Day Lewis acquires 18 pharmacies, passing 300 milestone

day lewis pharmacy acquisition jay patel funding cuts
Jay Patel: Day Lewis continues to invest, despite the pharmacy funding cuts

Day Lewis has added a further 18 pharmacies to its portfolio, expanding the chain to over 300 branches.

The business acquired Community Pharmacies (UK) Ltd for an undisclosed sum, it announced this morning (July 3).

The 18 health centre pharmacies located across England are "predominantly" partnerships with GP surgeries, Day Lewis confirmed.

Day Lewis executive director Jay Patel said that despite the “ongoing cuts facing pharmacy”, the chain “continues to invest in the sector”.

“The acquisition strengthens our business further,” Mr Patel said. “A strong Day Lewis enables us to support our colleagues, while helping us to reach as many patients in as many communities as possible.”

Mr Patel added that the company is “on track” to achieving his late father Kirit Patel's target of owning 400 pharmacies by 2020. The company passed the 250-pharmacy mark in April 2015.

Community Pharmacies Ltd CEO Andrew Murray said Day Lewis was the “right fit”, because the two businesses shared the same “vision and values”.

“Day Lewis has long been recognised as one of the best independent operators in the industry,” Mr Murray said. “I look forward to working with them.”

Jay Patel told C+D in March that the chain wanted to “grow our way out” of the challenge of the pharmacy funding cuts.

See where all 18 of Day Lewis's new pharmacies are located here.

Search for the latest Day Lewis vacancies on C+D Jobs.

11 Comments
Question: 
Have you considered buying or selling a pharmacy this year?

Anon Anon, Pharmaceutical Adviser

The only factor that makes this a family company is that there are family members working in it. There is a cost to their expansions, low staff morale and high staff turnover. When they were small that was not the case.

Sue Per, Locum pharmacist

There sure is plenty of milk in the "NHS Cash Cow's" Udders, ready to be squeezed out by the operator.- Should be easy with contract limitation coupled with stagnant (Or Declining Pharmacists Payout Rates) - Will recoup the sums paid within 7 years!! and will be ready for another dose of hard squeeze.

S Morein, Pharmacy Area manager/ Operations Manager

Collapse of pharmacy network. Savage cuts destroying pharmacy's future. But wait experienced operator buys a significant number of contracts. Maybe the proclamations of pharmacys' destruction are both premature and vastly overstated.

Dave Downham, Manager

...or maybe they've got millions of pounds burning a hole in ther pocket that they need to spend to justify the lending. But wait, experienced operator sells a significant number of contracts. Maybe the proclamations of <sic> pharmacies destruction are both timely and vastly understated.

S Morein, Pharmacy Area manager/ Operations Manager

Or maybe contractor selling because the goodwill values are so inflated that why bother working?

Dave Downham, Manager

Yep - you can clearly tell that the goodwill values are so inflated by considering the published average EBITDA across the group as adjusted for synergistic savings multiplied by industry average price earnings ratio to give an undisclosed sum. Or do you think they have considered a discounted cash flow forecast using the group's internal rate of return? I'd love to know your insight on this, Ms Morein.

S Morein, Pharmacy Area manager/ Operations Manager

I would suspect that as a multiple they are using a free cash flow forcast coupled with their (Day Lewis) average rate of return. Why Day Lewis would want to use an "industry average price earnings ratio" seems remarkably strange as without doubt Day Lewis will have undertaken a comprehensive analysis of vendors financial statements and to secure any finance facilities Day Lewis would surely have had to provide forward modelling using Day Lewis existing margins. However, I would strongly suspect that any sale would be at least at market average as there appears to be both a willing buyer and vendor. And as we both know the market rate for contractors goodwill remains at vastly exaggerated levels. I do wish Day Lewis success with this venture though to suggest that this purchase reflects anything other than a bouyant confident sector seems obtuse.

P M, Community pharmacist

back seat driver!

Dave Downham, Manager

Touche

Ilove Pharmacy, Non Pharmacist Branch Manager

'Independent operator' !! Can somebody explain how 300 Branches = independent?

Mr Pharmacist!, Pharmaceutical Adviser

Wow!  Very Good news!

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