Northern Pharmacy Chain Acquired by Alliance Boots

In a deal that follows a period of consolidation in the retail pharmacy sector HF Healthcare Limited has been sold by founder Alex Holliday for an undisclosed sum.

The firm operates a range of retail and health centre pharmacies mostly under the Healthcare Plus brand, and they can be found across the north of England, from Morpeth in Northumberland to Leeds.

The £30m turnover business had grown to become the largest privately owned independent wholesale and retail pharmacy group in the North East. Founded in 1995 HF Healthcare Limited employs around 240 people.

BTG McInnes Corporate Finance led and negotiated the transaction, which sees 100 percent of the equity in the firm acquired by Alliance Boots, on behalf of Alex Holliday, with advice from his legal team at Hay & Kilner.

L to R: Shawn Bone (BTG McInnes), Alex Holliday (HF Healthcare), Chris McCourt (BTG McInnes) & Nick James (Hay & Kilner Solicitors)

Having built the business from renting a room above a pharmacy in 1995 the company bought its first pharmacy in 1999 and through a series of acquisitions its 25th in 2007. “I felt the time was now right to consider my continued involvement in retail pharmacy,” said Alex Holliday.

“This deal gives me the opportunity to focus on my other business interests” he added.

Alliance Boots employs over 100,000 people in 15 countries and was formed in 2006 by the merger of Alliance Unichem and Boots Group. The firm was taken private in June last year when a successful bid of over £11bn was made by KKR in the first deal to see a FTSE 100 company acquired by a private equity house.

“There has been significant consolidation in the pharmacy sector over recent years, and we have been involved with HF Healthcare as the business grew organically and through the acquisition of Barons Chemists in 2005. Given the business had grown to be the largest independent pharmacy business in the North East it was a logical step for the business to become an acquisition target itself,” said Shawn Bone of BTG McInnes Corporate Finance.

“This is further evidence that trade buyers in the M&A market continue to be active, nothwithstanding speculation that the credit crunch will reduce appetite for deals. Having recently acted on the sale of Heighley Gate Garden Centre to a large corporate buyer, the trade buyer market remains buoyant and open for business where there are quality targets. HF is a high quality business and Alliance have acquired a significant foothold in the North East through this acquisition” Bone added.

Hay & Kilner played a crucial role in making sure the deal was done on time. The legal team faced a tough deadline to complete the transaction. Nick James, lead partner from Hay & Kilner, commented:

“The deal had to be done before midnight on 31st March. We had a team of solicitors working right up to the deadline to ensure that our client was able to complete on time.”

Other advisors in the deal included Andrew Nichol and Simon Richards at UNW who provided accounting support and tax advice.