1,100 pharmacists to hold €112m Uniphar stake on flotation

Some 1,100 pharmacist customers of Uniphar’s drugs distribution business will have a combined stake worth €112 million in the healthcare services group when it floats on the stock market next week, according to market sources.

Uniphar confirmed on Friday it had raised €135 million in an initial public offering (IPO) of shares at €1.15 each, and will have a €310 million market value when it floats on the junior stock markets in Dublin and London on Wednesday.

A further €15 million of shares may also be sold on the market by the managers of the transaction, Davy and RBC Capital Markets, within 30 days of the IPO, depending on the initial market performance of the shares. That would bring total proceeds to €150 million.

Uniphar was 65 per cent owned by a group of mainly independent community pharmacists before the IPO. Chief executive Ger Rabbette, chief financial officer Tim Dolphin, and 36 other key staff held just over 18 per cent, while the family behind the Sisk construction-to-property group owned 12.4 per cent after selling their healthcare unit to Uniphar last year.

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Diluted

All existing shareholder have seen their stakes diluted to the tune of about 40 per cent as a result of fresh stock being issued under the IPO.

Meanwhile Uniphar said that “certain existing” shareholders, understood to be pharmacists, sold a total of €1.27 million of shares to new investors alongside the IPO, leaving them with about €112 million of stock.

Uniphar, formed in 1994 through the merger of United Pharmacists Co-op and Allied Pharmaceutical Distributors, will use some of the IPO proceeds to buy Durbin, a specialist supplier of pharmaceuticals with offices in the UK and the US.

Bolt-on acquisitions

The cash will also be used for further bolt-on acquisitions, capital expenditure and working capital for growth of the enlarged group, to reduce the group’s debt burden and pay IPO expenses.

"Today marks a major milestone in the 50-year history of Uniphar and cements our transformation from a pharmaceutical wholesaler focused on the Irish market to an international healthcare services business focused on growth markets," said chairman Maurice Pratt.

“We would like to thank our existing shareholders for their patience and support as the board and management have sought to refocus the business over the past 8 years.”

Restructuring

The flotation will complete a significant turnaround since 2010, when a series of cuts by the HSE to the prices it was prepared to pay for medicines hit the company and led to large-scale restructuring.

Uniphar made over two-thirds of its €46.3 million of earnings before interest, tax, depreciation and amortisation (ebitda) last year from its two growth divisions.

These are commercial and clinical, which helps pharmaceutical companies and medical device manufacturers with marketing and distribution, and product access, which sources and supplies unlicensed medicines for retail and hospital pharmacy customers and manages the release of speciality medicines for drug-makers to approved patients.

AIB has purchased a 6.5 per cent stake in Uniphar under the IPO, while Polar Capital and Danske Bank have each purchased 3.3 per cent stakes.