Dis-chem is having a busy financial year that includes;
4 acquisitions,
launch of a delivery service and
the sale of Dis-chem shares by the founders (7.50% via an accelerated bookbuild, 3.75% to management and 10.05% to a BEE consortium).
1) Sep 2021, Competition Tribunal approved Dis-Chem’s acquisition of 100% of the issued share capital in and shareholder claims of Pure Pharmacy, trading as Medicare Health (50 pharmacies) from existing shareholders.
Dis-Chem will pay a final purchase consideration of R250m.
Many of the stores in the Medicare portfolio are in convenience centres, in geographies where Dis-Chem is currently under-represented which gives the Group access to new markets.
Year ended 28 Feb 2021, Medicare generated revenue of R1.1 billion, with dispensary contributing 67%
2) end of 2020, Dis-Chem acquired Baby City in a transaction valued at ~R430 million.
Dis-Chem aims to open clinics to provide antenatal care to pregnant moms in the Baby City stores.
Baby City operates a network of 33 stores across SA.
3) Dis-Chem entered into agreements with the shareholders of Kaelo Holdings to acquire 25% of the equity of Kaelo for a purchase consideration of R195 million,
subject to company performance hurdles in each of the FY21 and FY22 periods.
Kaelo gives Dis-chem an entrance into the health insurance sector.
Kaelo's portfolio of health assets includes; benefit-rich gap and primary health insurance products,
occupational health clinics, and is the owner of the AskNelson
psychological wellbeing platform.
Kaelo has delivered impressive and consistent annual performance, with CAGR product revenue growth of 30% over the last 3-years.
These acquisitions seem to be timed amd align to the Dis-Chem Group’s overall strategy.
4) On 1 Mar 2021, Dis-Chem acquired 87.5% of Healthforce for R48m.
Healthforce offers clinic management software that, amongst other system capabilities, sets up clinic nurses as the low-cost entry point into the healthcare system.
The technology includes a telemedicine capability, which provides real-time video connections between patients and nurses with an on-demand remote
doctor network.
Healthforce is implemented in close to 440 clinic rooms, mainly in pharmacies, across South Africa.
5) July 2021, Dis-chem launched an on demand 60 minute delivery service called DeliverD that has a flat rate of R60 for deliveries.
6) Ivan and his wife Lynette (founders of Dis-chem), through their investment vehicle, Ivlyn Local Investment (Ivlyn) recently sold a big chunk of their stake in Dis-Chem.
Pick n Pay announced that Clicks plans to acquire the retail pharmacy business of Pick n' Pay, including 25 in-store pharmacies which will be rebranded to Clicks.
Imagine if Dis-Chem "hijacks" the deal. 🤣🤣 (it might not pass the Competition test).
Afrimat has shown that acquisitions, when done right, can drastically change the fortunes of a company.
In the same breathe, African Bank also showed us that acquisitions, when done incorrectly, can lead to the demise of a company.
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