UK's Bestway buys Co-operative's pharmacy chain for £620 mn
21 July 2014
Bestway Group, the UK's second-largest cash-and-carry warehouse operator, has agreed to buy Co-operative Group's pharmacy chain for approximately £620 million ($1.06 billion) aiming to expand into the country's pharmacy sector.
Co-operative Pharmacy runs UK's third-largest pharmacy chain and has over 770 branches across the country and over 7,000 employees.
Co-operative intends to use the net proceeds from the sale to pay down its debt and invest in its core businesses across its retail and consumer services divisions.
Richard Pennycook, Interim Group chief executive of The Co-operative Group, said:
"The successful sale of our pharmacy business is an important move for The Co-operative Group.''
''The proceeds will enable The Co-operative to reduce debt and invest in our business and is part of the focused delivery of our clear strategic plans and priorities,'' he further stated.
London-based Bestway is the UK's eighteenth-largest privately owned company and seventh largest family-owned business. It operates 64 warehouses under the Bestway and Batleys names and enjoys 18-per cent market share in the grocery and wholesale sectors serving around 125,000 independent retailers throughout the country.
Bestway, founded in early 1960s by Sir Anwar Pervez, also owns Bestway Cement, Pakistan's second-largest cement manufacturing unit with an annual capacity of 6 million tonnes. The Group also operates United Bank, Pakistan's second-largest private bank with assets under management of $10.3 billion.
With this acquisition, Bestway will have an annual turnover of approximately £3.4 billion and a global workforce of more than 32,600 people, with over 11,900 people in the UK.
Zameer Choudrey, Bestway Group chief executive, said, ''We are delighted to be bringing The Co-operative Pharmacy business into the Bestway family, adding to our growing and diverse business portfolio.''
''We see great potential to grow the business organically and through future acquisitions.''
Manchester-based Co-operative Group is the UK's largest mutual business, owned by over eight million members. It operates 4,500 outlets, with around 87,000 employees and has an annual turnover of £11 billion with interests across food, funerals, insurance and legal services.
Co-operative reported revenue of £750 million and operating profit of £33 million in 2013.
The transaction is expected to complete in October 2014, following the separation of Co-operative's pharmacy business, which the company considers is not part of its future strategy.
Following the transaction, Bestway will have the right to use the Co-operative Pharmacy brand for a period of 12 months.
Rothschild and UBS acted as financial advisers to the Co-operative Group in this transaction while KPMG acted as financial advisors for Bestway.