EBOS announces merger of Chemmart and Terry White

EBOS Group Ltd has entered into an agreement to merge its Chemmart business with the Terry White Group businesses to create one of Australia’s largest retail pharmacy networks.

The combined businesses will have retail turnover of about $2 billion per annum and around 500 pharmacies.

EBOS Group will sell the Chemmart business and subscribe for shares in Terry White Group Ltd (TWG), which will result in EBOS Group consolidating TWG in its financial statements from completion. The expected earnings impact is not material to EBOS Group.

Completion of the transaction is subject to a number of conditions, including TWG shareholder approval. Subject to the satisfaction or waiving of those conditions, the transaction is expected to be completed in late October 2016.

EBOS Group CEO Patrick Davies said the merger would provide both immediate and long-term benefits through building the strongest retail pharmacy network in Australia, underpinned by a substantial and sophisticated retail pharmacy model.

“Chemmart and Terry White Group have strong, vibrant brands that have established leadership positions within the market,” he said. “The pharmacy industry is positioned for growth with Australia’s ageing population and positive community attitudes towards health and wellbeing. The combined businesses will take a leadership position on health services within community pharmacy, while also maintaining a value-for-money offering.

“This merger is about capitalising on those strengths and continuing to develop competitive and sustainable businesses for pharmacy owners while also significantly increasing our ability to meet the evolving needs of customers.

“This is another important step in our strategy to position EBOS Group for further growth in retail pharmacy in Australia.”

The proposed merger is subject to TWG shareholder approval and will be put to a vote at an extraordinary general meeting planned for late September 2016.

TWG CEO Anthony White said both networks had complementary retail offerings, strong cultural synergies and a mutual focus on value for money and frontline health services that would deliver a stronger, more capable network of pharmacies.

“The merger of the two networks creates a comprehensive national footprint and increased scale which, when combined with capabilities across retail, merchandise and private label, will improve the group’s competitiveness and frontline health service delivery for the benefit of all our pharmacy owners and customers,” he said.

“We have a substantial array of core retail capabilities and support platforms which are scalable to handle this growth and support future network expansion.

“Significant investment in our enterprise resource planning system is already driving efficiencies and improved operations, allowing pharmacists to raise customer service levels and drive strong sales growth.”