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Adviser: Paydens 21-branch sale could be start of a trend

The sale brings the total number of Paydens branches up to 129 pharmacies

The advisory firm behind Payden's acquisition of 21 pharmacies expects “further consolidation” in the industry as a result of December's funding cut.

Pharmacy chain Paydens acquired SG Court Group – located predominantly across Kent, Sussex and Surrey – on November 7 for an undisclosed sum of money.  

The Paydens portfolio now includes a total of 129 pharmacies across the south of England, as well as a pharmaceutical wholesaler and a small care home group.

Managing director Dennis Pay said that SG Court is a “complementary match” for Paydens, and highlighted the company’s “impressive track record…against the backdrop of a challenging economic environment”.

London Cavendish Corporate Finance, which advised the business during the acquisition, said SG Court Group is a “highly attractive” business, dispensing approximately 2.7 million prescription items per year.

The firm – which previously advised on the sale of Kent Pharmaceuticals to healthcare business DCC Healthcare in 2012 – said growing competition among pharmacy groups and the government’s decision to cut the sector's funding by 12% from December, has “encouraged” recent mergers and acquisitions in the industry.

Partner at the firm Michael Jewell expects “further consolidation” as NHS funding continues to be slashed, he said.

Pharmaceutical Services Negotiating Committee chief executive Sue Sharpe said earlier this month that changes to regulations around mergers – which will prevent a new pharmacy stepping in straight away if two pharmacies merge – could help contractors “survive” in future.

7 Comments
Question: 
Have you considered expanding your business?

Paul Vertigo, Production & Technical

What would be great at this point is to know Paydens future intentions,

The S.G Court store staff are still in limbo, no one is being told anything, staff are being left to get on with it with no indication that they still have a job or if they will still have a job in a week.

Stores have had a token visit from paydens to say that they are now the new owners, and thats about it.

 

Mr Smith, Pharmaceutical Adviser

If anything this indicates how strong the sector is, I'm not sure I would agree that it "starts a trend".  Its a great acquisition fro Paydens. 

Bruce Goldin, Senior Management

Why would it be "the start of a trend"?!

Bigger groups have always bought smaller ones, because they have the ability to do so. It won't safeguard them against the funding cuts. Just lazy journalism. 

Lucky Ex-Locum, Superintendent Pharmacist

'Further consolidation' is an odd way to describe all of the independents going to the wall and having to sell up to a multiple.

Leon The Apothecary, Student

I've worked with SG before during my early days as a locum dispenser. They were always well run, well managed and we'll staffed and their stores were of suitable size. I wonder why they sold up? I have my thoughts.

C A, Community pharmacist

Being well run and staffed is expensive - which in light of the government cuts is potentially unsustainable. Better to bow out and leave it to a less scrupulous company that doesn't indulge in such opulence (staffing hours/working conditions), and can survive. Either that or a vertically integrated big boy...

Lucky Ex-Locum, Superintendent Pharmacist

I've also worked at one of their branches and it was one of the better groups I've worked for. I should imagine their staff are a bit nervous about the future.

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