Hi, I made notes at the Alliance Pharma (LON:APH) presentation and thought they may be of use to some holders who didn't attend:
Peter Butterfield CEO 1st presentation seen. Thought he came across relatively well. Was a presentation of the basics of the company rather than going into great depth.
• Noted 3 equity raises since 2010. Clear implication that there would be more raises if deals came along.
• Sinclair transaction brought in Kelo Cote and a Pan European office network and whilst there were doubts from the market at the time of the size, it has worked out well. Should we be concerned that another big deal could be a risk as a result of possible over-confidence post Sinclair?
• Nizoral transaction funded by £30m equity raise £30m debt raise. They would have liked greater geography but Stada beat them to Europe and a Private Equity won another geography. Later touched upon the power of the product is in the brand. There are equivalent poducts, but this has very strong brand recognition since it launched in early 1970s. Is a heritage brand and as half yr sales of £11m, it is obvious it will quickly become an Intl star brand for them. He touched about the frequency of people questioning to why Johnson & Johnson would sell. Simply because it will never be a billion dollar brand for them. The transaction was good not just for the Nizoral deal but it also opens the possibility of more deals with JnJ.
• Process for looking at acquisition targets is a 10 year DCF model. Won't even look at a co. unless 3 years sales. So not buying hope brands.
• Local brands are called local brands as they generally wouldn't travel well to other countries. Gave an eg of specific product unique to the UK as a result of NHS providing help for skincare. The skill in this business is in regulatory and supply chain management. Not sure what the regulatory part is if have longstanding approval?
• International star brands - target seemed to 50% sales, which given Nizoral and Xonvea possibility seems reasonable.
• Vamousse was talked about along with other star brands. Noteworthy, as have worldwide rights and very much saw it as a way into USA. However, cognisant…
Thanks for posting this, unfortunately it seems to raise more questions than answers!
