Uniphar to acquire Cahill May Roberts for €50m

Irish-owned pharmaceutical wholesaler Uniphar is to acquire rival Cahill May Roberts for €50 million subject to regulatory clearance.

Details of the deal will be announced today by Celesio, the listed German parent company of Cahill May Roberts.

The deal is being financed by a consortium of Irish banks.

There are three “full-line” pharmaceuticals wholesalers in Ireland, authorised by the Irish Medicines Board.

They typically carry a range of about 12,500 drugs and deliver twice daily to pharmacies.

A combined Uniphar-Cahill May Roberts business would have a share of about 37 per cent of the wholesale market here, placing it second to listed company United Drug.

The combined businesses would have revenue of more than €900 million and earnings before interest, tax, depreciation and amortisation (Ebitda) of about €25 million.

Uniphar is is acquiring the wholesale and pre-wholesale businesses of Cahill May Roberts but the Doc Morris retail pharmacy chain – previously known as Unicare – is not part of the deal.

Cost synergies of about €10 million a year are expected from the transaction, mostly from reduced overheads and distribution costs.

Uniphar is a co-operative of about 450 community pharmacists. It is led by chief executive Ger Rabbette and non-executive chairman Maurice Pratt.

Its 2011 annual report shows that it achieved Ebitda of €16.6 million on turnover of €613 million.

In his chairman’s statement, Mr Pratt noted that price cuts imposed by the Health Service Executive had impacted on its revenue by more than €40 million in 2011 and by more than €100 million over the previous three years.

This trend is set to continue in the years ahead with some drugs coming off patent and the HSE continuing to put downward pressure on prices.

Cahill May Roberts traces its roots to 1902, when Sam Roberts moved to Ireland from England to expand May Roberts.

PC Cahill Ltd was set up in 1936 and the two businesses merged in 1972.

The business was acquired in 1995 by Gehe, a company related to Celesio.

The sale of Cahill May Roberts is part of a wider divestment strategy by Celesio recently.

This deal will require approval by the Competition Authority, probably in the first quarter of 2013.

In a report on the pharmaceuticals market published in January, the Economic and Social Research Institute said there was “vigorous competition” between the three full-line wholesalers.

“The market appears to work well,” the ESRI added.

It concluded that while competition would not be as strong with two full-line wholesalers, “pharmacists would still be able to play one off against the other”.