The competition authorities have approved without reservation New Clicks' R281-million acquisition for New United Pharmaceutical Distributors (UPD), the wholesale distributor of pharmaceutical and front-shop products. The acquisition takes effect from 1 January 2003.
Trevor Honneysett, New Clicks group leader, says this development is a cornerstone in the group's forward healthcare strategy. 'Our objective is to improve efficiencies and margin in retail pharmacy and ultimately to assist in providing affordable and accessible healthcare to all South Africans. Efficient procurement and distribution is key to our strategy and by bringing UPD on board, we go a long way to achieving this.'
'UPD distribute product to some 5 200 pharmacies, doctors and hospitals in southern Africa. We add to our distribution capability the specialised area of pharmaceuticals distribution, where factors such as expiry dates, cold storage, twice-daily deliveries, security and product handling are paramount.'
Independent pharmacists stand to benefit from the deal. According to Kevin Vyvyan-Day, CEO of UPD, 'Pharmacists play a vital role in bringing healthcare to consumers, yet they face enormous pressure on their margins. We intend together with New Clicks to equip independent retail pharmacists to meet the challenges and threats that are changing the healthcare environment.'
Honneysett says the acquisition also provides a tangible opportunity to add value to the Link franchise. New Clicks has a 56% interest in the Link Investment Trust, which owns the Link and LinkMax brands through which 324 pharmacies are operated. UPD already supplies most Link pharmacies, representing about R500 million of UPD turnover.
UPD reported turnover of R2-billion and net profit after tax of R43-million for the year to 30 April 2002. The R281-million acquisition will be funded through the issue of 39 024 000 New Clicks shares. It is expected to be earnings-enhancing for the group.
In terms of the deal, UPD is acquired 100% by Clicks Pharmaceutical Wholesaler (Pty) Ltd, the licensed pharmaceutical wholesaler within the Clicks group. UPD management have also been contracted. Honneysett says: 'We are tremendously excited about strategic and advisory input the UPD management will make to our healthcare business. These are people who have played a leading role in the supply side of healthcare and run a very successful business.'
Publisher: Cape Business News
Source: Cape Business News
The competition authorities have approved without reservation New Clicks' R281-million acquisition for New United Pharmaceutical Distributors (UPD), the wholesale distributor of pharmaceutical and front-shop products. The acquisition takes effect from 1 January 2003.
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