Warehousing giant AAH Pharmaceuticals is primed to be sold by its German private equity owner Aurelius, the Financial Times reported earlier this week (September 2).

A source quoted by the Financial Times said that Aurelius hopes to sell AAH for “around” £900 million, or “about 10 times earnings” of a projected £90m this year.

The sale of the company is “expected to conclude by the end of the year” if it fetches a “high enough price”, it reported.

Read more: What happens in the warehouse

In 2022, Aurelius completed the purchase of AAH from McKesson in a £477m deal that included Lloydspharmacy (then the second-largest UK pharmacy multiple), LloydsDirect (the UK’s second-largest online pharmacy) and other healthcare businesses, which it placed under the umbrella of the Hallo Healthcare Group (HHG).

A spokesperson for Aurelius declined to comment on the sale speculation when approached by C+D.

 

Whale for sale?

 

AAH, which currently employs around 2,500 people, is the UK’s “largest independent pure-play pharmaceutical wholesaler”, according to a blog published by Aurelius last month (August 8).

Aurelius reported that it has invested “more than £50m earmarked for operational improvements” at AAH, including a mammoth £13m investment for “automation upgrades” at its Warrington warehouse.

In May, C+D visited AAH’s huge warehouse in Ruislip, which processes over 11,000 orders a day.

Read more: Lloydspharmacy parent company ‘exiting the healthcare services sector’

C+D was told at the time that since Lloydspharmacy’s closure, AAH’s item volumes had dropped by roughly 20%.

In a July blog, Aurelius said that AAH had needed to foster “fresh business relationships with hundreds of entrepreneurial pharmacists” that had bought pharmacies from the Lloydspharmacy estate.

The pursuit of new business after the pharmacy chain’s sale has meant that AAH has grown its “active customer accounts” by 60% since its purchase by Aurelius, C+D understands. 

 

Remains of the estate

 

Last month, the Pharmacists’ Defence Association (PDA) revealed that Aurelius-owned HHG was “exiting the healthcare services sector” by quitting contracts at 64 pharmacy sites operated by Lloydspharmacy Healthcare Services (LP HCS Ltd).

In November, C+D exclusively revealed that Aurelius had sold all of the high street Lloydspharmacy stores, before revealing in January that the pharmacy multiple had entered into liquidation, with almost £300m owed to creditors.

The sales came after Pharmacy2U snapped up the online prescription service LloydsDirect, its closest competitor, in October - although the deal has faced hurdles since.

Read more: Lloydspharmacy confirms 'successful sale' of all community pharmacies

And in April, HHG revealed that it paid out a £405 million dividend to its shareholders from the sale of Lloydspharmacy and LloydsDirect, according to its annual report.

The sale of AAH would leave HHG with just two of the four healthcare-related entities that remained in the group in November after the sale of LloydsDirect and its Lloydspharmacy branches.