PETALING JAYA: 7-Eleven Malaysia Holdings Bhd’s 75%-owned subsidiary Caring Pharmacy Retail Management Sdn Bhd today proposed to acquire stakes in pharmacy companies and business assets in the northern region for RM48.86 million cash.
Caring has entered into several conditional sale agreements with various vendors for the proposed acquisitions, including a 67% stake in The Pill House Pharmacy Sdn Bhd (TPH) for RM25.51 million cash; a 60% stake in Wellings Pharmacy Sdn Bhd for RM19.9 million cash; certain business assets in three outlets currently held by Farmasi Sri Nibong Sdn Bhd for RM3 million cash; and certain business assets in an outlet currently held by Farmasi Sri Nibong (Pekaka) Sdn Bhd for RM450,000 cash.
Upon completion of the proposed acquisitions, which is expected to be completed by the end of 2020, the Caring group pharmacy outlets will increase from 139 to 165, by an additional of 26 pharmacy outlets operating under three brand names namely Caring Pharmacy, Georgetown Pharmacy and Wellings Pharmacy.
Based on the proforma revenue of the Caring group for the financial year 2019, the proposed acquisitions will increase the consolidated revenue of Caring by about 48.8% from RM573.25 million to RM852.92 million.
Additionally, subject to the completion of the respective proposed TPH and Wellings acquisitions, Caring will be granted a call option to purchase all the TPH and Wellings option shares by the remaining shareholders in both companies. In turn, Caring shall grant to option holders a put option to require Caring to purchase the TPH Option and Wellings option shares.
“The exercise period of the options is 14 days from the fifth anniversary of the completion date of the proposed acquisitions.”
The option price shall be based on the respective audited consolidated profit after taxation and minority interests of TPH and Wellings for the latest financial year before the options are exercised, multiplied by a price-to-earnings multiple of 10 times.
Commenting on the proposed acquisitions, Caring Pharmacy Group Bhd managing director Chong Yeow Siang said Caring and its subsidiaries operate a chain of community pharmacies in Malaysia primarily under the Caring brand name through more than 100 stores located mainly in the Klang Valley, Malacca and Johor regions. The proposed acquisitions serve as a new platform of growth for the Caring group whereby it will expand its business footprint into the northern part of Malaysia covering Penang, Kedah and Perlis.
“The proposed acquisitions will allow the Caring group to leverage on the strength of Georgetown Pharmacy and Wellings Pharmacy brands and reputation in northern Malaysia, and this is expected to contribute positively to the future earnings of the Caring Group and accordingly the 7-Eleven Malaysia group,” he said in a statement.
The TPH group is primarily involved in the retailing of pharmaceutical, healthcare and personal care products under the Georgetown Pharmacy brand name through its outlets in Penang, Kedah and Perlis.
The Wellings group is primarily involved in the retailing of pharmaceutical, healthcare and personal care products under the Wellings Pharmacy brand name through its outlets in Penang.
