IMCD: Focus on pharma

// By Alex Roberts on 19 Nov 2019
IMCD: Focus on pharma

The latter half of 2019 has seen specialty chemical distributor IMCD develop a stronger pharmaceutical foothold in major markets through two acquisitions

As one of the leading distributors of speciality chemicals and food ingredients, IMCD has recently been making strides into the pharmaceutical distribution business, targeting acquisitions in Switzerland and South Korea. In the first instance it is to acquire Switzerland’s DCS Pharma in a two-stage transaction, buying 90 per cent of the company on fulfilment of transaction-related conditions and the remaining 10 per cent on 31 December 2021.

Founded in 2016 by the two Swiss pharmaceutical distributors Dolder and ChemSwiss, DCS Pharma currently operates in eight markets around the globe, including Spain, Italy, Germany, Mexico and China, providing a product portfolio of active pharmaceutical ingredients (APIs) for the pharmaceutical and nutraceutical industries. In 2018 DCS Pharma generated sales of around €62m and has a staff of 64.

“DCS is a significant acquisition for the development of our pharmaceutical business, not only in expanding our global footprint, but moreover in exploiting the clear pipeline, formulation and marketing synergies between APIs and excipients,” says John Robinson, IMCD business group director pharmaceuticals.

Beat Berger, CEO at DCS Pharma, agrees: “I am absolutely excited about the potential of coupling DCS Pharma’s leading position in APIs with IMCD’s geographic coverage, laboratory network and excellence in excipients. Our existing and future partners will be able to benefit from a significantly increased network within the pharmaceutical industry.”


IMCD has also agreed to acquire Whawon Pharm, planning to take an initial 57 per cent stake in the South Korean speciality chemicals and food ingredient distributor, with the remaining shares to be held by the management for up to five years. “We are delighted to expand our geographical footprint into South Korea,” comments Robinson. “Whawon are leaders in the supply of excipients and APIs, and their business perfectly complements our leading global pharmaceutical position. We are dedicated to expand into the other regulatory markets of personal care and food.”

“IMCD is an ideal partner for Whawon as they share a similar business culture and have a highly dedicated global pharmaceutical presence,” says Young-Hee Won, CEO of Whawon. “We look forward to utilising their technical capability to further develop growth for our customers and suppliers.”

Based in Seoul, Whawon’s distribution focuses on pharmaceutical formulation ingredients, and generated revenues of some €44m in 2018 with a staff of 54. Whawon was founded in 1998 and the experience that comes with the acquisition will be a strong addition to IMCD’s portfolio.

Finally, IMCD says it has finished integrating ET Horn into its US operations. Horn was acquired in August this year and has now completed the transition into one organisation with dedicated market focus. “Operating as one unified team, we provide our suppliers and customers with coast-to-coast coverage and expertise through our enhanced talent pool of market-driven experts,” says Marcus Jordan, president of IMCD Americas. “Having complementary values of entrepreneurship, transparency and expertise, IMCD is committed to building on Horn’s decades-long reputation of service excellence and expertise.”


IMCD’s third quarter results show progress but there have been setbacks along the way. As has been the case for businesses across the globe, IMCD has experienced continuing weak demand in EMEA markets causing lower-than-expected results.

Overall, gross profit grew 15 per cent to €457.3m (+14 per cent on a constant currency basis) while operating EBITA increased by 12 per cent to €175.7m (+11 per cent on a constant currency basis), due to  a combination of organic growth, the impact of the first-time inclusion of acquisitions completed in 2018 and 2019 and the initial application of the new IFRS 16 lease accounting standard.

Piet van der Slikke, CEO of IMCD, says: “The first nine months resulted in an EBITA growth of 12 per cent and a cash earnings per share growth of 15 per cent versus the same period of last year. Both the Americas and Asia-Pacific performed satisfactorily whereas EMEA’s results were disappointing (EBITA -2 per cent), caused by lower demand. Despite this, we are confident that we will continue to achieve our medium-term targets on organic growth and we are positive about the acquisitions we have completed so far and those we expect to complete this year.”

The final quarter for 2019 is set to be one of continued growth, according to IMCD, as the diversity of its markets will offset the decreased demand in the EMEA region.

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