Independent contractors are outbidding multiples for pharmacies amid increasing demand, brokers have told C+D.
Tony Townsend, director of Townsend's Business Sales, said independent buyers formed the "backbone" of the market. Experienced independents were "very well supported" by banks, who were confident in contractors' ability to "trade at a profitable level".
Although buyers from the multiples were not "invisible", they had been "extremely selective" in their purchases over the past seven years, he told C+D. "Quite surprisingly they have been outbid by independent buyers, even for health centre pharmacies," he added.
Andrew Calder, director of Alliance Valuers, said independents and regional multiples were "extremely keen" to acquire new pharmacies, while activity from the national multiples was "minor".
There was "undoubtedly growing demand" for pharmacies, fuelled by the removal of the 100-hour exemption in September 2012, Mr Calder said. "We are seeing in excess of a dozen offers for some businesses and asking prices are invariably being exceeded," he said.
The acquisition of the Co-operative Pharmacy by UK-based food wholesaler Bestway in July had not influenced other purchasers, but it was a "strong signal" about the health of the market, he added.
Scott Hayton, director of Hutchings Consultants, said the market was "currently extremely buoyant". "Active in the market are everyone from private equity groups, newly qualified pharmacists and managers looking for their first buy, all the way up to independently owned groups and multiples," he said.
Brokerage group Christie+Co said "increasing demand" for pharmacies was fuelled by the "relative scarcity" of purchase opportunities.
Head of pharmacy Tony Evans said Christie + Co had almost 3,500 applications for pharmacy businesses on its database. "With many banks keen to lend to the sector, we see demand continuing for the foreseeable future," he told C+D.