sales than to add products… Also eliminating competition should raise prices they can charge… IMO big pharma will come knocking when NPH lands some strategic specialty generics… and on the other hand the Canadian traditional generic market is a market they will want to protect…Lastly here smaller US generic marketers like Akorn, UNI or Lannett could see a need to get direct sales exposure into Canada through an acquisition..
#4-pharmacy chain (London, Shoppers, etc):
There are many opportunities here also as the Canadian Pharmacy space is very fragmented; IMO its hard to predict where interest might come from in this sector….