Sharechat Logo

Ebos tightens grip on Australian chain

Friday 19th October 2018

Text too small?

Ebos Group will pay A$50 million to tighten its grip on its Australian retail pharmacy network.

The healthcare and animal health products maker has agreed to buy out Terry White, two years after securing a controlling stake when the Australian pharmacy business merged with Ebos's Chemmart business. The deal will be done via a scheme of arrangement and is expected to be completed before the end of the calendar year. 

The merged TerryWhiteChemmart entity is already one of Australia's biggest retail pharmacy networks. At the time of the merger, annual retail turnover was A$2 billion across 500 pharmacies. Ebos said full ownership is expected to increase earnings in the year ending June. 

"A strongly resourced management company is critical in the face of a highly competitive and evolving retail pharmacy sector and continuing industry reforms," chief executive John Cullity said. 

Last month, TerryWhiteChemmart chief executive Anthony White told the Australian Financial Review a float was still an option for the company but wouldn't be on the cards in the immediate future as the integration of the business continued. He said the pharmacy retailer aimed to have more than 1,000 stores in the network by 2020, with a 25 percent market share. 

Ebos shares slipped 0.2 percent to $21.75 at the opening of the market on a very small volume. That was a smaller decline than the wider S&P/NZX 50 index. 

The company's greater control over the retail pharmacy business will come into effect ahead of a A$1 billion annual distribution deal with Australia's Chemist Warehouse from July.

Ebos has a successful track record of mergers and acquisitions and transformed itself in 2013 with the purchase of Australian pharmaceutical wholesaler and distributor Symbion. About 48 percent of gross operating revenue is derived from the wholesale and retail pharmacy businesses.

However, Cullity warned shareholders this week that the Australian Federal government's pharmaceutical benefits scheme to subsidise prescription drugs for residents threatens a model that works well. 

Ebos's cornerstone shareholder Zuellig Group also holds a third of Greencross Medical, which has a retail pharmacy network of 357 stores in New Zealand under the Unichem and Life Pharmacy brands. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ shares fell on global growth concerns
New Zealand dollar becalmed ahead of CPI data
Billionaire Aussie miner moves businesses to NZ in 'quixotic' CER gambit
RBNZ plucks bank capital numbers out of the air: Reddell
Genesis coal burn reached 5-yr high in 'unprecedented' conditions
Govt part-funds another $11m of low-emissions transport projects
January 22nd Morning Report
NZ dollar stalled ahead of CPI data; IMF trims global outlook
MARKET CLOSE: NZ stocks gain; investors seek value ahead of earnings season
NZ dollar drifts lower ahead of CPI; China GDP as expected

IRG See IRG research reports