Clicks to hold largest retail pharmacy network in SA after Pick n Pay deal
The JSE-listed health and beauty retailer will acquire the supermarket chain’s 25 in-store pharma outlets
JSE-LISTED health and beauty retailer Clicks Group is set to hold the largest retail pharmacy network in South Africa, with a portfolio of 632 pharmacies in the country, after it announced the acquisition of the retail pharmacy business of Pick n Pay, including 25 of its in-store pharmacies.
The acquired pharmacies will be rebranded to Clicks and the acquisition will help the health and beauty retailer to stretch its pharmacy footprints further compared to its direct competitor, Dis-Chem Pharmacies.
Dis-Chem grew The Local Choice to 110 pharmacies at the end of August last year.
Clicks chief executive Vikesh Ramsunder said yesterday that the acquisition of the pharmacy chain from Pick n Pay accelerated the strategy of extending the convenience and accessibility of the Clicks pharmacy network. “Currently 50 percent of the country’s population live within six kilometres of a Clicks pharmacy and we aim to improve this over time as we get closer to customers. We welcome the opportunity to bring our experience in retail pharmacy to customers of Pick n Pay,” Ramsunder said.
However, the transaction is still subject to approval by competition and regulatory authorities.
The proposed acquisition of Pick n Pay pharmacies comes after Clicks added 16 new pharmacies in the six months to end February despite the continued disruptions caused by the Covid-19 outbreak.
The group said in terms of the proposed transaction, Clicks would acquire the pharmacy licences and ethical drug stock, while all staff employed in the pharmacies would transfer from Pick n Pay to Clicks.
Clicks said the transaction was non-categorised in terms of the JSE Listings Requirements for both Clicks and Pick n Pay and the announcement was made on a voluntary basis. “The transaction will not have a material impact on the earnings and financial position of both companies,” the group said.
Nesan Nair, a senior portfolio manager at Sasfin Securities, said it was a significant deal for Clicks even though they were only acquiring 25 pharmacies. “The deal is significant, because it is clear that Pick n Pay will be using Clicks if it wants to add pharmacies to any of its other stores, and Pick n
Pay has a big footprint of retail stores which could be quite big for Clicks,” Nair said.
He added that it showed that retailers like Pick n Pay might be inclined to partner with specialist pharmacists like Clicks instead of going it alone as they had tried. “This can have big implications for market share growth for the likes of Clicks,” Nair said.
Pick n Pay chief operating officer Adrian Naude said they had held only a relatively small number of pharmacies over the years.
“We have recently set out our key strategic objectives in terms of future growth, and these do not include the development of a large pharmacy division. “Our main objectives in terms of transferring our pharmacy business
have been to ensure that our customers have a seamless transition and maintain the quality of service they have been used to with Pick n Pay, and that our pharmacy staff are looked after.
“We are pleased to have reached an agreement with Clicks, which meets both of these objectives,” Naude said.
Clicks shares closed 1.40 percent higher at R250.53 on the JSE yesterday.