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Medical supply company Uniphar is to acquire Ireland’s largest family pharmacy chain, Hickey’s, in the latest expansion of its business.
Uniphar, which traded in Dublin and London at a € 139 million float last July, made the announcement as it revealed that it had performed in line with expectations in the first six months of the year.
The acquisition will add 36 community pharmacies to Uniphar’s existing network, increasing its retail pharmacies to 335. Most of Hickey’s outlets are in Dublin, but it also has a presence in Cork, Meath, Louth, Kildare and Wexford.
Financial details have not been disclosed, but the value of the total transaction is estimated at € 60 million, with most of it being paid for in advance.
The transaction represents a great business for the Hickey family, who established the business in 1995.
Uniphar has been on the way to acquisitions since it floated with transactions including the purchase of EPS Group and M3 Medical for a total of € 40 million in November. It also bought Innerstrength Health earlier this year for € 8 million and last month closed a £ 24 million deal for Durbin, a specialty supplier of pharmaceuticals based in the US and UK.
“This looks like a practical arrangement that complements their existing business and is in line with the strategy outlined at the time of the IPO,” said Noel O’Halloran, chief investment officer at KBI Global Investors in Dublin.
In its results, Uniphar said that revenue increased 8.8 percent in the first half of 2020 to 871.3 million euros. Profit before tax was almost 9% higher than 16.4 million euros, and profit before interest, taxes, depreciation and amortization (Ebitda) increased 12.6% to 30.2 million euros.
“We have delivered a strong set of results for the first half of 2020 in a challenging operating environment, achieving gross profit growth across all of our divisions and 5% organic gross profit growth at the group level, while maintaining a strong liquidity and a net cash position at the end of the period, ”said CEO Ger Rabbette.
“Our investment in digital solutions, combined with the diversity in our product and service lines, has helped mitigate the impact of Covid-19 on our business and positions us well for the future.”
The group has previously said that it intended to double Ebitda within five years of its listing.
Warning
Uniphar reaffirmed its May warning that the coronavirus pandemic could cut 2020 earnings by 5 million euros. A few months prior to this, however, he saw a “significant increase in demand” for his business as the government and healthcare industry stepped up preparations for an increase in Covid cases.
The group reported a 55 percent increase in pre-tax earnings to 31.7 million euros last year, as revenue increased 17.4 percent to 1.66 billion euros.
The Hickey acquisition is expected to generate profits upon completion. The independent pharmacy chain is one of the largest in the Republic and opened its first store in Dublin’s Northside shopping center in 1995. It employs more than 350 people.
Hickey’s Pharmacy Limited, the part of the group that discloses financial performance, posted revenue of € 27.2 million for the 12 months to February 28, 2019 in its most recently published results, with an operating profit of € 2.4 million. of euros.
Two years ago, the group announced plans to double in size by 2022 with plans to have 60 points of sale across the country.
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