Dis-Chem plans JSE listing

PHARMACY group Dis-Chem intends to list on the JSE, but only selected institutional investors willing to splash out at least R1-million will get a chance to claim a stake in the company.

A Dis-Chem spokesperson said the group had contemplated the need to list for some time and it had become an imperative in light of its expansion plans.

“We have spent a lot of focus and management time on the listing over the past calendar year. We would like it to happen now, so that we can return our focus to growing the business.”

Family-owned Dis-Chem generated revenue of R15.5-billion in this year’s financial year.

Dis-Chem’s existing shareholders are the Saltzman Family Trust, holding 66.9% of the company’s shares; other senior managers hold 23.4%; and the remaining 9.7% is held by an investor. Co-founders Ivan and Lynette Saltzman would continue as CEO and MD, respectively.

Electus Fund Managers equity analyst Damon Buss said the listing would give investors an option to own a good quality business in a sector where there had been only one option.

“A potential cause of worry for Clicks is that the share is trading at a very high multiple. If DisChem lists, it will certainly look more attractive from that perspective. But Clicks and Dis-Chem are such good businesses, investors may want to have a holding in both,” Buss said, adding that the two groups were quality defensive businesses, as earnings were not cyclical.

Chief executive Saltzman said the listing would facilitate a partial exit, while allowing existing shareholders and senior management to remain materially invested “ensuring strong alignment between management, existing and new shareholders”. — Financial Mail