Pharmacybrands to buy Radius Pharmacy for $17m

NZ HERALD

Pharmacybrands, which manages the Unichem, Amcal, Life Pharmacy and Care Chemist stores, has agreed to buy Radius Pharmacy Ltd. for $17.1 million and take on $18 million of debt, adding interests in 34 chemist outlets to its network

Both groups have various franchise or co-ownership arrangements with the operators of their pharmacies.

Radius dwarves Pharmacybrands for revenue, at about $86 million to $16 million. The deal is subject to approval by Pharmacybrands' shareholders at a meeting in late March and completion of financing, the company said in a statement today.

Alan Wham, Pharmacybrands' chief executive, said his group faces competition "primarily from other channels and we must invest further in both the tools and developing the skills to compete effectively."

Pharmacybrands has expanded through acquisitions, having merged with Life Pharmacy Ltd. in 2009. Profit in the six months ended September 30 jumped to $2.1 million from $1.2 million a year earlier, reflecting the restructuring.

It had cash reserves of more than $11 million as at September 30, and net assets of $40.3 million.

In the past 12months the shares have almost doubled in value on the NZX and were last at 45 cents, giving it a market value of $45 million.

Radius Health Group, which also operates 19 medical centres, is the largest shareholder of Radius Pharmacy with a 76 per cent stake.