Release Date: 2008/08/11
New Clicks has acquired a 60% stake in leading courier pharmacy business, Direct Medicines, for a cash payment of R13.2 million.
David Kneale, group chief executive of New Clicks, said the acquisition will enable Clicks to broaden its coverage in the retail pharmacy market and accelerate its national pharmacy presence.
The transaction is expected to be effective from 1 September 2008 and is subject to regulatory approvals. New Clicks has the option to acquire the remaining 40% of the business after three years.
“Subsequent to regulatory approval the business will be rebranded as Clicks Direct Medicines and will complement the Clicks in-store pharmacy network. Courier pharmacy customers will now also have the option to collect chronic medication at Clicks pharmacy stores across the country. All medication for Clicks Direct Medicines will in future be procured through UPD, the wholesale pharmaceutical distributor in the New Clicks stable,” said Kneale.
“Courier pharmacy is a growth market in South Africa, with an estimated 10% of all chronic medication being dispensed through courier pharmacies last year. We believe courier pharmacy is cost effective and supports Government’s objective of making medicine more affordable and accessible to all South Africans,” said Kneale.
Direct Medicines was established in Johannesburg in 1994 as part of Afrox Healthcare (later Life Healthcare). Following a management buyout from Life Healthcare in 2005 the business has been independently owned and managed.
Post the New Clicks acquisition, the remaining shares in Direct Medicines will be held by empowerment group Vuwa Healthcare (26%) and management (14%).
Direct Medicines has an annual turnover of R225 million and dispenses over
650 000 prescriptions annually across South Africa, Lesotho and Swaziland. Direct Medicines has relationships with over 100 medical schemes.
Ends
Issued by Tier 1 Investor Relations on behalf of the Clicks Group
For further information kindly contact
Graeme Lillie, Tier 1 Investor Relations 021 702 3102 / 082 468 1507