Polska Grupa Farmaceutyczna (PGF), Poland’s number one drug distributor, has become the first company in the sector to separate its wholesale and retail-pharmacy businesses with the creation of Central European Pharmaceutical Distribution (CEPD), a holding company based in the Netherlands. The new company, incorporated in Amsterdam for tax reasons, will concentrate PGF’s pharmacy businesses and will coordinate the company’s foreign expansion in Central and Eastern Europe (CEE).

As a first step, CEPD will take control over DOZ, PGF’s Polish pharmacy chain, and will subsequently integrate Limedika and Gintarine Vaistine, its Lithuanian businesses acquired last year, as well as PGF’s UK business. But PGF has very ambitious expansion plans and sees the creation of CEPD as the most efficient vehicle to conduct its planned M&A drive in the CEE region. The company is eyeing 17 regional markets. Apart from the immediately neighbouring countries or the Baltics, it is also considering targets in countries such as Albania, Bosnia and Herzegovina, Serbia and Croatia. According to Jacek Szwajcowski, CEO, talks with several potential targets are already underway.

PGF, which at the moment owns 100% of shares in CEPD, plans to allow outside investors into CEPD while retaining 51% of its shares. In a few weeks’ time it will launch a capital increase in which it will offer CEPD shares to financial investors as well as to independent pharmacies. It does not rule out a stock market listing for CEPD in the future.