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MedicX puts its 21 branches on the market

It is rare for "an estate of such high quality" to be available for sale on an individual or sub-group basis, says broker Christie + Co

C+D has learned that the multiple has already received "strong levels of enquiries" about iits 21 branches, which it is selling individually, in small groups or as a portfolio


Independent chain MedicX Pharmacy is selling its 21 branches, inviting interest from independent and multiple buyers.

The group had already received "strong levels of enquiries" from potential buyers and was looking for a "timely sale", broker Christie + Co revealed yesterday (August 4).

The pharmacies, many of which are situated within or near to health centres, are available to purchase either individually, in small groups or as a portfolio, said Christie + Co, which is overseeing the sale.

"It is extremely rare for an estate of such high quality to be available for sale on an individual or sub-group basis. The estate is relatively new, so the pharmacies provide a genuine opportunity for purchasers to expand dispensing activity and services beyond the already strong levels achieved," added Tony Evans, director of pharmacy at Christie + Co.

The pharmacies are a mixture of standard hours and 100-hour contracts. Thirteen are located in north west England, with five in London and the south east, two in Yorkshire and one in Wiltshire.

The chain did not explain why it had decided to sell the pharmacies.

MedicX Pharmacy was set up as an independent pharmacy company in 2007 by the MedicX Group, a UK healthcare property investor and developer. In 2010, MedicX Pharmacy separated from the MedicX Group.

In 2012, MedicX Pharmacy's Hemel Hempstead branch achieved third place in C+D's Platinum Design Awards.

Who would you like to see purchase the MedicX pharmacies?

We want to hear your views, but please express them in the spirit of a constructive, professional debate. For more information about what this means, please click here to see our community principles and information

Sue Dickinson, Locum pharmacist

For the first time in my life due to inheritance i am in a position to possibly buy my own pharmacy. It will only be one as well!!!

This has come at a time when MedicX are up for sale and it would appear they are prepared to sell singly or in groups..

Obviously i am taking advice on this but would anyone have any pointers. Is it case of pick the most profitable one.

MedicX seem to be quiet on their reasons for sale so suddenly. Anything there i should be concerned about.

Many Thanks Sue.

A.S. Singh, Community pharmacist


the world of purchasing pharmacies is a dark and murky one, be prepared to pay over the top and also be prepared to be gazzumped by someone who knows the seller personally or has a under the table deal with the seller.

Good luck

Stuart Turner, Other public sector

Anyone heard how the straightforward sale of Medicx Pharmacy is going on. Very quiet. I am sure all the staff will be wanting to know as a completion date of Christmas was suggested.

Rajive Patel, Community pharmacist

Hey Sue. I'l certainly help, if you need some advice.

Kevin Western, Community pharmacist

If all their counters look like that, rebranding is going to cost...

Call Me Cycnical, Senior Management

This is nothing other than investors looking for an exit on their 5yr plan. Good luck to them all. A job well done I'd say. The timing is spot on, there's a new cash rich player investing in the sector, why not suck them in whilst there keen to spend.

N O, Pharmaceutical Adviser

There is an article by Gavin Birchall published in April'14. 3 months after that this happens. What does he have to say now?

Stuart Turner, Other public sector

If you take a look at Companies House website and accounts filed for the last two years it shows a net operating loss of over £3 million in each of the last two years.
In addition there is a high level of debt secured against the business including £7 million only twelve months ago.*

*This comment has been edited for breaching the community principles - C+D

Stuart Turner, Other public sector


Stuart Turner, Other public sector

You may or may not have noticed that my posts about the sale of MedicX were initially removed and have now been rather strangely put back in an edited fashion.

Its a pity one doesnt receive an explanation as to why this happens.

Obviously someone took the hump at what they have read. Strange how people have problems with accurate factual information.

I had better be careful what i post in future.

I notice Christie and Co. the selling agents dont have them advertised as yet.
Must not be any rush to sell.

Uncertain times for employees as with all business sales.

I notice Christie and Co.

Cod Fillet, Community pharmacist

I worked for them as a locum some years ago and love the modern and young atmosphere.
Sad to see them ending this project.

Marc Borson, Community pharmacist

it has not gone bust, this is probably the best time to sell, as beltway are looking to expand. This kind of business makes money from the capitalisation of the business rather than the profits. many people will be interested and they will probably get a fair price. now is the time to sell guys. take the professional advice.

Brian Austen, Senior Management

Hi Marc
You are right about it being the time to sell for MedicX. If you look at the Independent Pharmacy Care Centres (IPCC) sale in 2010, it supports your point about capitalisation of the business.This is a very similar business 'journey', maybe on a slightly smaller sale. There will be more complications over lease agreements in surgeries in this case but it is in everyone's business interest; sellers, buyers, surgeries to make it work. Some of these pharmacies will command a premium price, others will not. It will be very interesting to watch what happens. I personally think the pharmacy market is a bit like the housing market in that it is overheated, with London and the South taking the lead.

London Locum, Locum pharmacist

You're feelings about premiums being overpriced are similar to mine. There doesn't seem to be any justification for these crazy prices.

Rajive Patel, Community pharmacist

What do you class as a premium? Firstly, it is not a premium, in any event, it is the value of Goodwill - An intangible asset.

In the good ole days, you could buy a pharmacy for 5 times adjusted net profits, which would give an investor a 20% Return on Investment - Not Bad!! Anyway nowadays you are looking at 10 times adjusted net profits, which gives an investor 10% Return on Investment. Again although the valuation sounds high, it is still attractive to an investor who is getting 10% return on his/her money. This is far higher than any other type of investment, in a relatively safe stable market. A bank deposit, for example, would probably return 0.5%!!! Factor in inflation, then you would actually be losing your wealth. By ploughing into a pharmacy asset, you at lease preserve, increase your wealth.

Lets take the example of a shop doing £500,000 turnover with 30% Gross and 10% Net profit. This would mean £50,000 net profit. In 2000 this pharmacy would have been valued at £200,000 (5 Times Net Profit). Today it would be valued at £500,000 (10 Times Net Profit). See the difference!!

Anyway, if you believe the economy will have very low interest rates, for the life of the loan, then you would be simply foolish to buy into this model at the latter valuation. If however, you feel, the interest rate environment will be depressed for many more years to come, even at this valuation, it makes sense.

Personally, I still believe it is borderline stupid to buy into pharmacies at these multiples (in fact anything over 6 is poor) unless you have real business upside e.g. New Development or extreme stability (e.g. No competition, and possibly in a health center).

The other reason, existing contractors are happy to buy, is that they can write off their tax liability against the goodwill purchased, amortised over say 10 years. This means the new owner may not have to pay CT (Corporation Tax) for a long time.

Hope this helps!

Rajive Patel, Community pharmacist

Sorry Typo:

"Anyway, if you believe the economy will have increasing interest rates, over the life of the loan, then you would be simply foolish to buy into......"

London Locum, Locum pharmacist

Very useful info.

Stuart Turner, Other public sector

*MedicX have gone very quiet.

*This comment has been edited for breaching the community principles - C+D

Brian Austen, Senior Management

sale = scale

Rehan Nawaz, Pharmacy owner/ Proprietor

You sound like a broker Marc. 'Now is the time to sell' is a common theme each year....for the last 25yrs.

N O, Pharmaceutical Adviser

Mid-Life crisis ??? :-))

Rehan Nawaz, Pharmacy owner/ Proprietor

More a case of expensive leases, high business rates for excessive pharmacy space, and most of all......uncertainty in adjoining surgeries. Some of their refits/fit outs have set them back up to 200k/250k putting a significant dent in finances

N O, Pharmaceutical Adviser

Were they one of the Pharmacies that won prize in the C&D design ?? I think they earned some £1000 or so ;-)

Rehan Nawaz, Pharmacy owner/ Proprietor

Yes Shan, should be enough to cover 1 months service charge

Rehan Nawaz, Pharmacy owner/ Proprietor

Well they've certainly chosen a good broker to overprice the " estate of such high quality".A word of advice to prospective purchasers....ensure the leases are solid because many are in medical centres

Brian Austen, Senior Management

Rehan, good advice, the discussion on this sale has been going since 31/07/2014 on Pharmacy Forum UK. Too much to repeat here but good reading.

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