Uniphar plc has announced the acquisition of McCauley Pharmacy Group, which will add 37 retail pharmacies to the Uniphar network.
Consideration was not disclosed but Uniphar said the deal, subject to approval by the Competition and Consumer Protection Commission, will be earnings accretive from completion.
“Earnings will be enhanced further through leveraging the group’s scale and infrastructure, and the acquisition is expected to deliver a return on capital employed in line with Uniphar's target rate of 12%-15% within three years,” according to a company statement.
Uniphar CEO Ger Rabbette (pictured) commented: “The acquisition of McCauley further improves our leading position in the Irish retail pharmacy market.
“McCauley is widely recognised as a leading brand across health, wellbeing, and beauty, and their their expertise and advanced digital offering will complement our fast-growing consumer business in the Supply Chain & Retail division."
In Association with
Uniphar, with a market capitalisation of c.€910m, has seen its share price drift lower this year.
In 2017, Sam McCauley Chemists Ltd, the operating company behind the independent retail pharmacy group, secured a cash injection from private equity investor Carlyle Cardinal Ireland.
Turnover at the McCauley chain operating company, LXV Remedies Holdings Ltd, was €80.4m in the year to September 2021, down from €83.1m the previous year.
Cash generated from operations was €4.9m, down from €5.6m, and interest paid on bank and private equity borrowings was €1.3m.
Total liabilities in September 2021 amounted to €86m, and the company's negative net worth was €33.5m. Bank debt totalled €24.4m at period end.
Tony McEntee, CEO of McCauley Pharmacy Group, said: “With Uniphar’s strong track record in this sector, the future of the McCauley business is in very safe hands.
“We extend our thanks to all McCauley staff who have played such a critical role in the transformation of the business over the past number of years and in particular for their hard work and tireless commitment throughout the Covid-19 pandemic.”
The pharmacy chain implemented a €2m redundancy programme in 2020 and 2021 which saw headcount reduced from 505 to 441 people.
Average annual pay across the group was c.€31,000 in FY21, with staff sharing a meagre company pension payment that totalled €71,000.
According to Renatus, McCauley Group is being advised by Focus Capital Partners led by Alan Kelly, Brian Barrett, Paddy Dooley and Robbie Allen. Legal counsel is being provided by a McCann FitzGerald team led by Garreth O’Brien, Ciara O’Herlihy, Charlotte Blackmore, Grace McKnight, Donal O’Raghallaigh, Iryna O’Connell, Catherine Austin, Philip Andrews, Sean Kehoe and Tom Ó Maolagáin. The services of PwC and A&L Goodbody are also involved
Uniphar's legal adviser is William Fry, with lawyers Barbara Kenny, Alex Byrne, Brian O’Callaghan and Aisling O’Gorman involved on the deal advice and due diligence. Corporate finance counsel has been sourced from a Capnua team of Eamonn Hayes, Jamie McConnell and Conor Guerin.
One year takeover review
Meanwhile, Uniphar still isn’t over the line with its Navi acquisition announced in December 2021.
As part of its merger review process, the Competition and Consumer Protection Commission has issued an assessment of the proposed acquisition to both parties.
This assessment, which sets out the preliminary views of the CCPC, is not a final determination, according to the regulator. The parties were given 15 working days to respond in writing to the CCPC’s assessment and they may also ask to make oral submissions.
The CCPC expects that the investigation will conclude by December 2022, along with a determination.
