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Ebos deal with Chemist Warehouse could boost revenue by A$1B in first year

Monday 2nd July 2018

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Ebos Group, the pharmaceutical and animal health products maker, says it's won a bid for a distribution deal with Australia's Chemist Warehouse which could bring in A$1 billion of revenue in the first year.

The two expect to sign a five-year supply agreement, starting July 2019, which could potentially be extended by three years, after Ebos won the tender to be the exclusive third-party distributor of pharmaceutical products to over 400 Chemist Warehouse and My Chemist stores in Australia. 

Ebos said it estimates that sales to the Chemist Warehouse Group stores will generate approximately A$1 billion in revenue in the first year of the agreement. In the six months to Dec. 31 2017, its profit was $76.7 million on revenue of $3.94 billion.

Ebos transformed itself in 2013 with the purchase of Australian pharmaceutical wholesaler and distributor Symbion, and has since bought New Zealand vitamin and herbal tea maker Red Seal, pharmaceuticals firm Zest, Australian pharmacy retailer Good Price Pharmacy Warehouse, the Black Hawk Premium Pet Care pet food business and merged its Australian Chemmart pharmacy chain with rival Terry White Group.

In May last year it bought Australia’s largest provider of outsourced pharmacy services to hospitals, HPS, for A$154 million and acquired a 14.1 percent shareholding in MedAdvisor Ltd, Australia’s leading digital medication management company, last October.

“It’s a great endorsement of Ebos’s wholesale pharmacy business, and reflects the high level of expertise and service standards that we offer the industry more broadly," said chief executive John Cullity. "Continuing to grow our healthcare business remains a high priority for the group and partnering with Chemist Warehouse Group will be a natural progression of that. We are confident that Ebos will generate an acceptable return on capital from this new business."

The company's shares rose 3.9 percent to $18.65, and have dipped 3.2 percent this year.

(BusinessDesk)

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